Open booking, sometimes referred to as Managed Travel 2.0, has become a controversial topic in corporate travel.
NB: This article is written by Mary Russell, a copywriter at
PhoCusWright.
Under this model, travelers are subject to far fewer restrictions in terms of how and where they book, but continue to operate under their company’s corporate travel policy.
The tenets of MT 2.0 dictate that travelers can:
- Shop anywhere
- Book any supplier – so long as the supplier is safe
- Book anywhere – so long as the booking gets to the employer promptly
- Book anything – so long as the trip is within budget
Companies typically deploy managed travel programs in order to mandate certain behaviors that reduce travel expenses and make them easier to track.
To do so, companies have relied heavily on travel management companies (TMCs) and corporate booking tools (CBTs).
However, as with many things in the travel industry, the marketplace has changed. In the case of corporate travel, the supplier direct and consumer channels have grown enormously in popularity.
Some background
In 2012, booking and expense management company
Concur introduced a new application called Open Booking (now called
TripLink).
TripLink records elements of an itinerary booked by the traveler outside the TMC channel.
By aggregating independent bookings into a single itinerary and then collecting and storing this reservation information, TripLink can notify the employer promptly about bookings that travelers make independently.
There are a number of other suppliers providing somewhat similar services.
Not without problems
Business travelers have been booking out of channel since the concept of managed travel began – but efforts to control bookings made out of channel have emerged.
According to a recent PhoCusWright analysis,
The Open Booking Effect and Its Impact on Corporate Travel, tools that capture out-of-channel bookings can be used to help manage MT 2.0, but are valuable for these bookings independent of a company embracing MT 2.0.
Shopping
Travelers unrestrained by TMCs are likely to book with their favorite suppliers. In this day and age, however, travelers have multiple favorites.
So before they book, they’re likely to browse metasearch and online travel agencies to compare prices. However, many travelers decide to book directly on the supplier’s website, turning metasearch engines and OTAs into free shopping platforms.
Negotiating and obtaining corporate discounts
The biggest benefit of managed travel is the discount corporations receive from preferred suppliers when they leverage large volumes of inventory.
In an MT 2.0 environment, out-of-channel itinerary solutions must ensure that the traveler receives the corporate discount even when booking direct.
Enforcing travel policies
In addition, MT 2.0 tools should verify that each booking meets corporate policy parameters, including class of service guidelines, cost benchmarks and approved or unapproved items for purchase.
Cancellation/rebooking
If a trip booked with multiple suppliers is cancelled or needs rescheduling and rebooking, the time and effort it takes to alter arrangements can be excessive – and frustrating.
With MT 2.0, there may lack a go-to person for rebooking, but progressive TMCs are assuming this role for a fee.
Ticket reuse
In traditional managed travel, when a business traveler unexpectedly can’t take a trip, corporations pay a rebooking and name change fee.
The tickets are then reallocated by TMCs who have unused ticket databases. MT 2.0 does not yet have a system to deal with reusing these nonrefundable tickets; in this scenario, the corporation ends up absorbing the loss.
Critical success factors
In order for MT 2.0 to really take off, the technology will have to catch up. The following factors are necessary for the success of the technology solutions and the new booking environment:
- Travelers must actually want to book directly. The assumption is that millennials will want to book where they please has to be reality. Travelers must have that desire to use out-of-channel bookings.
- Corporations must provide duty of care. The responsibility for this legal requirement can be unclear with open booking. Any MT 2.0 itinerary solution must satisfy duty of care responsibilities.
- Corporations must have the ability to reuse nonrefundable tickets. Currently, TMCs help corporations save big bucks when they reuse nonrefundable tickets. How MT 2.0 will handle this remains unseen.
- Airlines need to get on board. If airlines don’t participate in open booking, the lodging and car rental segments alone may not be enough to make MT 2.0 sustainable.
NB: This article is written by Mary Russell, a copywriter at
PhoCusWright. It appears here as part of
Tnooz’s sponsored content initiative.
NB2: Want to know more about open booking and its impact on business travel? Join us at PhoCusWright Europe (19 – 21 May, in Dublin, Ireland) and join the conversation. Listen, learn and engage as industry leaders discuss open booking, IATA’s new distribution capability (NDC) and other topics that have the potential to completely reshape the business travel landscape.
PhoCusWright is the travel industry research authority on how travelers, suppliers and intermediaries connect. Independent, rigorous and unbiased, PhoCusWright fosters smart strategic planning, tactical decision-making and organizational effectiveness.
NB3:Happy business travel image via Shutterstock.