That Was the Year That Was
IF I had to describe the business travel industry in 2018, the words would be consolidation, technology and fragmentation.
Globally, the two big events were Amex GBT buying HRG, and very recently, Travelport being bought by two private equity firms. The latter is a throw of the dice since private equity strategy can be anything from keep and improve to break up and sell. Locally, we saw CTM buy the TMC portion of Platinum, and Helloworld’s purchase of the Magellan group. Magellan’s sale was a tad controversial since it had earlier established itself as a breakaway from the major buying groups.
For online booking tools (OBTs) it was a case of steady enhancement rather than big leaps forward. AI became the shiniest thing in the OBT shop window, although it is perhaps more valued by the OBT suppliers than by the travellers. However, the big breakthrough of OBTs being able to handle complex int’l bookings, potentially replacing TMCs, is still some years away.
Of course, the major tech event in the supply chain was the forward march of NDC. Exactly how this IATA driven set of protocols will manifest into new inventory platforms is uncertain, but it is very possible that agents and TMCs will need high NDC capability to offer full competitive inventory within a few years. Blockchain, on the other hand, remains a good conference topic but of no immediate import. Globally and locally, TMCs are starting to differ in their “build or buy” technology strategies. For example, CTM is pursuing a path of building its own OBT and other systems, whereas most of the market is sticking with an IT insourcing model. Amex GBT, with its purchase of the major Euro-based OBT KDS, is playing both games. It’s interesting to reflect on Flight Centre’s journey here, shifting in recent years from the build model back to the buy approach. Regarding fragmentation, Uber, Airbnb and their like gained acceptance from corporate travellers and therefore travel managers. The process of incorporating them into the managed travel booking process is in its early stages. The main issues are still booking, reporting, policy compliance and duty of care. We saw two TMCs manage public challenges and the resulting PR issues well. The incidents brought the general themes of transparency and probity to the fore, and I would expect TMCs to compete by demonstrating their good practice more in the future.
On the operational front, the reducing pool of experienced corporate booking consultants was the main issue, for TMCs and their clients. Globally, business travel spend increased by an estimated 7.1% compared to 5.8% the previous year. Total global spend is sitting at US$1.42 trillion annually. On that note, I wish you all a great Christmas.
Uber, Airbnb... gained acceptance from corporate travellers