Developing the Future Online Booking Tool
Earlier this year Festive Road surveyed and interviewed over a hundred business travel buyers and conducted interviews across the online booking tool community about the OBT experience and the challenges facing booking providers. Three things were clear:
OBTs are resigned to their challenges—Resigned because once full content was a given, now it’s not. Because adoption was a given, now it’s not. They are stuck between a rock and a hard place: They need big investments to overcome challenges created by legacy strategy and to create something exciting for the customer. That investment isn’t there as the OBT has become commoditized.
OBT leaders want a better solution—One COO said, “Leisure travel tools shouldn’t be the goal; we should do better than that.” In other sectors enterprise tools bring a great UI and control together successfully, so it’s possible.
It’s not all on the OBTs—Buyers are part of the challenge. Most don’t look through the eyes of the traveler; they require OBTs to focus on control, not customer experience.
What’s an OBT to do?
In another universe, online travel agencies continue huge investment in product development and marketing. How can OBTs compete against the $10.6 billion investment Expedia Group and Booking Holdings made in marketing their products in 2018?
A 2019 GBTA webinar showed 40 percent of business travelers planned to use OTAs more. Why not? They are more attractive and stickier to the end customer.
Let’s be honest. There’s a future when we are near 100 percent online. We should strive to make digital retailing in corporate travel somewhere travelers want to be rather than where they feel they are supposed to be.”
The market needs to create OBTs which are so good travelers are desperate to use them instead of going off channel. That’s a big challenge when the gap is so great and the financial models don’t support the investment.
An API Answer
Widespread application programming interfaces might drive a more dynamic OBT offering and opportunities for new business models. Three development areas are key:
Democratized distribution—APIs will help further democratize distribution and this will accelerate change, resulting in richer and wider distribution. In addition, many more providers are beginning to drive distribution change from the source of the offers at The Passenger Service System or Central Reservation System level to the consumption of the offers at the point of retailing. This consumption will also move beyond today’s browser-based OBT to channels where the traveler already is—Whatsapp, Outlook, LinkedIn, Salesforce, Slack, etc. Change could come from some of the large tech companies or startups in the aggregation/OBT space or of course the existing travel technology companies, the GDS, OBT and TMC providers themselves.
Attribute-based shopping—The drive towards attribute-based shopping must accelerate. It’s prevalent in our private lives and we already see it introduced in business travel, but there’s more we can do. From inclusion of sustainability parameters like carbon per flight or carbon per available room to productivity metrics or performance indicators like on-time performance.
Policy polarization—The rise in ancillaries and increased diversity of product will result in corporations either having to simplify travel policies to allow an OBT to interpret and apply them easier or, conversely, policies must accommodate increasing variation. The latter will require more sophisticated OBT policy engines.
Ultimately, these developments will lead to the evolution of a “Corporate Consumption Engine” approach. On the back of democratized API distribution, accelerated attribute-based shopping and greater policy sophistication/simplification, growth in AI technology will allow future OBTs to dynamically manage the information provided to the supplier to source the fares.
It will “face off” on behalf of the corporate against revenue and offer management systems with learned behavior and the power of the corporate and individual’s data. Policy will be applied at the point of sale, in context and with the travel manager able to adjust the rules of engagement according to market conditions, company objectives, financial performance and their own data.
Simply put, broader choice and consumer-like shopping overlaid with sophisticated policies will allow OBTs to meet the needs of both buyers and travelers.
A Shifted Position & New Revenues
These developments could enhance the OBT’s position, where they will need money to invest in the development of product that brings the travel experience to life and provides context in the face of huge ancillary content.
OBTs may also need to develop brands that resonate in the hands of the business traveler and are in front of their eyes at all times. That could result new OBT business models, and maybe we’re already seeing them:
Platform TMCs—Platform TMCs that create content, control and customer experience with a single source of truth, regardless of consumption point, will continue to grow. Some will leverage investments in the B2C side of their business to bring consumer-focused developments through to business travelers.
More direct relationships—Buyers will control their OBT delivery, either with a third-party technology provider or by building their own OBT, as one major corporate confided to Festive Road. This would change the primary retailing partner from TMC to OBT, clearly focusing the TMC’s role on fulfillment, concierge service and the total travel management picture. Traditional reseller models would be challenged, and OBTs could consider different revenue streams to increase financial positions and facilitate investment in product and positioning.
Let’s be honest. There’s a future when we are near 100 percent online. We should strive to make digital retailing in corporate travel somewhere travelers want to be rather than where they feel they are supposed to be.