We are on the cusp of a new era in business travel. Advances in technology are driving us forward at breakneck speed. The industry is rife with new - but lately struggling - startups: online booking systems, mobile apps, voice bots, all battling for pieces of the market.
At the same time, legacy travel management companies (TMCs) have restructured while pivoting to tech-driven strategies in an attempt to remain competitive.
What’s going on? Why are startups struggling to gain traction? Why are experienced players reinventing themselves in the face of losing market share?
The answer, in a word, is innovation. Business travel has moved through three phases of evolution, and technology has powered a dominant flywheel of innovation - the driving force in each phase.
The three phases of evolution...
As a flywheel - originally a driving mechanism for simple tools - turns, it builds up momentum and stores energy as inertia. Today, it’s playing a new role in describing our digital world. It shows the power of innovation - enduring through time and pushing through historic trends, static players and resistance to change.
Just when travel management seemed mature, conducted over the telephone and consolidated through TMC-based call centers, real innovation took hold. This “legacy” phase had one point of contact and one simple “stack” of tools to manage it.
Subscribe to our newsletter below
But innovation doesn’t rest. The internet burst out of universities and research labs, and e-commerce was born. Suddenly, the telephone became one of many channels, and the simple “stack” became a complicated mess of mismatched tools and processes. In an effort to keep up, TMCs took a hybrid approach, keeping legacy phone-based systems but forcing “online technology” into their solutions.
The second “hybrid” phase is characterized by many disparate tools, frequent struggles to keep them in synch and painful gaps along the way. Today, many TMCs are still in this hybrid phase, acutely aware they need to simplify, but lacking the capital or skills to do so.
But innovation doesn’t rest. The hybrid phase of the industry soon gave way to the relentless flywheel of innovation.
Recently, legacy and hybrid TMCs have mustered the will to invest, striving to integrate their offerings with renewed focus. In parallel, new startups have built intriguing point solutions to solve for gaps, large and small (recently described as “the niche within the niche.”)
Some players embarked to rebuild their offerings, aiming to become what we call "digital TMCs" with technology-enabled, multichannel offerings. They are hoping to manage the resulting explosion in complexity through more integrated technology components.
This third “digital” phase is upon us. But the complexity is daunting. TMCs have big, long roadmaps with the yet-unfulfilled promises to match. And startups, hoping to carve their niche in the market or play a role in hybrid transformations, are finding that solving 20% of the problem in one or two markets just isn’t enough.
...and the fourth
But even now, innovation doesn’t rest. The current digital TMC phase is aging, giving way to a new, fourth phase.
A new flywheel is emerging, built around data. It’s giving rise to the “TMC as a platform” - the fourth phase of business travel.
With a platform, you can literally have hundreds of thousands of versions of the platform running, and the best ideas from those experiments flow across the business naturally.
Rob Greyber
The TMC as a platform generates massive amounts of data about business travel every day. Data enables new efficiencies, but it also inverts the complexity of legacy and hybrid systems. It uses huge scale, native integration and global reach as a source of learning rather than a burden of complexity.
With a platform, you can literally have hundreds of thousands of versions of the platform running, and the best ideas from those experiments flow across the business naturally.
Innovation doesn’t rest. And just as the mechanical flywheel enabled an industrial and economic revolution, business travel is picking up momentum as it moves into a new era.
The power of the platform will define the next phase in business travel. For those who can build, operate and globally scale these platforms, it will be an era of unprecedented innovation.
For those who can’t - or those who are trying to manage through a hybrid or digital infrastructure - it will be a tough road as the flywheel spins on.