It’s worth thinking about what’s going to stand in the way of demand for business trips. Yes, the Covid problem is a huge barrier, but it goes beyond that. I see five related barriers that our industry will have to reckon with. Here’s the short story on my LinkedIn page: https://bit.ly/5_Barriers_to_Business_Travel New connections are welcomed.
The longer, richer read follows. Fair warning – it is a sobering assessment.
1. Virtual Work
The more that work gets done virtually, the more that virtual meetings will eliminate demand for business travel. Pre-Covid, virtual meetings were a known alternative to traveling, but a clear downgrade in terms of interpersonal impact and, frankly for some, status. Many travelers and their managers were quick to decide “It’s better if we do this meeting in person.”
Post-Covid, managers up and down the ranks are forced to use virtual collaboration tools, like ’em or not. Guess what? They work. For a lot of meetings, across a lot of use cases, and for an awful lot of people. Today, managers are building up a comfort level with virtual work, and that means trouble for travel.
If employees don’t have to go to an office to get their work done, why would they need to travel to get their work done?
It’s easy to be a Concur critic these days. But “these days” ain’t the same as “in the future”.
I attended Concur’s annual customer event, Fusion, this week. Let’s start with the negatives:
Concur clearly knows their user base has been frustrated by poor SaaS lately. It’s a major sore point with customers, and a central issue for management. Will management make good on these promises? TBD.
Concur is playing catch-up with KDS on making expense reports easier to write, and making the booking process easier to use. No signs this year of any breathtaking innovation.
Understandable concerns about how the acquisition by SAP will affect Concur.
TripLink, Concur’s key to closing the gap on unmanaged spend, is stuck in low gear. Lots of sales, very few proof points of it adding value – yet.
Palpable angst from TMC execs about the future of their business models in the face of TripLink’s potential to enable off-channel bookings.
So if you’re not a fan of Concur, stop here, because the rest of the story is much brighter. Continue reading →
This morning I pointed out some new frontiers in managed travel to the Society of Government Travel Professionals. Things like traveler friction, trip tailoring, edit rights, Managed Travel 2.0 and traveler dashboards, along with their implications for the government travel program. (here’s the full deck)
Then I shared this slide to make the point that airfares will go up after the AA-US merger:
Fewer competitors in a market result in higher profit margins for the suppliers. Looks like that basic economic theory holds true in the airline category. (For non-government readers, YCA fares are the U.S. Government’s equivalent of full Y fares – fully refundable, last seat availability in coach.)
Namely, the business model for TMCs is going to change.Here’s how I see it:
Fifth in a series on Managed Travel 2.0
First, let’s start with the core issue – the booking transaction. It’s the center of the TMC’s universe. They organize and price their business around this function. Everything else is basically an ancillary service. It’s all about the transaction fee.
No surprise that clients view the transaction fee as a bull does a red cape. It’s highly visible, a tempting target, and instinctively from a procurement perspective, it’s something to attack.
Last week in Beijing I made the case for de-commoditizing the airlines. Even though it was a friendly audience at the CASMA Fall Global Conference, there was some sharp discussion during Q&A. Fair enough, as I skewered American’s handling of its Direct Connect value prop to the business travel community. Here are the key points:
Does Distribution Really Matter? Can it Differentiate Airline Products?
Absolutely. Think about how the endpoint of the distribution chain looks today. You still see flight times, carrier logos and prices. Pretty commodity-like stuff, that. From green screen GDS terminals to mobile booking displays, all you see is a long list of racked-and-stacked flight options.
It’s the equivalent of shopping in the paper towel aisle at WalMart. Price dominates.
Last week my family attended a funeral service for my father-in-law at Arlington National Cemetery. He had a great life, and passed peacefully at the age of 91. He was a highly decorated Navy pilot in WWII. To honor him, the Navy sent a jet squadron to fly over us during the burial service. There are a lot of heroes in our armed services. I’m proud to have known one of them.
My non-compete with TRX expired on Monday, five years after I sold Travel Analytics. This week I’ve been thinking about heroes in our industry. Who might I want to work with? Which firms are working hard to solve the worthy problems? By heroes, let’s talk about companies, not people. So – where are the heroes in corporate travel? Let me think for a while. Hmmm….
Travel managers, watch this 2-minute video about the benefits of open API systems, and then ask yourself how it could – should – be applied to the travel industry:
To me, this video makes the point beautifully that open systems create unlimited opportunities. Closed systems, bounded by definition, can and do create value – but which type do you really want to bet on?
Let’s consider the case of direct connections (DC). As I told an audience last week, American Airlines has done an incredibly crappy job Continue reading →
I recently claimed in this webinar that the travel industry’s innovative golden years were in the 1990s, and that our industry hasn’t seen much innovation (with a capital I) since.
Why the lack of innovation, you ask? I listed three factors, and am adding a fourth here.
Barrier 1: The legacy “Rows and columns” GDS mentality. The GDSs are arguably the most influential – and constraining – link in the travel value chain. Their products and attitudes about travel technology have driven much, maybe most, of the way suppliers, TMCs and many corporate buyers think about the travel technology landscape, for better or worse. Continue reading →
If you’re going to NBTA’s Convention in Houston next week, and you’d like to catch up – let me know! I’ll arrive on Saturday afternoon, and leave on Wednesday afternoon. No firm plans yet for dinner on Sunday or Monday, but a few of us are thinking about Tex-Mex on one of those nights…if that sounds good, you’re invited – the more, the merrier!