Dan Ruch, Founder and CEO
Rocketrip was launched in 2013 to help companies save money by rewarding their business travelers for positive behavior. Since then the company has attracted funding of more than $32 million.
Before creating Rocketrip, Ruch was entrepreneur-in-residence at Genacast Ventures for 12 months. He also had a four-year stint at Tremor Video and was a director at AOL.
Rocketrip was a forerunner in a number of startups targeting business travel, do you think the sector has changed for the better since you launched in 2013?
In many ways, I do. The overarching trend in business travel seems to be toward consumerization. People travel for business in a way that’s increasingly similar to how they travel for leisure.
For instance, travel booking is moving more toward a self-serve model. Whereas business travelers used to book with an agent over the phone, it’s far more common now to book online.
Corporate online booking tools are ubiquitous for large companies, and employees at organizations without managed travel programs use the same websites they would use to book a vacation.
One of the consequences of this is that employees have more control over their trip planning and are embracing a wider range of options. Of course, this is also a consequence of the mergers and other developments among airlines and hotels that have created new options for travelers in their own right.
On top of all this, technology continues to keep us more connected than ever. Think of how common video conferencing is now. “OOO” means something very different than it used to.
When you launched, what did you think you knew about business travel that you now realize is wrong?
Enterprise corporate travel is a highly complex industry, much of which is misunderstood by travelers.
Concepts such as how corporate discounts are negotiated, the actual value they drive for an organization, why they should matter to the end traveler, and duty of care challenges are topics highly relevant to travel managers and their organizations but largely opaque to frequent travelers.
This creates a friction point between travelers and organizations, which I believe to be the leading cause of "non-compliant" travel.
Of course, restricted purchasing options and poor user experience plays a role as well, but there's a lot that gets lost in translation between travelers and travel managers that creates a significant amount of avoidable friction.
Business travel continues to attract significant funding from venture capitalists, do you expect this to continue?
Global spend on business travel is expected to reach $1.7 trillion in the next couple of years, and there’s a lot of opportunity for growth in the technology solutions that support the industry.
Most of the technology that’s currently used is restricted to large, bundled-service tools. We’re only seeing the tip of the iceberg in terms of unbundled services that will drive industry innovation. Of course, that growth will be driven in large part by venture capital.
In addition, the changing culture around today’s workplace (and that includes business travel) will make new solutions necessary. Employees expect flexibility and choice, and the technology their employers use will need to facilitate that. All told, there is reason to believe that investment will continue.
Is there room for all these startups in the space?
Business travel is a complicated industry that’s made up of many different services. There are services centered around flight and hotel booking, rebooking, expense management, and cost control, just to name a few.
There is massive room for change in all of these areas thanks to improved user experience and data analysis capabilities. In addition, startups have the ability to specialize in one area and provide a far higher quality service than a large company that covers multiple pieces of the travel puzzle.
Of course, there will be some startups competing with one another, and certain spaces within business travel will be more crowded than others. However, I see that as a good thing because it will push everyone to stay innovative and high-performing.
Rocketrip raised $15 million from Google Ventures just over a year ago with plans to expand sales and partner with travel management companies as well as more Fortune 1000 companies - how has this worked out?
As far as our partnerships go, we’re at an exciting point. We have relationships with a number of travel management companies, and those relationships are paying off for all parties.
Even though they’re not a travel management company, one of our most exciting partnerships at the moment is with Sabre and more specifically, the GetThere Online Booking Tool.
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We recently announced a full integration of our two platforms. Very soon, our shared customers will have out-of-the-box access to Rocketrip when they use GetThere on any device.
This is the next step in becoming a seamless part of the business travel technology stack.
We’ve also recently acquired some exciting new customers. However, more important than just acquiring customers is providing them with value. We do that by driving behavioral change and savings, and we have aggressive goals to ensure we continue providing the highest value possible.
What are the biggest hurdles that Rocketrip currently faces?
There are still some conservative mindsets within organizations that don’t see eye to eye with us on rewarding employees for outstanding behavior. This is fundamental to the value we’re providing.
Enterprise corporate travel is a highly complex industry, much of which is misunderstood by travelers.
Dan Ruch - Rocketrip
Rocketrip rewards employees for going above and beyond to save money. We help them to do more than simply what’s expected of them.
What we see all too often are companies that think their employees should be staying at lower star class hotels or flying coach instead of business class, even though their policies allow the more expensive options.
Some companies would rather achieve savings by tightening their travel policies and risk damaging their culture.
Because of the changing workplace dynamic, I do see the benefits of rewarding extraordinary behavior achieving widespread recognition. But for now, in some cases we’re still evangelizing that perspective. The good news is, we have years of success with many customers to help us sell the vision.
Now that you have six years under your belt, would you say that business travel remains difficult to break into from a startup point of view or is the traditional business more open to innovation?
Any time you ask people within a large, enterprise business to change how they operate, you face an uphill battle. Travel is no different.
Breaking into the business travel industry as a startup means asking companies to change how they think about travel and expense policies, and sometimes it even means asking them to change existing policies. Working within the boundaries of the legacy technology architecture that corporate travel sits on has its challenges as well.
However, the fact remains that there are a number of pain points in business travel, for both employers and employees, that need to be addressed sooner or later. It will likely be small, unbundled services that are at the forefront of solving those problems.
Everyone talks about accessing and harnessing data in business travel, are you seeing examples of it being used to really improve the traveler experience?
I see an opportunity for companies to build more common-sense policies with data. We now have the means to examine traveler preferences and behavior in-depth.
If travelers are consistently spending above policy limits in one particular city, that’s a sign that company policy does not work in that city. When organizations use that information to modify their policies, they not only assume more control over traveler spending but improve the traveler’s experiences as well.
We’re in the early stages of putting this idea into practice. Our data about traveler spending is helping us identify more opportunities to influence their behavior. This will ultimately lead to savings for companies and to higher rewards for travelers.
Do you have high hopes for machine learning in business travel? Is there an emerging technology that you think will have a massive impact on business travel?
With both travel booking and expense management largely online, companies capture tons of data on employee travel behavior. Examining that behavior presents opportunities to overhaul policy, reduce costs, and improve choice for employees.
Machine learning is the ideal toolset to facilitate that investigation because at its core, it focuses on finding patterns and making predictions.
At Rocketrip, we are constantly improving our Price to Beat so that companies and travelers have fair and accurate benchmark for how employees would have traveled had there been no incentive to save.
We’re also currently doing some really interesting work on recommendations and personalization for travelers.
How might the corporate travel technology and distribution landscape look in five years time?
NDC (New Distribution Capability) and new front end user experiences are certainly going to create a more fluid, interactive experience for business travelers that will get the booking process to feel a little more like a consumer experience, but I don't believe this will have too radical an impact on the industry.
I do think there's a very interesting opportunity to create a more efficient transaction workflow, getting vendors closer to their corporate customers, which would require an exchange marketplace as a foundation.
Whether one of the incumbent GDSs can serve this purpose or it happens by disruption remains to be seen, but I believe there are too many intermediaries in the equation right now, which creates significant inefficiencies.
Do you subscribe to the bleisure trend or is it a made up thing?
It’s an awkward phrase, but it’s a real thing. Millennials, who will account for over half of all business travel spending by 2020, are also more than twice as likely to extend a business trip for leisure. And the trend is hardly isolated to this generation.
Bleisure goes hand in hand with the move toward consumerization and business travel looking more like consumer travel. Business travelers aren’t just looking for comfort and convenience anymore. If they can experience a new city or see friends and family, that’s exciting.
What technology has played a significant role in a recent business trip and how?
Mobile technology isn’t new or exciting by any means, but it plays a big role in how we all travel now.
That and video conferencing. We’re able to stay connected to HQ in a way that was unthinkable prior to the last decade or two.
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