Part 4: who’s managing the trip?
Picture a sales director flying from Chicago to Frankfurt for two days of customer meetings. She books through a platform owned by a bank. She earns miles with an airline she has stayed loyal to for 12 years, while the hotel stay gets her closer to lifetime status. She pays with a corporate card that earns her company a rebate, although the airline could be paid directly without a card being involved at all. After the trip, an expense platform matches the transactions and receipts before sending everything to finance.
It is one fairly ordinary business trip involving several companies with very different reasons for wanting to be involved. The bank values the spend and the wider customer relationship. The airline and hotel want her loyalty, while payment and expense providers have their own economics around the transaction. And the TMC brings its own mix of customer fees and other revenues. Each can make part of the journey work better and each gets its piece of the action. Who, then, is actually managing the trip?
The purpose of managed travel
Managing travel was built around a fairly straightforward purpose: looking after travelers from departure to return, controlling costs and making sure the company gets value from its investment in travel. TMCs helped bring together booking, payment, expense and supplier services to achieve that. The arrangement was not always efficient, and connecting different parts added cost and complexity, but the needs of the company and its travelers remained at the center of it.
This series on the Great Convergence has been about how booking, payment and expense are moving closer together, with loyalty influencing all three. Banks are moving further into travel, expense companies are moving closer to booking and TMCs are buying, building or partnering to get new payment and expense capabilities. Parties that once occupied quite distinct parts of the industry are now regularly competing for the same booking and corporate relationship. The risk is that the commercial interests of individual providers begin to influence how travel is booked, paid for and managed, even when their priorities are sometimes at odds with the needs of the company paying for it.
Better connections, more complicated choices
There is still a lot to welcome. Booking and payment should work together more easily, expense reports should require less effort and companies should have a clearer picture of what they are spending. Travelers have tolerated unnecessary friction for years, while travel departments still spend too much trying to stitch together all the disparate information created by the same trip. Buyers should expect improvements to translate into lower costs, better service and less work for their travelers and finance teams.
Choosing a TMC or travel platform is now more likely to involve more decisions about booking, payment, expense, and other services, all being reviewed at the same time. The combination may work well initially, but a long contract can become restrictive if one provider falls behind as technology develops. Buyers need trusted partners prepared to invest in long-term relationships that give them the flexibility to change individual services without disrupting the entire program.
When loyalty competes with company priorities
Loyalty, the land of milk and honey for many suppliers, brings the travelers further into the equation too. Someone who has spent years earning airline or hotel miles, points and status will naturally value the benefits that come with it, and suppliers have become very good at influencing those decisions. Banks have learned the same lesson through card rewards and transferable points.
Some newer travel providers are also promoting personal co-branded cards, creating another incentive that may conflict with corporate policy. These rewards can encourage travelers to book outside the program or choose more expensive options, leaving their employers to bear the additional cost.
Making competing interests work for the company
The travel manager has to make all these competing interests work for the company. They need to understand why a particular solution is being recommended, how the different parties make money, whether the company can see and control its data and who takes responsibility when the trip stops going to plan. The same scrutiny should apply to new technology, with buyers looking for evidence of better service, greater efficiency and lower costs.
Who takes responsibility when things go wrong?
Now put our sales director back on her journey home from Frankfurt. Her connecting flight is cancelled late in the evening, the airport is crowded and the remaining flights are filling quickly. She needs somewhere to sleep, a flight home in the morning and someone to sort it all out. Her loyalty status still has value, her company will still receive its card rebate, and the expense platform will eventually reconcile whatever she spends that night. But none of those things will get her home. She needs help from people who know who she is, understand what has happened and take responsibility for fixing it, and someone who has travel servicing at its core and not just a means for a larger objective
The Great Convergence should make managed travel more efficient, but the commercial interests of individual providers cannot be allowed to dictate outcomes. Many companies involved in booking, payment and expense may find ways to make money from the trip, but the heart of manged travel still comes down to New M.O.’s Core Tenet number one – Trusted Partners. Somebody still has to manage the trip, keep the traveler’s best interest front and center while trying to make their lives easier. Choosing a trusted partner to manage all of these things has never been more important.
Who’s managing the trip? A buyer’s checklist for the Great Convergence
Booking, payment, expense and loyalty are coming together. Use New M.O.’s Core Tenets of Managed Travel as the framework and these questions with any current or prospective partner, whether a bank, supplier, TMC, payment provider or technology company.
Trusted partnerships
- Whose interest are at the heart of the decisions being made by my travel partners?
- How does this partner make money from our program, including fees, supplier and other 3rd party revenues, card spend and loyalty?
- Is travel their core business, or a means to something else?
Traveler care
- When a trip goes wrong, who takes responsibility for fixing it, and how quickly?
- Can we see where our travelers are, no matter the channel they booked through?
Program visibility & performance
- Who owns our booking, payment and expense data and how easily does my trusted service provider make it to use the data and to make decisions?
- Can we bring it together, and take it with us if we change partners?
Traveler satisfaction
- Does this make the trip genuinely easier for our travelers?
- How will loyalty incentives influence where they book, stay and spend?
Scalable standards
- If we bundle services, can we replace one part without disrupting the rest?
- Does our contract length match the pace of change in the technology?
Innovation with integrity
- What does this actually improve for our travelers or our company and is it scalable?
- If it saves money, who keeps the savings?
Get parts 1, 2, and 3 of The Great Convergence series here:
