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29 Jan 2014
Blog

The problem with open booking …

Darrin Grafton


Integrating low costs suppliers into travel technology software will make policy compliance possible

As expected, 2013 was a fascinating year for travel technology and I’m pleased to say that many of the predictions that I made for the year have already come to pass.

At a high-level, 2013 saw the cloud really came of age and we saw a lot of consolidation in the market, which is a positive sign. It was great to see Microsoft’s Azure cloud hosting platform emerge as a leader in the space and the company demonstrate the technical leadership that made it so dominant in the 1990s.

From a travel technology perspective I believe 2013 will be remembered as ‘the year of the Open Booking’, and for all the wrong reasons.

It’s a given that corporations were always going to take advantage of the cheap fares and cheap room rates provided by direct, low-cost providers, regardless of what their chosen corporate travel-booking provider said or did. But rather than doing the right thing and pulling ‘direct-connect’ supplier content into their booking systems, some in the industry simply moved the goal posts and declared Open Booking to be the way of the future. But in a world of Open Booking, corporations are forced to make a choice: benefit from low prices by booking direct on supplier web sites, OR pay through the nose and maintain control through policy compliance. I passionately believe that’s a choice that corporations simply should not have to make.

Credit where credit is due, the expense management vendors, who have largely led the Open Booking charge, have sold the story extremely well. They have argued that the only practical way of managing the low cost direct supplier challenge is to use their expense management tools to ‘mop up’ all the direct transactions at the end of the process. This approach largely negates the value of working with a corporate online booking tool that applies policy, spend control and audit trail at the beginning where it’s most needed. I believe that by flirting with Open Booking the travel booking industry risks taking a significant step backwards, not forwards.

The right answer, from Serko’s perspective at least, is to do the hard yards and bring the low cost inventory into the booking tool and enable corporations to book low-cost product AND still apply their full set of travel management policies. Open Booking reinforces my belief that large companies that offer expense management and travel booking services are inherently conflicted and that customers will always benefit by working with organizations dedicated to one or the other.

In terms of crystal ball gazing, I’m sure 2014 will be another interesting year. The pace of innovation continues to speed up and I think we’ll see a number of key trends emerge.

My two key picks for 2014 are:

End-user empowerment

We’re already seeing the booking burden move from travel administrators to the travellers themselves and I believe that this trend will accelerate through 2014. New tools are emerging, particularly in the mobile space that will empower the ‘road warrior’ to do more, without the corporation losing control.

The consumerization of IT, mobile and corporate ‘BYOD’ strategies are changing the way travellers interact with content and the industry needs to innovate to take advantage of what’s now a well established trend. I think we’ll see some very cool new apps that help users better manage their trips. At Serko we’ve got some interesting ideas that we’re looking forward to sharing during 2014

Predictive modeling

There’s been a lot of discussion about the role that Big Data will play in the travel industry. The natural place where it can add value is in helping to predict traveller-booking behavior in advance. At least in theory, predictive analysis will enable organizations to drive down travel budgets by reserving seats speculatively very early in the process and make it easier and quicker for travellers to make bookings themselves. At Serko we’re developing and testing some ideas and some algorithms that we think will help customers make their travel budgets go further and again, we look forward to sharing the results of our trials with travelBulletin readers in due course.

Serko Online is the leading online travel booking in Australasia. The company is part of the Mundi Global Alliance, which brings together leading online travel booking companies in the US and Europe to offers global organizations a best-in-class online travel booking solution. Learn more at www.mundiglobalalliance.com.


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