Digital transformation has forced a litany of changes on
both the buyer and seller sides of the travel industry. As Web 2.0 and cloud computing
emerged, virtually all industries began to digitize, and corporate travel
management was not immune. Then a global health crisis leveled its own brand of
disturbance. 

At the same time, travelers heightened expectations for
customer service, and personalized experiences were going through their own step
change. 

Now travel distribution models themselves are shifting.
Caught in the middle, travel managers have found themselves in an ecosystem of
continuous disruption, the latest being new distribution capability (NDC)
driven by airlines. How are corporate travel managers navigating the current
wave of change and how can they best adapt and remain relevant, while keeping
their travelers moving?

Are we using NDC?

In the past year or so since the airlines began to shift
their distribution strategies via NDC in earnest, players at every link of the
value chain have been adopting, piloting, adapting and connecting. The U.S. Travel Association has reported that 24% have experienced challenges with
the rollout; and half of North American travel buyers (55%) say their programs
have not even started to implement NDC. Just as hotels did a few years ago with
dynamic rates, airlines are on a journey to take control of their content
strategies to maximize their product merchandising and minimize distribution
costs. Major players like American Airlines are shaking up the game, targeting
business travelers directly, offering the best rates and tailored offers on
their brand websites. And corporate travelers are responding, motivating travel
management companies (TMC) to change their operational practices. The
disruptions are not only a procedural headache but also require serious
adaptations in servicing and technology.

APIs for direct connections

For brand carriers, the travel industry is all about
creating and nurturing connections. This innovative new distribution technology
connects airline brands directly with corporate travelers. It is basically an
API (application programming interface) connection, many of which are already
widely employed for online travel agencies and metasearch distribution and booking in the
hospitality industries. However, when business travelers book rooms, cars and
flights directly with suppliers, corporate travel managers encounter problems
that go well beyond mere frustration.

Governance issues

Naturally, business travelers don’t care about acronyms, nor
whether they get an NDC airfare, global distribution system (GDS) fare, OTA or direct rate. However, travel
managers need their travelers to draw within the lines because if the company
can no longer track purchases or authorize bookings, they lose visibility and
control over supplier spend. If managers only get purchasing information once
they have been submitted as expenses, they lose all ability to direct spend to
preferred suppliers or optimize travel budget. 

The whole process of off-channel bookings is fraught with
problems of governance as managers need to know that employees are staying in
the right hotels and importantly staying within the spending boundaries.
Managers need to bring travelers back into the managed travel program for
completeness of the approvals process, visibility, the payment of the trip,
traveler tracking and enforcing policy controls.

Disruption management

In business travel, at least a third or more of all trips
change. Travelers who make direct bookings for all or part of their trips still
expect their company to be able to help with disruption or credit management.
Travelers just want good fares within their budget and to maximize loyalty
points; oblivious to the logistical complexity that comes with trying to get
service or support from their TMC if they have no visibility over the booking. 

The challenges in transitioning from legacy GDSs and EDIFACT
to a fragmented technology ecosystem that connects to NDC
is causing a disruption management problem for corporate travel
departments. For now, at least, that generally spells operational friction for
everybody involved.

Frictions and emissions

Travel managers must regain the ability to service and support travelers from
door to door. And they must do so while simultaneously matching the
frictionless, personalized customer experiences that hotels and airline brands
are striving to provide. In today’s atmosphere of sharp regulatory scrutiny,
compliance leaders must mitigate any corporate travel risks. Especially in
large enterprises, business
travel is a significant part of Scope 3 carbon footprints. GBTA’s Business
Travel Industry Outlook Poll reported that 49% of travel buyers say they
are either the lead decision maker or one of the decision makers when it comes
to travel risk management. Travel managers must ensure that employees are
making smart and sustainable travel choices. 

The connected journey

To solve their pain points in 2024, travel managers need
technology platforms that unify the entire travel experience in a single source
of truth, no matter the content source. 

The right travel technology pulls together all travel
channels in alignment with corporate policies. A unified platform keeps
managers in the loop, ensuring they can keep their travelers safe and help in
the event of changes, problems or emergencies. But the technology must
preserve the all-important customer experience, giving them ease, choice and
flexibility, so employees have no need to book any parts of their journeys
outside the lines. 

Moreover, AI tools now can automate
and elevate the connected journey by efficiently offering personalized booking
options for the traveler serving up a handful (instead of hundreds) of options
that align with the traveler’s personal preferences, company policy and
travel patterns. And travel managers get to see the entire picture, both at
the individual traveler’s level and at the corporate level. 

Technology has proven that it sometimes causes problems and sometimes solves
them for corporate travel managers. Historically, about 30-50% of all hotel
accommodations have gone outside of the travel program, direct to suppliers or
OTAs, aka leakage. 

Corporate travel managers have had to tolerate leakage, and they’ve really
struggled to do anything about it because they haven’t been able to offer the
choice and convenience travelers can get through other channels. Now with the
advancement of platforms that can seamlessly integrate all of these diverse
booking offerings, managers have the capability to make their jobs easier while
keeping their travelers coloring within the lines.