May 2019, London
Europe's biggest event for commercial and digital travel execs
Competition ramps up as firms vie to be the ‘Netflix of business travel’
The ‘consumerisation’ of business travel is driving innovation in the sector as travellers demand more from their employers. Pamela Whitby takes a look
When Andrew Jordan, the chief technology officer of CWT, joined the company from the media industry three years ago, he was no expert in corporate travel. What he quickly recognised, however, was that this corner of the travel industry was ripe for disruption.
Jordan, who will be speaking at EyeforTravel’s Digital Strategy Summit (May 21-22), had seen the traditional publishers and broadcasters grapple with the arrival of Google and Apple. In a similar way, the Internet had also shaken up the travel industry, but in the corporate travel management space things had remained stuck in the past. According to Jordan, the new management team quickly realised that “there was no Netflix for corporate travel” and that this was a niche that CWT could pivot its business model to fill.
Business travel is forecast to be worth $1.7-trillion by 2022, according to GBTA
CWT is certainly not the only company looking to innovate in what GBTA, the business travel association is forecasting to be a $1.7-trillion industry by 2022. Other corporate travel management companies like American Express Global Business Travel has partnered with Lola.com, the ‘agile travel management company’ launched by Paul English, the former founder of Kayak. Lola.com has recently secured $37-million in Series C funding after annual travel bookings rose by 423% and revenue growth was up 786% in 2018.
While CWT has developed its own itinerary management tool, MyCWT, there are others too like TripIt and the white-label one from Dutch start-up Roadmap, which has secured a base of blue chip clients including Microsoft, Nike, KPMG, Pfizer and Tommy Hilfiger. Microsoft Travel Manager Steve Clagg says one of the advantages of working with Roadmap to develop a fully Microsoft branded app is the agile and fully customisable nature of the platform. Raquel Hefferan, Director Travel and Strategic Sourcing, KPMG, who believes the days of "clunky tools and solutions are over", agrees that the ability to “curate our own content” is a strategic advantage.
Innovation of online booking and expensing tools from firms like SAP Concur but also start-ups like Silicon-valley based TripActions is also ramping up after GBTA research in 2016 revealed that 84% of travellers preferred to book directly with the supplier! Indeed, since the arrival of platforms like Expedia and Booking.com in the leisure sector, business travellers have become increasingly frustrated with the unwieldy tools they have been expected to use for business, and are choosing to circumvent corporate policy and book out of channel.
Jordan is the first to admit that the industry “has been a bit guilty of treating employees differently, of thinking it’s okay to give them sub-optimal tools, like a phone or laptop, or build less than perfect apps”.
However, with consumer tolerance of inadequate apps at an all time low – and there are 70,000 in the travel space – this is compelling trend driving the sector’s shake up.
Stick or carrot and a shift away from costs
When travellers circumvent policy, it is a headache for corporates. One of the ways to address this is to use the stick; in other words to refuse to reimburse any expenses but this, says Jordan, doesn’t address the root cause of the problem – that corporate tools just don’t stack up. (As KPMG has found, this is where the ability to curate content comes in handy, as it is possible to control out of policy offers from third-party suppliers like a seat or cabin upgrade).
While travellers are becoming more demanding, interestingly they don’t want to break the bank. What they do want, however, is a seamless and simple experience, something companies are slowly beginning to acknowledge as Jordan’s presentation at EyeforTravel’s London show in May will address.
“Instead of measuring success by the number of flight bookings made, our focus has now shifted to delivering a seamless end-to-end experience for the customer [in this case the business traveller],” says Jordan. Instead of punishing travellers, he adds, “the experience must be so good that travellers want to book in channel”.
Big corporates can spend north of a hundred million dollars each year on business travel, but until recently nobody has asked what the return on investment of that is
Andrew Jordan, CTO, Carlson Wagonlit Travel
Typically, cost-cutting has been a major focus of travel management programmes, and the focus has been on negotiating the best deals with travel suppliers like Hilton, Delta or Virgin. But, as Jordan points out: “Big corporates can spend north of a hundred million dollars each year on business travel, but until recently nobody has asked what the return on investment of that is.”
This is changing as the technology and data science matures, and around three years ago, CWT started building a data lake that could absorb everything from business performance data to sales data, who is travelling, when they are travelling and so on.
“We have really put a lot of investment and research dollars into digging deep into the data that supports the travel industry, and we are now able to measure the ROI of the travel programme. We are able to drill down and say, for example, that with every dollar you spend on this category of traveller, you are returning four,” Jordan says.
Firms like Roadmap, which has a ROI calculator, also attribute greater value to what the corporate programme delivers to the bottom line. However, Roadmap CEO Jeroen van Velzen says: "What we are calling for is a both-and approach: a new travel management model that is both cost effective and traveler centric."
There is a growing recognition that business travellers, typically on the road to speak at a conference, deliver a sales pitch, build relationships, service a product, and so on, are highly valued employees. So, when companies focus only on costs, and forget about the traveller experience, while they are actually on the road, they are missing a trick. Microsoft’s Clagg, for one, strongly believes that for employees to be highly productive, they must also be given all the right opportunities to recharge their batteries from where to eat to the best way to travel from the airport or where to get a beer. To this end, it has worked with Roadmap to support the traveller with relevant in-destination information in the cities most visited by Microsoft employees.
Experiencing the future
“The whole idea of ‘experience’ is becoming a hot topic, and the work place of the future will not simply be about putting an employee at desk for 45 hours,” says Jordan.
In fact, as business travel becomes far more commonplace, prospective employees are asking to see the travel policy, and may even choose one role over another to avoid flying economy. This is backed up by a recent study from GBTA finds that 79% of all business travellers say their job-related travel experience impacts overall job satisfaction. Given the huge premium for talent this cannot be ignored. As van Velzen puts it: "For high-value employees, travel is a crucial part of the work experience. So, if designing an immersive employee experience is a stated company strategy, you need to ensure this is reflected in your travel programme!"
While looking after travellers, duty of care, and ensuring their safety and security is certainly not new, today’s employees have higher expectations around issues like carbon neutrality and social responsibility, and, they don’t want to be beaten into the ground by business travel.
“Travel takes so much out of you, and particularly long-haul travel, and so we are looking at it through that lens – how do we create a frictionless experience so that travellers are not constantly battling the system to go on a business trip,” Jordan says.
Join us in at London’s Digital Strategy Summit in May to hear more from Andrew Jordan, CTO, CWT, along with other leading industry brands including Accor, Best Western, Ryanair, IHG and more