Q&A: BCD Travel's Yannis Karmis on innovation, new tech, threats to legacy TMCs

BCD Travel is one of the world’s largest corporate travel management companies, with services in 109 countries and sales of more than $27 billion in 2018.

Yannis Karmis joined the company in 2016 after working at Sabre in the dual roles of vice president for corporate solutions and president of GetThere, Sabre’s online travel management solution.

At BCD Travel, Karmis is senior vice president of product strategy and development, leading a team that sets the vision for all aspects of the company’s products, platforms and solutions.

As part of our monthlong series on business travel, we talked to Karmis about emerging technologies impacting the sector, virtual payments, digital identity and more.

What's the biggest pain point in the lives of business travelers that still needs to be solved, and how can technology help?

For infrequent travelers, the biggest challenge lies in getting reliable and actionable information in time to make informed decisions that both support company policy and individual preferences. Can I expense this? What’s my best option getting from the airport to my hotel? What are my options if my flight is cancelled?

For frequent travelers, who tend to be better informed due to past experiences, the challenge is empowerment: does company policy give me the freedom I need to make decisions I know will result in trip value for both my company and me. Traveler engagement platforms with mobile applications are proving invaluable for this, allowing companies and their travel management companies to provide guidance to these travelers at every point within the trip.

To give an idea of how this is playing out, consider some benefits provided by BCD’s TripSource traveler engagement platform:

• Insight: We deliver flight status alerts, including information about gates and delays, in near real time. We make it easy to find confirmation codes and trip details. We provide information about travel risks. We share recommendations on a range of trip-related decisions, from transportation options to whether hotel rooms include Wi-Fi and breakfast.
• Context: We share information to help travelers better understand their options and make informed decisions. We remember their preferences. We provide travelers access to their travel policies and procedures. We make emergency contacts easy to find.
• Empowerment: We provide convenient self-service options within our TripSource platform that give travelers direct control over the trip management process. We give travelers the tools they need to get service in the way that best fits their needs: Click to call their agent. Cancel trips in the app. Chat with an agent.
• Control: We give travelers multiple ways to take control of the booking process. With just a few clicks, they can shop and book from a massive inventory representing hotels in over 200 countries. They can make an air reservation. Soon they will be able to reserve a rental car. We can even make it easy to connect them to their company’s preferred online booking tool. It’s easy to search based on personal preferences – or save their favorite properties.

BCD is working with Travelport, IBM and Hyatt on using blockchain for hotel commission settlement. What are your thoughts on the potential for blockchain?

Blockchain holds the promise of being a transformative technology, but it’s still very early days and there are very limited applications in corporate travel. A key benefit of blockchain is the ability to allow partners to share transaction information with each other in a common, immutable format – a smart contract.

One obvious use case is the settlement of commissions. To accurately settle commissions, there needs to be an agreed truth between the agency and hotelier on what was booked, the appropriate commission, whether the stay occurred as planned and if the commission was remitted. A byproduct of this complex process is that agencies and hoteliers both spend a lot of time and money to track and reconcile commissions. Blockchain lets us rethink the process.

BCD is partnering with Travelport, IBM and Hyatt to explore how blockchain could simply and accelerate commission tracking. IBM is recognized the leading practitioner of blockchain. Travelport brings extensive experience in deploying scale technology to process complex travel transactions. And Hyatt is among the most innovative hotel brands. Together, we hope to explore how blockchain technology can move commission collections into the digital age.

Last year BCD put out a series of papers on emerging technologies such as blockchain, bots, machine learning and virtual and augmented reality. In addition to blockchain, which other of these do you think have the most potential to impact business travel and the work of TMCs in the near future?

Corporate travel has been a pioneer in bot technology for over a decade, particularly in “front office” and “back office.”

Back-office bots are proven and efficient in processing transactions. We’re undergoing a renaissance as we add AI to the traditional configuration engines. A great example here are the bots BCD uses to augment booked data with additional information using AI rules to give travel managers greater insight in their reporting.

Front-office bots, made possible by massive advances in natural language processing and artificial intelligence by leading technology companies, are traveler-facing. For example, BCD uses natural language processing technology from Amazon in our TripSource Alexa skill. We are also testing AI technologies from Microsoft to allow travelers to get immediate answers to routine questions.

How is IATA’s New Distribution Capability impacting your products and services and what are your thoughts about how it will impact distribution in the coming years?

BCD is committed to ensuring our clients have access to the relevant content they need for their travel programs regardless of whether we use NDC or older technologies. We have been a leader in adopting NDC and integrating it into our operations. We recently signed an agreement with Qantas Airways to participate in the Qantas Channel. We previously struck channel booking deals with Air France/KLM and British Airways/Iberia.

Channel agreements provide travel agents who sign up for them access to a wider range of fares and content and allow BCD clients to book reservations without paying the airlines’ channel booking fees. We’ve also signed an NDC agreement with Lufthansa Group while working with Amadeus NDC.

While we have made much progress and invested heavily in NDC enablement, there are still many challenges to address. We are building new air shopping and booking APIs, adapting agent tools, updating mid- and back-office systems and much more with NDC in mind. We are actively working with our global distribution system and online booking tool partners to redefine workflows and ensure we can shop, book, service, reconcile and report on an NDC booking regardless of channel.

Our strategy and goal around NDC is to ensure that companies retain the ability to shop from among multiple competing offers between like city pairs - and can capture essential data needed to keep travelers safe on the road.

BCD recently announced a new dedicated hotel division, Stay by BCD Travel, offering “dynamic, data-driven solutions.” Tell us more about how data is being used for that.

Stay by BCD Travel is going beyond the industry’s traditional emphasis on resource-draining seasonal sourcing, using data to focus on spend management strategies that deploy successful tactics from consumer marketing, such as merchandising and market-level rate targets and price assurance to optimize our clients’ hotel programs.

Analyzing the available data and mining it for insights on an ongoing basis allows BCD to provide a unique approach using digital marketing to build traveler awareness of the hotel program, increase program adoption and influence buying decisions - yielding more value with less effort.

It’s been about 18 months since BCD launched its marketplace, SolutionSource, to connect travel managers to third-party services. How has that been received and what’s planned for that in the future?

Our SolutionSource platform has been extremely well received by clients, technology providers and the wider industry. Over 300 clients have implemented one or more SolutionSource technology partners into their program – with many opting to integrate more than one. We now have 19 innovative third-party technology providers in the marketplace, including six new additions since the year began.

These new entrants offer incredible potential value to the corporate travel industry but are often barricaded by legacy systems and contractual red tape. As a trusted advisor, we want to ensure our customers have access to the latest technology providers to help drive the success of their travel program.

Toward that end, the second phase of our SolutionSource platform supports developers with access to BCD’s APIs and data feeds. We look forward to expanding the number of SolutionSource partners as needed to ensure our customers have the ability to select the partner or partners that best suit their program needs for a truly tailored program.

What are the pros and cons of being a massive global company when it comes to innovation?

The biggest challenge for a global TMC is that massive diversity across regions and countries produces a lot of obstacles when rolling out change across the entire organization. There’s always a given market that requires greater effort and expenditure of more time. We overcome this by investing in open, flexible systems that can be adapted to local requirements while still maintaining global standards and integrations.

Why have financial investors gotten really interested in corporate travel‐focused startups in the last few years? And have you learned anything from watching what those companies are doing?

It’s a great question. Orange is the new black, and boring corporate travel is the hot new landscape for innovation - accounting for a significant portion of the $5.3 trillion global travel market. Travel investors have realized over the past several years that making it in the consumer market means you have to have the muscles (and cash) to go up against not only the large consumer players like Expedia and Booking Holdings, while competing for customer acquisition through expensive channels like Google, Facebook and metasearch engines. And, there is the looming possibility of other tech giants turning their attention to leisure travel.

The biggest challenge for a global TMC is that massive diversity across regions and countries produces a lot of obstacles when rolling out change across the entire organization.

Yannis Karmis - BCD Travel

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Corporate travel is a highlight consolidated market where successful innovators can focus on their technology and rapidly scale sales by winning over travel managers rather than individual travelers or individual trips.

This is great news for BCD because we are looking to harness expanding pool of innovation for our clients. We have built an open platform, developed new APIs and established our SolutionSource marketplace. We recognize that a greater focus on innovation in corporate travel is good for our clients and for us. We are not expecting to build everything our clients want and need on our own.

One thing I’ve learned is that entrepreneurs and venture capitalist are quick to sniff out unmet opportunities in strong markets. BCD is committed to enabling this innovation through partnerships, open systems and investment.

There’s currently a lot of discussion around advances creating a digital traveler identity to enable a seamless journey. How much potential does that have and how quickly could it happen?

It’s time for everyone to start with the traveler when developing new technologies and solutions. Digital traveler identity is an essential investment for any company that expects to remain competitive in corporate travel. Digital traveler identity is not the same as traditional profiles. It’s a suite of capabilities which include traveler identification and access management, travel consent management and traveler personalization. It enables an expanded set of integrations while adhering to more complex regulations and corporate policies.

BCD has been leading this transformation for several years. Most recently, we announced a landmark deal with SAP to deploy their next generation customer data cloud platform. SAP is widely recognized as the leader in digital identity management with a strong focus on B2B and B2C technologies.

The potential here is enormous: in order to make good on the vast promises of personalization, a strong identity strategy, supported by a global platform is critical. This isn’t just about seat preference and form of payment – we are building a platform that creates a 360-degree view of each business traveler, stitching their identity across multiple silos of data within our systems so we can create new levels of intelligence for not only our human agents but the countless bots automating tasks for travelers and travel agents. Identity is where it all begins.

And what about virtual payments – what benefits do they provide and how do you see that evolving in the future?

Travel managers and travelers alike are realizing the value of virtual payment and increasing the demand for it. The usage of virtual payment solutions by our clients continues to grow by strong double digits every year - no doubt in part because a virtual payment address (VPA) reduces fraud, and we know the travel industry is a major target for organized attacks.

VPA also simplifies the payment and settlement processes for travelers. The traveler impact of reconciling hotel charges and automating expense reporting is massively positive, and that drives better program adoption, which makes travel managers happy.

We foresee virtual payment adoption steadily increasing from both the corporate and supplier side. Travelers today expect digital interactions that are easy, seamless and omnichannel. Virtual check-in, location-based services, smart rooms, digital concierges, virtual payment and digital invoice management are just a sampling of the technology hotels are embracing today in response to the changing travel landscape demographics. (Digital invoice management allows us to coordinate virtual payment with the traveler’s Folio when we perform full reconciliation of the virtual card invoice.)

What are the top challenges for CTOs in the travel industry?

• Talent: More than ever, a TMC is hiring for new skills (such as data scientists or software developers) while retaining the deep institutional knowledge that only those with years of experience in the travel industry have. This means we must invest heavily in our people while at the same time creating space for, and attracting, a new breed of professionals.
• Digital transformation in the services industry: A good CTO worth his or her salt is moving mountains right now – removing daylight between what we have always called on the one hand “operations or fulfillment” and on the other hand “technology solutions.” In many cases these are still two distinct operating units. To the buyer – the client, the end user – this doesn’t make sense. True elegance in business travel management comes when the lines between the technology and the service are indistinguishable. This is big work.

Are there any examples of how technology is being used in other industries that you think have implications for travel?

Retailing in the consumer market is driving more sophisticated online shopping strategies. The online and mobile channels are, and will continue to be, the primary ways our clients and travelers experience our services.

Online software sales with low friction deployment and freemium models – all the ways software companies are selling their solutions online is changing the way some buyers are looking to buy. Traditional procurement cycles are relevant and necessary for the most part, but more and more research (and even testing) is being done online by buyers before entering into a direct sales discussion. First impressions for travel suppliers in the digital space are therefore critically important.

Commodities trading – in some industries, buyers are constantly buying and negotiating. Their “always on” approach to procurement is very much relevant to the business travel industry. This is why you see some leading companies moving into dynamic hotel program management – sourcing hotels throughout the year, reacting to dynamic market conditions as they happen. Price assurance solutions already have bots shopping to take advantage of price drops, but new bots are starting to determine when to hold ticketing altogether to wait for price drops. The trader working corn futures has technology to support his or her objectives – many of these themes apply to the volatile supply of business travel.

Banking – payment, payment, payment. Around the world, digital wallets are growing in adoption from the consumer side and pressure for adoption is mounting within the corporate travel space, particularly outside the U.S. where their everyday use is much more commonplace. This brings a variety of challenges as well as benefits (such as greater security through the use of virtual cards) to the industry.