Open booking will ultimately have a major impact on the way travelers, agencies and suppliers interact, but maybe not in the way that is currently envisioned. I don’t think the majority of corporations will ever fully embrace an open-booking travel policy (otherwise known as managed travel 2.0), but I do think the presence of competition will trigger innovation in two key areas: data exchange standards and mobility. This innovation would close the gap in the booking experience between leisure and corporate travel.
The reason that most companies will never embrace the open-booking concept is control. For the same reason most companies provide the phones and PCs we use at work every day (yes, bringing your own device has changed this, but there are still many restrictions and controls; it’s not a free-for-all), corporations want to use preferred online booking tools and travel management companies that provide the capability to implement policies and proactively prevent bad behavior. Open-booking technologies can solve the data aggregation and duty of care problems today, but the (front end) implementation of policies and controls remains elusive.
Why the GDS at all? A little history
Before the Internet, the GDS networks solved a major distribution challenge in the travel industry. Without the GDS, it was not possible for people to go to the airport or a hotel to make reservations for travel, so creating a dedicated system linking schedules, prices and availability was a necessary investment. In addition, the challenge of integrating hundreds of suppliers with thousands of agencies all over the world would have been impossible to overcome without a dedicated network to bring all the data together.
Then came the Internet, and in a matter of a few years, the challenge of being able to distribute and aggregate data across many different sources anywhere in the world was nearly eliminated. The rise of the online travel agencies (OTAs) and their subsequent growth had a disrupting effect on the industry as a whole. Travel suppliers embraced this new medium as a way to reach customers, initially through their own websites and later through metasearch engines (see Roomkey) or through their own OTAs. Orbitz, after all, was founded by the five major airlines as an answer to the OTAs, and also as a way to reach their customers at a lower distribution cost. But to date, none of these disruptions have had a material impact on the way most corporate travelers shop for and book travel.
Why has change been slower for this group? When you artificially limit the options travelers have, competition will be limited and innovation will be inherently slow to take place. Because there isn't choice, there is no need to focus on the booking experience. The result of this is that corporate travelers tend to do only the minimum required to get the discounts available to them. If I can go to my preferred supplier site directly and still get all of the negotiated rates, usually I will (see hotel attachment problems). What would need to change to prevent that from happening?
Standards are always necessary as a first step to drive innovation. Establishing a data exchange standard that is robust and extendable is the first step to improving the traveler experience. Why do I immediately go to United.com after I make a booking through my corporate tool? Because I want to make changes to my seat or my itinerary that are just not possible through my corporate tool. In addition to features, my experience on any brand.com site is usually personalized to me.
The banking industry is a great example of where establishing standards enabled major change and innovation. Twenty years ago, it was not easy to move money around. When you got a bill, you had to write a check and physically mail it to the creditor. If you wanted to send money to a friend who was far away, say in another country, your options were even more limited. Western Union set up a dedicated network to connect money with people, but since the advent of electronic payment standards (and the Internet of course), the way we send money and pay bills will never be the same.
NDC, or New Distribution Capability (more info here) is a step in the right direction, but adoption is slow. The GDS companies should embrace this new technology and use it as a way to provide a complete booking experience and differentiate themselves from other unmanaged channels.
According to Phocuswright, mobile bookings have increased fourfold over the last four years, while bookings made on PCs or desktops actually declined last year for the first time. In addition, once consumers use a smartphone or table (or a phablet) to make a booking, they are very likely to use that same channel again.
Why do we all like mobile? For starters, the booking experience has been optimized in a way that makes it better, faster and easier than any other method. I can open the Marriott app and find a hotel in Chicago for next week and complete the reservation in roughly 25 seconds, without breaking a sweat. That experience cannot be matched with my current corporate booking tools.
Another reason we like mobile tools is that many of us are a mobile workforce. Apple has designed the smartphone to remove as much friction as possible, and mobile travel apps are an extension of that frictionless travel experience. I can't think of a better phrase than "friction" to describe my feelings when using the corporate booking tools. Even back-office HR and finance systems have all received a recent facelift and offer more modern Web interactions.
A capable and intuitive mobile-first booking environment that can support any product from any supplier, and one that is personalized to me, would be a game changer as a corporate traveler. I hope that the existing of open-booking technologies will force changes and innovation that will ultimately make the traveler experience better end to end.