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.
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.