Thoughts on Open Booking

Thoughts on Open Booking

I attended this year’s GBTA convention in San Diego and want to provide some interesting trending stories in a couple of areas.   Convention panelists and business travel experts talked extensively about two emerging trends: open booking and shared economy or “peer to peer” travel model. For part one of this series, we will focus on open booking.

Open booking is an interesting concept –– employees are able to book business trips outside the norms of corporate travel policies, service providers or technologies, still somehow catering to business demands and regulations.  While recent industry surveys point to travel managers not warming up this idea, some technology vendors want to seek a play in this space.  At this time, nobody really knows if this phenomenon will catch on; is it a fringe play? Or is it a main stay like online booking, for example? Is it yet another opportunity for TMC’s to offer it as part of their service catalog to their corporate constituents? Regardless, it’s worth exploring why this is happening and what technology trends are fueling the trend.

There are many overarching reasons on why a company chooses a TMC or travel provider such as cost control, compliance to travel policies (approvals, etc.), expense management, travel risk management (which I discussed in a past blog entry), ability to call somebody to change their travel plans due to unforeseen circumstances, somebody who knows the local travel scene in the destination city.   Businesses that send their employees on a business trip have certain liabilities: knowing where such employees are on any given day and having the ability to mitigate any risks that they may have while traveling.  Financial managers want to ensure the expenses for the travel are within the allowed limits for travel and are properly documented for reimbursement and accounting purposes.  They also want to know what savings can be garnered by using the clout of a travel provider and the size of their travel spend.  Frequently, business travelers prefer to pick up a phone and talk to a live travel consultant who is familiar with their corporate travel policies or corporate business arrangements with hotels or ground transportation or if any part of their trip needs to change.

What is open booking?  It’s a buzz phrase (alternatively called Travel 2.0) — in the managed travel industry – allowing business travelers to book their travel where ever they choose (to an extent, of course), while technologies gather and reconcile trip data into a single view for expensing and/or traveler security for duty of care process.  The motivation behind this is clearly the availability of better travel tools and mobile apps that allow employees to search and locate air fares, hotels, etc. I have seen reports of 15-25% of travelers within large companies using this method.   Ease of access is the primary motivation factor.  The travelers who do such bookings are reported to be under the age demographics of the 18-24 year olds – Generation Y.  Often times, we hear them (mostly Generation Y) complaining that the booking tools provided to them by their corporate providers are sub-par in terms of usability and options.  Being able to do their entire business trip planning via a mobile app is another reason why this may be appealing to them.

Along with this, we also see direct access to supplier sites to make bookings has improved in terms of usability, inventory and competitiveness.    What is not clear, however, is how much savings do companies gain by allowing such bookings to happen? Is this a phenomenon that’s has been happening and it’s just something that companies begrudgingly have been allowing?   Why would we change a process that works to accommodate such a small set of travelers?  Is it really worth it?  Is this a trend that opens doors for travel companies including TMC’s as another opportunity to better serve client needs?

After all, many folks ushered in the demise of the TMC when online booking was talked about, but it’s been the opposite in terms of gaining more momentum for the services we offer.   Ultimately, it’s about customer service excellence, where we as travel management companies consistently use technology to augment the customer services we provide.

Any thoughts on this?  Drop me a line.

Sridhar Balaji
EVP, Engineering