New entrants into the corporate travel market are promising modern interfaces, better user experiences and innovative approaches, keeping established players on their toes and offering buyers opportunities and challenges.
December’s edition of the Business Travel Executive Town Hall conducted via LinkedIn Live brought together two veteran travel managers – Discord senior manager for travel services Sean Parham and Karoline Mayr, Brink’s Inc. director of global travel – to discuss the upside and downside of their experiences working with new providers.
Both Mayr and Parham said they support startups because that’s where they see industry innovation originating. Entrepreneurs offer fresh viewpoints on old problems. If their products and services are helpful, legacy players may mimic them, bringing better solutions to the masses.
Startups tend to be in a better position than incumbents to customize for clients. “That’s really attractive,” Parham told Town Hall listeners. “They can pivot and move in different directions based on what the customer is asking for without the bureaucracy built into the legacies.”
Parham said relatively new companies like his employer expected their providers to move quickly. His previous experience managing travel at another startup, which was expanding into more countries, showed him the disparity. He said the legacy travel management company, using a legacy online booking tool, needed five or six months to launch the service in each new market, while a new entrant could do the same in a matter of weeks.
However, new entrants sometimes try to address too much, focus on the wrong things or have too many constraints to be useful to some prospective customers. Mayr pointed out that several startups in the space combine travel services with expense and payment. The solutions “look wonderful,” she said, “but that’s only if I use their credit card. It just doesn’t work for us.”
Parham pointed out the need for tailoring solutions. “We need the ability to pick and choose because we are all unique, and we all need to be able to plug and play.”
Unproven startups often encounter other problems, such as funding shortfalls. Founders can lose interest and move on.
Pana was a beloved tool for managing guest travel before it was bought and then abandoned by Coupa. Booking tool WhereTo was acquired by corporate travel agency FCM and repositioned for unmanaged travel programs. Another online booking tool, PSNGR1, hit turbulence before being absorbed by travel tech company Snowfall.
The two travel managers each had been stung when certain situations went south. Acquisitions can be good or bad. It does little good when the acquirer tries to execute grand but unrealistic ideas, and the product ends up in the dustbin.
Mayr spent a year helping a startup develop a product before a TMC acquired the company. “Sometimes TMCs see these things, and it’s a good opportunity because the company may not be doing so well,” Mayr cautioned. “They buy it, white label it, call it something else, and then you think you’re buying a new tool and it’s not.”
Technology saved from financial ruin by a TMC can be a benefit to its clients, but may not be so useful anymore to customers that have relationships with other TMCs. “I’d have to move my business to that TMC because it was packaged together,” Mayr said. “That seems a little bit limiting.”
Considerations for Innovation
Despite a few episodes with new entrants leaving a “bad taste” in his mouth, Parham hasn’t shied away from examining more of them. At Discord, he selected Spotnana, a startup travel management tech firm.
“There’s still that level of excitement and innovation that I thrive on,” he said. “I learned my lesson in certain areas where I am a little bit more pragmatic about how I go about it, but I’m still going to explore.”
Doing so means keeping several considerations in mind. First and foremost is determining whether the new product or service meets program needs.
From there, some prospective clients conduct stringent reviews, including infosec processes, as they might with any other vendor. To assess staying power, it’s a good idea to examine financial backers and fiscal health, and check the pedigrees of those involved in running the company or building the product. Fresh perspectives are important, but travel management is complex; an overall dearth of knowledge and experience among a provider’s people can point them in the wrong direction.
“It’s great to have the technology, but you still have to have that human factor,” Parham said. “That’s where some fail.”
And they need to be the right people – those who understand the nuances of corporate travel. “You can’t just put customer service people on the line and expect them to interface with all levels of travelers and different audiences, from the C-level down,” Mayr said.
Contractual protections would be nice to guard against getting burned by a startup disappearing, but those are minimal in many of these cases, according to Parham. “We just have to be prepared to pivot and jump to somebody else if we need to and have a backup situation,” he advised.
Another hurdle is connecting a startup brought in to address something specific with incumbent providers, especially TMCs that serve as the foundation of many programs. The challenges may be technical or commercial.
TMC marketplaces meant to facilitate the adoption and implementation of third-party solutions can be hit or miss.
“I think the marketplaces are helpful to know which tools are compatible and work well with your TMC, but that certainly doesn’t get the product across the finish line in terms of getting my company to pay for something new,” wrote Seth Adam Wood, global travel manager at Lineage, in the event’s chat box.
Parham shared an anecdote from when his company used a large TMC a few years back and he wanted to work with a new tech company. At first supportive, the TMC reversed its stance. “Ultimately, it had nothing to do with technology,” he said. “It had to do with the fact that the legacy had financial incentives coming from different vendors and suppliers, and that was going to jeopardize their revenue stream. It made me so angry that my ability to innovate and bring a good experience to my travelers and to my program was being hindered by my TMC partner for their own financial gain.”
Put off, Parham took the program out to bid and moved it to a different TMC.
Mayr once had been in that boat. “Lots of waiting, lots of being stuck in the middle,” she said, noting that travel agencies can’t be familiar with every tool out there. “No one works for free, so there’s got to be a margin in there for somebody on the TMC side, too.”
These experiences test the wisdom of being an early adopter, but if nobody supports new entrants, how quickly will the industry move forward?
“We need to rectify the old with the new and come to some solutions that work for everybody,” Mayr said. “We’re never going to be innovative and get to that next level if we keep going the same way. Change is needed,” she concluded. “Evolution will happen.”
