Corporate Travel — A Reality Check
Corporate travel technology addresses the complex needs of businesses which require their personnel to leave the relative safety of a corporate compound — or these days often their home office — to engage with customers, partners and co-workers located in different parts of town, state or outside of the country.
According to the Global Business Travel Association worldwide business travel spend has doubled over the past 15 years and has reached a staggering $1.2 Trillion in 2016. For many companies, travel and entertainment (T&E) costs represent the second highest controllable annual expense, exceeded only by salary and benefits. T&E costs are not limited to airline, rail, hotel, car rental but are likely to include all costs incurred during travel such as staff and client meals, Uber & taxi fares, gratuities, phone, and data services. T&E expenses include event management, traveler safety and security, and in a wider sense the reconciliation of expenses associated to an employee’s corporate travel. The later can take the form of mobile software or several hours of lost productivity and/or accounting expenses.
Consider this: the most common line item on a corporate travel expense sheet is a $12.62 Starbucks bill.
The Corporate Traveler
Unlike today, my past corporate travels did not regularly take me to the Starbucks in town but to another country. However, pre-travel arrangements were most often limited to placing a two Minute phone call to Lufthansa’s VIP Desk in the German town of Kassel. Lufthansa — a member of the STAR Alliance group — refers to their card-carrying high-fliers as ‘senators’. As in the Washington D.C. variety, the moniker was bestowed onto me not by popular vote but by campaigning using my company’s money to convince the members of that group to elect me over other candidates who chose to spend their resources on the concerns of the competition.
During 2000–2004 reaching the required 100,000 votes/miles was an easy feat on my part as my duties included tending to the legal concerns of several German and British entities on a monthly basis, while our corporate headquarters inexplicably occupied parts of a sleek office tower situated in Southern California; its main feature at the time included a first-row seat to the air show held yearly by the Air Force stationed in San Diego. — Remember Top Gun? Think of your humble correspondent as the spectator version of Maverick.
You could have just called
Even though our own venture fund was heavily invested in video conferencing technology and voice over IP (“we would have, should have, could have beat Skype”), my own experiences confirmed the rule to me that the smell of leather seats in business class, and sparkling of free champagne are a necessary means to fostering the purposes of any commerical enterprise.
This theory however was brought to a test by an experience some ten years later, when my attendance was requested at a small convention addressing the intersection of energy and telecommunication. This trip took me and a co-worker from San Diego to the bustling town of Bakersfield. The experience included five hours of new car smell — dispensed by a palm-tree-shaped card-board dangling from the rearview mirror of the rented PT Cruiser — and a crumbling oatmeal raisin cookie at check-in into the local Residence Inn.
I like to tell myself that it was at that moment that I realized that impressively large airplanes and exotic foreign countries might be the first picture coming to mind when giving thought to business travel, but that the reality might be slightly different.
While my early corporate travel experiences included monthly twelve-hour business class airplane rides, crossing an impressive number of time zones, these adventures are very much the exception to the rule. Most travel experiences — including those related to economic activity — are limited to the proprietor’s or employee’s private vehicle; the economy option of a local car rental agency and maybe an overnight stay at a budget hotel. However, more often the destination will be the local burger joint.
McDonald’s ranks second on the list of most expensed corporate travel line items.
Both trips remembered in these introductory musings were undeniably taken with the same intent: to nurture the commercial activity of the corporate entities that I had chosen to partake. But for the most part this is where the similarities ended — except: they did not — at least not from a ‘technology perspective’.
Corporate Travel Shopping — Phones and Credit Cards
What my fancy overseas trip and the drive in the Chrysler past grazing cattle had in common, was that pre-trip planning, as well as most of the events during my travels relied on a phone and a credit card. And while my current iPhone 7’s technological capabilities trumps that of my Motorola L7089 (promotional slogan “Bridging the Atlantic for travelers”), it would not have made a difference to my booking experience of that $8,000 business class ticket in 2002 or the call I placed to for the $80 car rental in 2012: both booking experiences were equally convenient and the PT Cruiser’s leg room rivaled that of my business class seat.
Corporate Travel — Booking
I know, you were expecting an update on current travel technology — I promise, we will get there. But please allow me to add one more stop which might hold the clue for a trend or outlook into the future of corporate travel technology.
In 2014, I was put in charge of the operational concerns of an entity that could have been at the receiving end of either of my calls: the fancy overseas trip in early 2000 or the PT Cruiser inquiry in 2012. When I was tasked with improving the workflows of a business travel management company. And, — very much to my surprise — it was easy to see that my phone calls — even though a decade apart would have created identical actions and involved identical technologies: a travel agent would have pushed the button on his desk phone to receive my call, retrieved my traveler profile using a text entry on a blue screen terminal reminiscent of that of the good-old IBM 3270 and read my options to me. The most noticeable technology differences to any outside observer would have been the sleek LCD-monitors mounted on a dual stand — which replaced the 20-pound cathode ray tube monitors that can still be seen at many airports around the world and which a occupied my own airport counter desk in 1994 while trying to comprehend while the blue screen was not responded to my BASIC command language but instead insisted on referring to itself as Amadeus.
It occurred to me then — mind you, 20 years later — that in many aspects the interaction between the corporate traveler shopping for travels product and the agent booking it seemingly had not been significantly influenced by technology.
What about Apps?
You might say, ‘alright, so you are lazy and prefer bothering another human being who is working on your behalf who just happens to be limited to a set of technology that has not evolved much since Barry Gibb squeaked ‘staying alive’ and your fingers probably lack the dexterity to swiftly navigate the latest booking app. And you might be right on the second charge.
You may further accuse me that I am limiting my anecdotes to pre-travel arrangements and what about all the other elements that make up business travel that certainly experienced a massive overhaul from the significant computing powers now available to every three-year old who — unlike me — has enough eye-thumb coordination to swiftly punish a cartoon bird for irritating his cartoon-self?
Being trained in human psychology and classical literature, I admit my default tendency is to create a narrative with myself at the center of a story — the stereotypical ‘Hero with a Thousand Faces’. To mitigate the limitations this hero’s journey carries with it, I spent several weeks interviewing executives of power-players, start-ups and start-up-power players who — by virtue of their own positions — provided different interpretation of a snapshot of history we will refer hereto as ‘the current state of corporate travel technology’. While I asked these experts more or less the same questions, the one thing their answers had in common was that they had nothing in common with my story or each other.
Pattern Recognition and Corporate Travel
Pattern recognition is a branch of machine learning that focuses on the recognition of regularities in data. While technologists closely relate it to machine learning, it is also a function deeply imprinted into human DNA by several hundred thousand years of evolution which often defined survival of the fittest as recognizing the outline of a predator in the grasslands of the African Savanna and later Yellow Cabs in New York City. Such handicapped, I wrestled for weeks with establishing patterns which could ensure the survival of the fittest technology in corporate travel. I failed, corporate travel technology is destined to die out. But I am getting ahead of myself, after all ‘the journey is the destination’ — right?
Taking a trip
Any trip can be broken down into at least four necessary steps:
· Travel Planning and Shopping
· Travel Booking
· The trip itself
· Post-trip necessities (such as expense reconciliation)
Depending on the size of an organization each of these four steps could be performed by the same person or each step could have had an individual assigned to it who performed just that function.
Additional complexity can be introduced by an outside entity involving itself in two or more of the steps — a function most often referred to as ‘managed travel’.
Corporate Travel Search Technology
As of today, corporate travel search technology in a narrow sense is mostly the domain of expense management solutions (i.e. Concur Travel) which provide a customized experience for the traveler working for a larger corporation or enterprise.
In a wider sense corporate travel search technology includes search engines, meta-search engines and online travel agencies (OTA) — either one can take the form of a website or smartphone application. The commonalities here are the intent of the user while the lines between the different applications are becoming blurred.
Travel Product Search for the Enterprise
The technology needs of enterprises and large corporations are vastly different from that of a sole proprietor or small business. Laws, regulations and reporting requirements have a way of influencing technology, including those used for corporate travel. While small companies might often get away with the book-it-yourself approach, larger companies — specifically publicly traded ones — require policies and technologies keeping track of the adherence of the same. Therefore, employees of these companies will find that their travel shopping choices are often determined by the employer limiting searches for travel products via a corporate expense management tool integrated into the accounting system of the company. The fulfillment of the travel products is most often managed by a travel agency with contractual relations to one of the three remaining Global Distributions System providers (more here), which might further limit the product search although it could be argued that the enterprise technology indeed creates more options — i.e. via corporate contracts and consortia membership, and potentially direct access to vendor inventory.
Direct Connect “Technology”
As of September 2015, the Lufthansa Group, assesses a fee of 16 EURO to tickets bought via a Global Distribution System; an example British Airways intends to follow. According to its website, the conglomerate also offers corporations direct access to the exclusive portfolio of the Lufthansa Group Airlines and suggests employing the assistance of one of 16 ‘technology partners’. While pilot programs for ‘direct-connect’ between Lufthansa and Siemens as well as Lufthansa and Volkswagen were announced in 2016 it is not clear if this connection involved technology provided by a GDS (here specifically Amadeus) or what standard — if any — these connections are using. What is clear at this point is that neither have other airlines announced penalties for GDS usage nor have they introduced ‘direct connections’ to enterprises, large or small. Given the complexity of the integration of any real-time inventory system — particularly one as complex as air travel offers — it seems a daunting task to achieve a return on the invested time and money even for the largest enterprise partners.
At a recent Phocuswright conference a Lufthansa executive was making the case for ‘Direct Connect’ by likening the sales of airline tickets to that of buying a car: a consumer, he suggested, wanted choices for the interior of the car, the color and other features based on his or her own taste. In talking to several corporate travel managers however, I found the decision-making process was closer to that of choosing a gas station: the travelers asked to get from A to B and usually did not care too much about the brand of gas but would care not to pay more than absolutely necessary — the lowest airfare trumped the brand almost every single time and in some cases corporate policy did not even allow for another choice. In travel management speak this is referred to as “lowest logical fare”.
Corporate Travel Search Technology — A Reality Check
For any corporate traveler not enhanced (or hampered) by a corporate expense management tool, travel search will likely originate like any other search: on Google or to a lesser degree another search engine. Entering a departure and destination point Google will display (paid) results for a meta-search engine (MSE) or online travel agency (OTA). As mentioned, the lines between MSE and OTA are blurry even within the same organization as the same company might in some cases resell travel products and in others simple act as advertiser. For the technologist and corporate buyer these distinctions and in equal parts uninteresting and annoying. Expedia and Priceline have lead Travel Weekly Yearly’s Power List for several years now, each besting corporate travel management giants American Express, Carlson Wagonlit and BCD Travel.
And, while “googling” has been the most common use of technology for corporate travelers for more than a decade it seems to have not been perceived as serious competition to existing corporate booking technologies since the search engine was not selling travel directly.
This sentiment towards the Mountain View company changed when Google acquired ITA Software in 2010 for $700 million (more here). While the press release read that the acquisition would benefit passengers, airlines and online travel agencies, the later as well as Global Distribution System (GDS) seemed to strongly disagree. OTAs, GDS and other technology companies joined together using FairSearch.org as vehicle to successfully lobby for antitrust investigative activity in the acquisition. The Department of Justice subsequently forced Google into concessions prohibiting it from excluding others from using the technology while also not allowing the the search engine to enter agreements with airlines that would “inappropriately restrict” an airline’s right to share seat and booking class information with competitors of Google. These restrictions however ended in October 2016.
Book on Google
Unless you are a technophile like me, you may not know that Google Inc. — the public company — does not exist anymore. It is Alphabet Inc. now and has been since October 2015. Its Internet presence can be found at the Internet address abc.xyz (no, that is not a typo — it is that obscure). Equally obscure is the company’s strategy for integrating direct booking into its search results. While a pilot program with Lufthansa called “Book on Google” seems to have quietly been discontinued, search engine’s users can buy Virgin America Tickets on Google and the search engine will have already added your name, email address, phone number and birthday to your booking — provided of course you have Google account and are logged into it.
Hotel direct bookings are more obvious to find on Google and a growing list of ‘Google Integration Partners’ is ensuring that search engines users will be able to book hotels directly from a Google search results. But the experience is not limited to shopping and booking travel since Google is likely your email service or you at least maintain a Gmail account for all of the useful services Alphabet has to offer. If you own an Android phone you know what I am talking about. This takes us to the topic of apps: “OK Google?”
Mobile Apps and Corporate Travel
The first iPhone was released by InfoGear Technology Corporation in 1997 but did not make a lasting imprint in consumers’ minds, likely because it was limited to phone calls, emails and light Internet browsing. When Apple launched its first iPhone ten years later it followed it up with a software development kit, allowing developers to create applications for the phone. A decision which some ten years later turned iTunes into a virtual marketplace boasting millions of applications for every imaginable use case now usually simply referred to as ‘apps’.
It is not surprising therefore that almost every company addressing the needs of travelers has found its way into iTunes or the ‘Play Store’. The later term is the moniker Google chose for allowing developers to peddle mostly identical solutions on its somewhat more open phone operating system Android; a company it had hurriedly had acquired four months after the first iPhone was released.
Travelers are now app-enabled to buy airline tickets, get updates on flight statuses and check into their hotels. The most visible impact though might be that busy and important corporate travelers do not have to engage with any distractions from passengers sitting next to them on a plane or check-in-lines. Intent stares on 8” screens glued to another person’s palm clearly indicate that this person is not to be disturbed as he or she is probably just closing another $10 million funding route for a start-up powering the app-efficient sharing of dog brushes otherwise needlessly lingering in the corner of broom-closets. Like the bitten-fruit commercial states: “If you can think it — there’s an app for that” — right?
Certainly, there are thousands of smartphone applications which would make my life easier and more enjoyable — and most importantly help me share that joy with all my friends and loved ones who are surely interested to hear that I just purchased a ticket to the city that never sleeps — no, not “New York” — everybody seems to sleep there all the time especially it would seem when riding the subway. So, while not sleeping in Las Vegas, Nevada during my annual corporate visit to the Consumer Electronics Show I am able to provide a Minute-to-Minute update of my fingers smutching up yet another high polished screen with a coat of powdered sugar — my corporate travel experience includes lots of Dunkin Donuts.
The correlation between smartphone ownership and business travelers is high. But then again, the adaption of anything keeping children distracted long enough to accomplish a peaceful trip to the local mall has likely been more rapid — utility and urgency driving adaption here. And, anecdotal evidence reports of pre-teens teaching their business-traveling parent multi-touch on their new smartphone without taking their eyes of their own mouse-ear-equipped device — exterminating a flock of seagulls or zombies while easily entering credit card numbers into the latest 12-step app to book daddy’s flight to Boston.
Both iPhone and Android phones keep usage statistics on the device. To find if any travel app made your personal Top 10 check your app statistic next time you are in a slow Starbuck’s line or while waiting for the gentle touch of the Transportation Security Administration agent.
Artificial Intelligence in Corporate Travel*
Wikipedia defines Artificial Intelligence (AI) as intelligence exhibited by machines. Colloquially, the term “artificial intelligence” is used when a machine mimics “cognitive” functions that humans associate with other human minds, such as “learning” and “problem solving”. However, a more accurate term for this is ‘Machine Learning’.
As programs — including apps — become increasingly capable, mental facilities once thought to require intelligence are removed from the definition of AI. For example, optical character recognition is no longer perceived as an exemplar of “artificial intelligence” but is now considered a routine technology. Capabilities currently classified as AI include successfully understanding human speech, intelligent routing in content delivery networks, and self-driving cars — all of which are currently in the last stages of testing, largely under supervision of one entity.
Put these pieces together and you have the perfect shape: a circle and the end of the hero’s journey. Technology circles around human beings and as we put the spotlight on us, we see us talking to our phones a voice will answer and our travel experience will begin.
// *For a more earnest review of A.I. in travel see my research paper at Phocuswright.