Heard Here First

They sound familiar because they’ve come to be widely accepted by the travel and technology industries, or they have been proven right overtime.  You heard them here first in any case.

Here are just a few of the predictions, forecasts, and strategic assessments I’ve made over the years in print that gave you early warning of what was going to happen–if you were reading these pages.  Often you would have had five or ten years to plan and make adjustments to your business or technology position.

  • Proprietary operating systems were not the way and would be overtaken by UNIX (1984).
  • Projects for so-called “neutral” reservations systems were not going anywhere then (1984) or hence (1998).
  • The cost of replicating existing CRS functionality vastly exceeded the trivial amounts neutral system backers projected (1994).
  • ETDN initiatives were dead on arrival because customers didn’t want them (1991)
  • Ticketless travel was the future of the industry (1985).
  • Travel Management Companies (TMCs) that built their service profiles around ticket issuance could not survive and desperately needed reengineering (1991).
  • The long-term position of CRS technology in travel distribution should be seriously questioned (1989).
  • Travel technology offerings do nothing to boost productivity–a critical strategic deficiency for TMCs and their customers (1991).
  • Airline “fare simplification” schemes are short-term and will fail within months (1993).
  • The strategic technologies of major TMCs are ill-conceived and unsustainable (1993).
  • PCs do not boost individual worker productivity (1993).
  • Travel distribution will evolve, resulting in the displacement and disintermediation of TMCs unless they take immediate steps to redesign their businesses (1994).
  • The Internet is not the “great equalizer” of agency competitiveness; most agents will be big-time losers on The Internet; only a handful of major, well-funded entities will survive (1995).
  • No electronic travel distributor understands their customer or knows the first thing about what those customers will really buy (1998).
  • Internet travel companies need real customers and real earnings before they can be considered real businesses (1999)
  • The Y2K catastrophes predicted for travel and society in general won’t happen (1998).
  • On-line travel auctions won’t succeed (1999).
  • Without something to sell, techno-gadgets only cost you money (2000).
  • Well-managed travel companies (agents and vendors) would recover quickly from September 11, 2001 (2001).
  • IATA’s New Distribution Capability is a poorly conceived program that goes far beyond data standards–and it probably won’t work (2013).
  • Open Booking, Travel Management 2.0, and similar ideas are unproven, untested, and unreliable theories that pose serious business and operational risks to travel buyers that are not offset by speculative benefits (2013).
  • Travel distribution “ecosystems” have been tried before and don’t benefit the industry (2014).

 

The Open Booking Question–What We Know and What We Wish We Knew

The world of Open Booking is a confusing one. No one seems to understand how it’s supposed to work in sufficient detail. Beyond some broad statements about how much travelers want it and how you can apply the concept to suit your situation, those devilish details are left to look after themselves.

Its business case has never been fully or adequately developed. No one has ever successfully demonstrated, using adequately supported data and research, that Open Booking (to the degree it is described and understood) even works, financially or operationally.

Some of our colleagues also claim too much for Open Booking. There is a tendency to believe that Open Booking is inevitable because there are serious flaws and failings with how travel management is conducted. Open Booking is not the sole alternative–there are equally, if not more valid management techniques that can be employed.

It’s one choice among many, and based upon the answers that are available it isn’t a very good choice. It would be great if more solid information were forthcoming, but even asking questions carries its own challenges.

Here’s an experiment for you to consider.

While the setting is intended to be light-hearted, the issues discussed are quite real and the responses are all based upon incidents in my own experience with the Open Booking Question.

Pick any of the national, regional, or larger local travel management companies that specializes in business travel, or an on line travel agency with the same specialty. Call someone from the sales department, introduce yourself and your company, and tell them that you’d like a few questions answered.

Begin by asking for a detailed explanation of how the would propose to handle your business. Respond to their questions directly and intelligently, and listen to their explanation. You may not like what you hear, but you’ll be told in sometimes painful detail how their operation works and where you fit in.

Ask all the difficult questions you want that reflect your real concerns, possible issues and contingencies you may have heard about, and criticisms of their process that you may have heard from competitors or read in the trade press. Typically, answers will be immediately forthcoming or a quick follow-up call will offer clarification.

Then, pointedly ask how they will “prove” to you that their service is any good, how it is cost-effective compared to their competitors, what evidence they will provide as to their ongoing purchasing efficiency, and how they can project and measure your savings. Remember to ask where their data come from and why these are accurate.

Without much hesitation, you’ll probably be told about benchmarking, reporting tools, econometric models, and various gadgets and systems that the person on the phone is convinced are just what you want.

Some of the answers you will receive will be interesting, others quite inventive, and still others less so–but the point is that you will get answers. These are legitimate inquiries and the business development area within travel distribution is happy (even anxious) to address them.

Try the same process on someone who is anxious to talk about the inevitability of Open Booking (or Managed Travel 2.0) and the benefits that idea provides.

You’ll be challenged to get a comprehensive description of how Open Booking works, largely because no one has adequately defined the operational details and how they apply in the real world. People have their own ideas but there is no shared view–and the experts create explanations as they need them.

Even though Open Booking has been a popular topic for some time, difficulties continue to pop-up that no one has thought through (see here for example). The list of questions that should have been considered and have not is long and tedious.

You’re likely to learn that Open Booking is a concept that you must apply in ways that suit your own situation. Patiently remind the person that, if this is true, Open Booking has descended to the level of how you’ve been handling your travel for the last 40 years, and suggest that the proverb “there is nothing new under the sun” may also be true.

Remind them that the apostles of the Open Booking doctrine want the industry to adopt it as a premise for doing business, as an overriding concept that reshapes how managed travel is understood in the current century, and as an inevitability brought about as a result of how traveler attitudes and expectations have been reshaped in the Internet age.

In such a toplofty setting, some comprehensive definition, description, and attention to detail is not too much to ask.

Next, take a deep breath and ask your contact to prove to you that the operational system they have described to you (to the degree this has happened) can and will work, that they have considered all relevant details, and that sustainable savings (offset by any costs and business risks that you might incur) have resulted in other settings and will result for you.

Remember to insist on clarity as to where the data come from, how reports were developed, and why they are accurate. Don’t be content with unsourced figures pulled at random or comments from published materials with an equal lack of transparency.

Your spokesperson will likely be affronted at your having the temerity to ask such questions. You may be informed that “proof” is unreasonable and impolite, and that countless satisfied travelers are enjoying excessive (but unspecified) savings and satisfaction through Open Booking, so it is up to you to join their happy throng.

Such requests for “proof” will likely be dismissed by comments such as “that’s what the marketplace is doing.”

As you politely close the conversation, a gentle reminder that it is the “marketplace” that just asked the question may be in order. When the call is over, you might also reflect upon how long a TMC that gave a similar answer would remain in business.

What Have We Learned?

I’m not sure why many observers are prepared to give Open Booking “a pass” in settings where other parts of the travel distribution system are held to a much higher standard.

This may be because Open Booking sounds technological or scientific, that they are beguiled by its promises that amount to the benefits of managed travel without much of the work, or that it’s simply (at least for many) an attractive and new idea.

Open Booking is none of these things. It is essentially the same complaints and objections to managed travel that have been wandering about for decades, now in a new suit of technological clothes, with the promises that gadgets, web sites, and reporting methods have succeeded in changing human nature.

Travel buyers should rightly expect better answers to how Open Booking works, how real-world problems can be affordably addressed, and the financial benefits it delivers (in all instances using better data and analysis than has been forthcoming thus far).

Advocates of Open Booking should consider it their obligation to provide nothing less.

Open Booking, lacking better evidence, simply doesn’t make sense. Because many people believe Open Booking to be a good idea, I’d have thought that an adequate, specific, detailed business case would not only be easy to produce but would have been forthcoming long ago.

I’m anxious to see it.

More Bad News For Open Booking

Consistent with my prior comments on the management hazards of Open Booking, travel attorney Mark Pestronk remarks that:

“Open booking presents a serious legal problem that no one has yet touched on: By allowing employees to use the public websites and mobile apps offered by suppliers and online travel agencies, travelers and their employers waive all of the contractual and other legal rights that they normally have under U.S. law.”

Read his article at:

Corporate travelers surrender rights with ‘open booking’ – Travel Weekly

The Business Reality of Open Booking

This analysis appeared October 9, 2013 in Cornerstone Information System’s “Insight & Opinion” section.


Open Booking, noun: A travel industry term concocted to describe the process whereby problems that don’t exist are solved using techniques that don’t work, so as to produce savings that can’t be defined.

I’m not specifically against Open Travel or Open Booking, but if it’s such a good idea a straightforward case should be made in favor of it, using real data and sound business arguments. The fact that this doesn’t happen is very telling.

Open Booking rests upon a theoretical foundation that is distant from the real world and requires us to suspend belief in how travel distribution works if we are to adopt it. A few business concerns and examples may bring Open Booking’s contradictions into focus.

Travel Management Companies

The “M” in TMC represents Management. TMCs provide value because they appropriately manage the travel process on behalf of their customers; when they fail that value disappears.

Open Booking’s proponents speak of the evolving role for TMCs looking like a subscription-based service where agents provide support regardless of where and how reservations are made. How this might be an improvement over a TMC’s involvement in the current online booking process is left somewhat mysterious.

In the real world, TMC experience and expertise can shorten the path to correct decisions and avoid the wreckage from bad ones. While it’s not impossible to clean-up problems after the fact, it is typically more difficult and expensive–as anyone with experience at a subscription-based 24-hour travel support service could tell you.

To suggest that TMCs should support corporate travel in this mode by default is to say that their services have little or no value–which is clearly not the case.

Whatever its flaws, travel management operates the way it does because it works. Desiring to correct those flaws is not a testimonial for Open Booking.

Duty of Care

Corporate travel managers should have concerns beyond the basic cost of travel services, one being duty of care. Broadly speaking, in the real world this is a generally accepted principle which says that individuals must take reasonable care when performing actions that could foreseeably cause harm.

It applies in business as in other areas of life. Concerning travel, the possible implications are obvious, as there are numerous services informed and prudent people should not use, places they should not go, and things they should not do.

Allowing or even requiring travelers to bypass a source of expertise that is well-known, established, and otherwise available to them might not cause a duty of care problem, but the potential is real and shouldn’t be dismissed in the quest for imaginary travel cost savings.

Managed or Not?

Open Booking supporters often affirm that it is not the same as unmanaged travel–a distinction without a difference. When you stop managing in the real world you allow events under your control to be handled in whatever ways the people involved feel is appropriate.

That is the essence of Open Booking. The fact that you might be able to collect data, count the cost of the result, and disagree with choices made doesn’t compensate for the lack of control.

Since 2002 public companies in the United States have operated under the Sarbanes-Oxley Act (SOX), which is a complex set of financial regulations that are intended to correct the financial and management errors that caused the financial scandals of that period. Among many other things, it requires the management of public companies to take specific responsibility for financial reports and for their own actions.

It also imposes requirements as to internal financial controls, conflicts of interest, and the level of understanding management and auditors must have over internal processes and procedures.

Travel is a significant part of most public company finances–often among the largest expenditures. While the specific implications of SOX vary substantially by company, why would it be in the interest of any manager facing such obligations to forsake management-based controls over expenditures that might be counted in the millions in exchange for unproven lower costs and a somewhat lesser level of employee complaints?

SOX is very difficult to reconcile with Open Booking–counting what has been spent or even establishing budgets for travel is not sufficient, as SOX requires control and meaningful representations that proper procedures have been followed.

The Business Reality

Open Booking as it is currently represented is a bad idea for travel agents who have no realistic role in its operation. It’s equally bad for corporate travel managers who are asked to abandon the tools that are central to doing their jobs.

 

The Productivity Pit

This analysis appeared September 17, 2013 in Cornerstone Information System’s “Insight & Opinion” section.


Innovation in the travel industry is much more difficult than you may imagine. Not only is there a famine of genuinely innovative ideas and programs but gaining acceptance for them can be close to impossible.

Nowhere is that more clearly in evidence than through industry productivity. There are some variances depending upon the activities being measured, but in general industry productivity hasn’t moved significantly in many years–except perhaps in the wrong direction.

It’s tempting to think that today’s online-enabled world must represent productivity at its best. For individuals and businesses, everyone has to have a smart phone, a tablet, and usually also a PC–all online and just waiting to make them more productive.

Personal computing, in whatever form, has caused us to confuse “busy work” with meaningful work. Finding the latest and greatest applications for tablets and phones, or innovative ways to make things happen on hand-held devices that were never designed for them are examples of nonproductive tasks we tolerate because our gear has to work the way everyone says it should.

We also simply must be “online and mobile” in order to get anything done. Highly paid people waste their own time with this high-tech tinkering instead of doing something useful.

The industry is so suffocated by information that people have started accepting irrational actions as normal.  According to some reports, it’s “usual” for travelers to consult 20 or more different web sites prior to making a reservation.

When you recognize that many of those sites simply take information from other sites and repackage it, one can only wonder what people are thinking.

I believe productivity in most areas of travel distribution hasn’t shown a real increase for at least 10 years, and that developments on the commercial horizon that promise change are indeed rare.

New Inventions, and Other Fallacies

“The fact that an opinion has been widely held is no evidence whatever that it is not utterly absurd; indeed in view of the silliness of the majority of mankind, a widespread belief is more likely to be foolish than sensible.”

 

– Bertrand Russell, British author, mathematician, & philosopher (1872-1970)

I was head of technology for one of the country’s largest travel management companies for years. More than once I remarked to my colleagues, who were worried about competitors copying our technology, that most everyone will ignore anything truly useful that we might develop.

There are serious problems with expecting technology to transform industry productivity again, as has happened twice in the history of travel automation. Almost everyone is so absorbed by the mythology of surrounding popular devices and the online world that few developers really know what productivity enhancements to build.

The answers are not obvious, little help from the user community has been forthcoming, development is expensive and the risk of failure is great.

Equally as important is the unrealistic pricing and user expectations that are pervasive in travel technology.  Where developers cannot reasonably expect real financial returns and sensible ongoing support commitments, it is difficult to find the basis for worthwhile new projects.

There is no alternative, however to diligently seeking productivity improvement.  Even very modest increases can yield enormous financial benefit. Developing automation solutions that are effective, sustainable, and that can truly be used to increase basic productivity without requiring a higher overall skill level should be a standard by which travel technology is measured.

Present travel technology gadgets usually focus upon correcting the deficiencies of other systems.  Reengineering, used in the sense of defining new and better methods rather than simply staff reductions, has largely bypassed travel distribution.

The industry usually looks at illusionary productivity standards and hence achieves illusionary results–what I refer to as digging and then falling into a productivity pit.

Productivity Through Compromise

If you diminish overall workloads you create the impression of being more productive.  Such tactics, as an example, are tried by those who eliminate quality control steps for certain segments of their business.

Productivity Through Redirection

The travel industry has been training itself to believe that the most efficient way to make reservations is for managers and executives to use what are often inferior tools to do the job themselves–and become the company’s highest-paid, bad travel agents. People and systems do not become more productive simply because direct service charges are lowered and work distributed over a larger and more expensive labor pool.

Productivity through Weird Science

So-called artificial intelligence, knowledge-based systems, or automated booking systems occasionally pop-up as productivity solutions.

Aside from the fact that the technology most developers employ is of questionable worth, such projects can only be classed with traditional tools that try to correct older system deficiencies–none as yet has tried to reengineer the basic elements of travel agency inefficiency.

This reengineering looks like:

  1. Tools that assist in getting work right the first time or that transfer meaningful functions wholly to automated systems.
  2. Delivering true customer service (defined as the ability to organize product presentation so as to give people what they really want to buy).
  3. Organizing decision support so that knowledge relating to customer service is equally and readily accessible to experienced and inexperienced operators and can empower correct business choices.

Finding and implementing productivity solutions isn’t easy, but they may mean the difference between survival and failure–where competition promises even tighter margins and increased costs.