Before retiring from his role as CEO of the GTMC, Adrian Parkes, who has held leadership positions in the travel space including at bmi (British Midland Airways), Etihad, and TMC Portman, spoke to us to discuss the big technology trends developing in travel and how they relate particularly to TMCs and their corporate clients.
Just as travel content is increasingly being distributed through digital and mobile platforms in the B2C sector, corporate travel management increasingly relies on these tools, Parkes says.
“All travel management companies—certainly all the major ones in the UK—offer either an online booking tool solution that ties to software that they built themselves, or they’re using a third party product. That third party product could be part of the GDS’s technology suite, or it might be a separate third-party online booking tool as a white-labeled type product,” he says. “They’ve got the same flow, the same content on the consultant desk that we’ve got at a travel bookers, or at the traveler’s desk, in terms of booking. They also offer a mobile solution, so you have all three channels that a traveller, or a corporate client is likely to use.”
Parkes believes that the user experience for these tools can still evolve further, to deliver greater traveler benefits and boost bookings, but personalization is more difficult for TMC clients.
“The experience..is simpler, particularly for the next generation of traveler coming in at the moment,” he says. “The future managers and future leaders consume the content in a different way than their counterparts do now. That’s why the technology is moving forward..I think the role of the online booking tool has developed significantly over the past few years. It’s reaching maturity. The possibility of transferring business over the online booking tool has got to a level in the business travel space where people are happy and satisfied. But the experience could be simpler and it could be bringing in more business than what we’ve experienced in the B2B consumer environment.”
However, the differences in corporate travel policies, from one client to another, can affect the scalability of certain technology solutions for individual TMCs.
“What we’ve all got to realize, and take into account, is that every single company that the TMC looks after will have its own unique policy. There will always be a difference in policy from one company to another company, which will affect the scaleability of technology and the breadth of personalization…and company policy management will continue [to be a priority]…The next generation of travelers may consume policy in a very different way, but company policy will remain very important..to ensure that costs don’t escalate.”
An individual traveler’s preferences for sharing economy travel services may not always fit the corporate travel policy.
While there has been some change to embrace alternative services like stays at Airbnb, or booking transport through Uber or Lyft it is not the default in corporate travel. There are similar flexible products available in the corporate travel management space, such as managed residences, which better address corporate concerns, Parkes says.
“There are other products that are similar nature that a TMC company and its corporate clients might choose to use, based on how they handle issues like health and safety,” Parkes says. “There are companies that require 24-hour manned reception desks, for example. Each company will make its own choices. I think the issue that you do have in terms of travel content—giving people the most content possible—is whether that’s the best way of going forward. Once the TMCs agree on what the best policy and the best program with the corporate client, they have to deliver to that policy on the corporate program. If the corporate client wants to include Airbnb, or wants to include Uber, the TMC is more than capable of doing that with the products and the technology tools that they have today. But they have to start with what corporate requirements are, what the type of travel is, whether it’s largely domestic or international, what their well-being and duty of care policies are, what their health and safety policies are, and of course what their pricing policies are. It still comes down to the TMC’s content offer, but the client decides whether they want to take that content, based on their policies.”
Some of the concerns that corporate travel clients have with sharing economy product have to do with the auditing of products and services offered by sharing economy suppliers. There are needs, for example, to ensure security for single travelers or female travelers. Corporate clients have duty of care policies to meet, as well as health and safety issues to address. There is also the question of approved payment methods; whether the corporate travel client is comfortable with employees using their corporate travel cards to clear payments on ride sharing apps, for example.
Speaking of payment, Parkes believes the biggest hurdle ahead for TMCs will be the upcoming changes to travel payment regulations in Europe. The new regulations affecting online payments PSD2 RTS (Regulatory Technical Standards) for strong authentication and secure and common communications, which come into effect in September of this year. An opinion published by the European Banking Authority on 21 June suggests that there will be very little if any possibility of an extension for compliance when the 14 September date comes around; particularly as, in their opinion, online vendors have had sufficient time to adapt their systems since the PSD2 RTS was first announced in 2013 and published in 2015.
“The issue that the TMC has to be able manage [PSD2 RTS] and that their supply chain has to be able to manage it as well,” Parkes says. One promising development, which may help with compliance and generally simplify payments processing is the growth of virtual cards over the last few years, he tells us.
“I think what you will see is growth in tokenization of payment through phones,” Parkes adds. “Your Apple Wallet and the likes…will grow from the B2C to the B2B environment because it makes payments a simpler process for everybody involved.”
In terms of new airline distribution capabilities, Parkes believes the next big hurdle for TMCs will be for IATA to move forward with the booking services elements of NDC. IATA has made travel services an essential component of the NDC corporate booking tools, but while airlines are making advances in adopting the standards for distribution and sales, Parkes believes that there is still progress to be made in service.
IATA has introduced changes to the NDC certification program that will support higher transaction volumes from industry growth with additional service-related messaging, such as flight changes and cancellations, using the NDC standard through Level 4 certification.
“We’re yet to see the whole potential value, the benefit of NDC, but there’s quite a huge disruption possible,” Parkes says.