As part of my previous role as head of Global Development at the Global Business Travel Association (GBTA) I was occasionally asked to help kick off seminars and conferences by providing industry perspectives on hot topics. Nothing’s hotter than the challenges buyers face in the rapidly evolving travel management landscape. These sorts of talks can be a little dry if one presents too many heavy research facts (and we have plenty of those at GBTA), so I usually start my presentation by explaining that in addition to data from our GBTA Foundation studies on price increases and the latest business travel demand growth statistics I also draw on what I call my “Ghostbusters Insights.”
I trust you will recall the film “Ghostbusters” from the 1980s, but if you don’t then I am glad to be reaching a new, younger audience with this post! In the film the three protagonists are crazy, ghost-obsessed nerds who recognise that an increase in the appearance of a green, gloopy substance called “Ectoplasm” indicates that a huge event is about to occur, although in the film it happens to be a lumbering, paranormal monster in the form of the Stay Puft Marshmallow Man. They use the marshmallow man as the headline monster because it seems harmless and cute but of course as the film progresses it soon becomes clear that he is quite clearly the opposite.
My Ghostbusters Insights spring from the trends I recognise after speaking to industry folk as I work through events around the world. During each conversation I see ectoplasm emerging. This ectoplasm is essentially little nuggets of information related to a given topic, and the more conversations I have, the more ectoplasm I can see. And the more ectoplasm I see around a particular subject, the more I know that the business travel equivalent of the Stay Puft Marshmallow Man is just around the corner. And so whilst a trend may first appear as relatively harmless, positively beneficial even, as we have learnt from Ghostbusters, all may not be as it appears and the harmless can soon emerge as a threat.
I’m seeing a lot of ectoplasm around User Behaviour right now. It’s clear that the main two business travel users, the traveller and the corporate buyer, are both trying to find their balanced relationship in a market where changing traveller demands are dominated by their leisure experiences, and the buyers’ behaviour is driven by traditional corporate values of control and process. The travellers’ booking expectations are growing and their corporate travel providers just aren’t able to meet these expectations because of the layers of control and approval still inherent in the system.
But the supply side is trying to change that. In particular we can see this in the airlines through the creation of distribution standards in IATA’s project, the New Distribution Capability (NDC). The thinking is that the creation of XML standards will allow the airlines the opportunity to strengthen their merchandising, to allow a more customised and personalised service to the end user. I call this “Amazonisation”.
Drivers of change such as these go a long way in shaping the business travel arena in emerging markets, where we find the biggest growth because they are less constrained by legacy systems, processes and practices. It’s no co-incidence that the first successfully completed NDC pilot was based in China, a region poised to become the globe’s biggest business travel market in the next 18 months.
This revised airline approach relies heavily on BIG data, and NDC will certainly increase both the need for and the capacity of huge amounts of data to create a more personalised, Amazon-style approach using not just historical booking data but softer data like social network info etc. More targeted products are already being created using data to identify revenue opportunities, and those who control and manage spend within corporations are having to work hard to deal with increasingly new inventory types in the form of ancillary services.
And then on top of all this, there’s the demise of the corporate machine (Blackberry) and the acceptance of Bring Your Own Device (BYOD).
BYOD is facilitating new leisure travel providers —building new business models on the back of mobile technology —to toy with the business travel market. And the new, funky travel brands, like Uber and Airbnb, combined with much more access on the move, are fuelling travel experience expectations.
The drift from the traditional process of managed travel over the last 10 years, created by these factors, has been exacerbated by global phenomena like the economic crisis, terrorism, wars and world health scares. This has caused the airlines to continually seek out new business models to survive, adopting no frills policies, ancillary charging and tentative moves towards more direct connect.
All of this ectoplasm means that we need to ask ourselves not if Open Booking is attractive to buyers, but if we are implicitly on an inevitable slide towards an Open Booking environment because the suppliers will dictate the channels in which they sell. Is Open Booking the equivalent of our Stay Puft Marshmallow Man?
In an open booking environment policy will simply dictate budgets and the reporting process, and the traveller will decide with whom they fly and how they buy their tickets. This open process initially undermines the ability of the travel manager to strike supplier deals, but it could lead to even more robust negotiations based on actual behaviour—but only if a corporation can gather its total spend data. And, of course, we all know that Open Booking poses issues with both Duty of Care and the amount of time staff spend researching travel plans, but these issues are not new.
The new environment requires the travel manager to be more focussed on Traveller management – and a better use of persuasion rather than mandating. The key here is more effective communication using techniques such as gamification to encourage the ‘right’ behaviour and buyers should be embracing the use of BIG data themselves to create more detailed traveller profiling using demographic and behavioural variables. This segmentation can then be put to use to tailor both travel policies and communication to drive compliance and savings. In this scenario, travel managers will essentially become marketers.
As we all know, the role of the travel manager and the buyer is changing. And what’s clear is that ALL parts of the supply chain are going to need to find new ways to deliver value.
An environment is being created where airlines have the opportunity to more clearly drive product differentiation and revenues. This means we’re looking at an impending battle with a traditional approach to procurement. As this battle between travel procurement and airline marketing intensifies, alongside it will be the increasing tussle between traditionally controlled travel management and the ever empowered traveller.
And this is where the opportunity lies for anyone in the intermediary space to find a new role. Just because there may be an increase in direct sell channels in an increasingly open booking environment doesn’t mean the role of the intermediary is defunct. The opportunity for progressive distributors and other intermediaries who provide added value services is better than ever. The corporation is going to need help—and not just the help it used to look for in the form of efficient transactional processing or monthly management information.
Oh no, the corporations of tomorrow are going to be looking for Ghostbusters, those passionate experts, né nerds, who can see what’s coming to turn their world today upside down and help them bring order.
So “who you gonna call”?!