Many were surprised when expense management specialist Concur announced tie-ups with Airbnb and Uber. But Martin Ferguson argues that the deals merely reflect the evolution of managed travel.
More than a few eyebrows were raised in the business travel community this week when Concur, a corporate expense management company, revealed it was to start working with Airbnb and Uber.
For some people, the announcement at the Global Business Travel Association (GBTA) convention in Los Angeles was confirmation that a sea change is underway.
Those who champion peer-to-peer commerce, collaborative consumption, shared economies and any travel startup aiming to disrupt traditional processes are rubbing their hands with glee.
“We told you this was going to happen,” they’ll tell you. “Look out GDSs and traditional suppliers, adapt or die!”
However, there is a far more measured view. It does not mark the beginning of a corporate travel revolution.
Instead, it is the continuation of an evolutionary process the industry has been aware of for many years. And, perhaps more significantly, it’s a victory for managed travel.
The traditional model, which many are all-too-quick to mock, involves travel management companies (TMCs), global distribution systems (GDSs), corporate credit cards and preferred supplier agreements with airlines, hotels and car hire companies.
The travel buyer (the person within a company or organisation responsible for procuring travel products and services) is king, sitting at the top of the pyramid making sure everyone plays their role.
For them control is everything, and for good reason. The traveller calls the TMC (or uses an online booking tool) to ask for a flight, hotel and car rental.
The agent makes the booking using their GDS, in which all the travel buyer’s negotiated fares and rates are loaded.
The traveller can’t just book anything because a company travel policy is in place.
All of which means travel buyers know exactly what is booked, when it is booked, which suppliers are used and how much is being spent.
Furthermore, it allows companies to fulfill their duty of care obligations. A law introduced in 2007 requires all UK companies to know where staff are at all times, and to do everything in their power to make sure they are safe. The traditional process allows travellers to be traced at any given moment.
But the proliferation of mobile devices and connectivity has given new powers to the travellers. And it’s not just the so-called Millennials.Anyone with a 4G or Wi-Fi-enabled smartphone expects to be able to shop and book any commodity from any place at any time.
Furthermore, it has given companies selling travel-related products the ability to target travellers directly.
The concern for buyers has been that employees succumb to temptation and book products outside the travel policy.
It does happen. But this “leakage” has never reached epidemic levels. In any case, it would be difficult to blame travelling employees.
They often think they’re acting in the company’s best interests, by trying to find cheaper airfares or accommodation.
And the value offered by peer-to-peer businesses like Airbnb and Uber is almost without question. For some they offer a much more dynamic and cost-effective travel experience.
However, if business travellers did not respect company travel policy this issue would have majorly blown up a long time ago.
Sure, in some companies there are small pockets of what are called rogue travellers. But it is a tiny percentage.
The Concur tie-ups with Airbnb and Uber are undoubtedly an important step in the evolution of business travel.
Concur’s customers, which include some of the world’s biggest corporations, are obviously willing to let their people engage in the sharing economy because of the inherent value the bring to the marketplace.
And we can expect similar tie-ups elsewhere in due course.
But it will be on the travel buyers’ terms. It’s folly to think corporations owe some sort of allegiance to traditional partners and processes. There is no reticence shown towards change.
However, there are some fundamentals such as duty of care and being able to report on exactly what is being spent that can never be ignored. Managed travel is evolving, and it’s here to stay.