A travel management company operating in Jan 2021 will be faced with a whole new set of challenges compared to both 2020 and 2019.
Business travel volumes are unpredictable. The travel landscape has become more complex and we have a reduced workforce.
The BTA says 50% of business travel jobs are at risk and a recent survey of the SME sector by us showed that on average TMCs have made a third of their staff redundant.
Complexity is heightened by a “double whammy” of the effects caused by COVID-19 plus Brexit, if you’re a U.K.-based business. One could say it is a perfect storm. Complexity requires management and this provides opportunity for TMCs.
Technology will help us overcome these challenges by delivering information at the right place and the right time and by using data including AI and machine learning.
Travel policy management
Travel policies will be more changeable in 2021 as corporates react to the ever-moving complexities of COVID-19.
Traditionally, changes would come from the corporates’ travel manager and communicated via email or call to the TMC.
The TMC would then filter that information down to their teams and systems and online booking tools. This whole process could take days.
A new technology tool to speed up the process is emerging that will update all the systems in real-time, so that travel restrictions to countries, regions or cities are implemented immediately Radar by Zenmer is one such system that Element in the U.K. is distributing.
Duty of care
Over the past six months we have seen a steady flow of enhancements being applied to existing technology.
For example, duty of care systems that track travelers’ whereabouts now incorporate a “COVID Risk” rating, while websites such as Viselio provides details on visa requirements and options to book a COVID-19 test.
These will continue to be useful in 2021.
Specialist information companies have enhanced their offerings in the form of new services, and some have offered those via APIs.
This is extremely useful as it makes it possible to get consistency of information across additional channels. This will build in 2021.
For a TMC working with travel arrangers over the telephone and online booking tools, it is clearly beneficial to have COVID-19 travel advice, for example, flowing to the agent and directly to the arranger via the online booking tool.
And great if that information’s source is the same. Then it is important to keep the traveler aware of changes to that info before and during the trip. That same information source can be plumbed via API’s into a mobile application.
COVID-19 has made a marked impact on resources and the industry has adjusted. On average, a TMC in the SME space has made one in three employees redundant.
When demand for travel comes back, and volumes pick up, customer service levels will be challenged. New employees will need to develop relationships previously established.
Technology helping with personalisation will be important. The ability to flash up previous trips that a traveler made within the booking system is useful, “I see you just returned from Paris, how was the Hilton? Would you like me to book the same hotel again for you?”
Navitas and Agentivity, for example, have been working on a solution around this and it is in pilot with several TMCs.
Maximize profits – remarketing
With such a long period of low volume, TMCs will be looking to maximize opportunities on each new booking. That means ensuring hotel attachment rates are at an all-time high as well as ensuring ancillary services are offered at every possible stage.
There are tech startups emerging (Grapevine and ReTravel), offering remarketing solutions which promise to help reduce leakage from TMCs.
They will exploit booking data to understand when certain services have not been booked (e.g., hotel, airport parking, car rental). A crafted consumer grade email to the traveler/arranger offering these services at the opportune time will be the method.
Machine learning will begin to analyse the most successful method and tailor the offer to the individuals. This means the AI will know that for person X a WhatsApp message 24hrs prior to the departure offering airport parking will be successful compared to person Y who will respond better to an email 48hrs in advance of departure.
New Distribution Capability
The topic of NDC continues to gain pace, with quite a few players vying for market share. All the while the three major Global Distribution Systems fail to reach commercial agreements with the airlines the new entrants are growing and adding more carriers and more functionality to their products.
The GDSs are finally competing with a wider group than the traditional oligopoly group that they have been complacent with for so many years.
Within corporate travel it is not only the ability to book NDC inventory but to be able to service the booking effectively and efficiently and to be able to process it down stream (invoicing / reporting etc). Those companies that truly understand the issues for TMC processes and find solutions to solve them will win out.
Some NDC specialist companies are now producing GDS back office files which help the invoice process.
Still missing is a system able to grab GDS bookings, NDC bookings, other direct booking sources (e.g. low cost carriers, bed banks) and offer one single place to be able to view and interact with the bookings (modify, cancel).
Today the GDS is the only tool that really offers one centralized place for everything and with complex commercial models TMCs, understandably find it hard to know what will trigger an Agency Debit Memo (ADM).
I imagine that at some point in the next few years the GDSs and the airlines will finally figure out their commercial challenges and we will get NDC content in the GDS as mainstream. If they do not, a huge amount of development cost by the GDSs has been wasted.
TMCs need to wave goodbye to their GUI (graphical user interface) cryptic entries in favour of nice new ones the GDSs have been developing as that is where NDC content can generally be found.
It will be interesting to see how the NDC specialists will adapt to NDC becoming mainstream in the GDS. To compete with the GDS they would need to fill some gaps quickly around hotel, car rental, and I expect they will utilize the wealth of API options.
NDC is important from an improved retailing experience but also from a commercial perspective.
With more and more airlines adding surcharges for booking on the GDS as well as removing lower tiers of fares, the GDS is simply becoming a more expensive environment to book in. As has been said many times, this model needs to change.
Online Booking Tools
The OBTs will face some challenges in 2021, one being with respect to resources. Those businesses that relied on transactions rather than annual profile fees have had to make redundancies, which means road maps have had to be ripped up and new slimmed down priority lists created. There may be an innovation drain because of depleted workforce.
The OBTs might have added to their roadmaps the integration of new information sources that deal with COVID-19.
These integrations will help to get people booking again and are needed to try and boost the confidence of corporates and their travelers.
Let us not forget that traveler confidence is at an all-time low and interacting with a human, might be the preference to begin with. OBTs will, I am sure, bring consistent and accurate info to the booker to help to get transactions flowing again.
In some respects, the OBT workflows are ideal with regards approval processes, which are likely to be more complex in 2021 compared to a year previous. So, from that perspective the OBT’s have a strength to play on.
Automation is no longer a nice to have in 2021, TMCs need to find ways of working that avoid the costly touch of a human being. Fully touchless bookings are the holy grail.
I predict that in 2021 companies that specialize in mid-office processes will be busy. Focus partners are working with several companies in this area but notably Midoco and Procon.
Automation in the SME space is a big differentiator and will allow the smaller TMC to bid for much larger accounts. We might well see quite a bit of acquisition in 2021 as smaller TMCs are consolidated, a good scalable mid-office process will allow the TMCs to achieve much more rapid growth.
One of the advantages of automation is that data becomes much cleaner and then the possibilities open for what you can do with that data. Data ties into most aspects of technology, whether its feeding a remarking solution or a duty of care product. Good clean data will continue to be the backbone of a TMC.