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.