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.

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.

 

Perspectives on Data Ownership: 2013

This analysis appeared March 15, 2013 in Cornerstone Information System’s “Insight & Opinion” section.


Recent popular discussions of “big data” (a surprisingly ill-defined term) are curiously silent on where these data may come from and who should decide where and how they are used. Perhaps this is because the current social media wave encourages individuals and businesses to surrender a degree of privacy (and hence control over data) in return for the promised benefits of whatever service is on offer.

While we may believe that travel data ownership questions were settled long ago, control and ownership questions are more complex than many assume and require careful review regardless of how open or restrictive data access should be.

Everyone’s In Charge

Most travel businesses you speak with will assert either that passenger travel data belong to them or that they have a right to use and distribute them essentially as they see fit.

Corporate travel managers usually maintain that, since they pay the bills, they both own and control the data. Airlines and other vendors often assume the right to use and distribute data about the use of their services, and travel management companies believe they have a degree of ownership because much of the most valuable travel data comes from their systems and exists because they expended energy to create it on behalf of “their customers.”

This travel data ownership conflict is a familiar story, but there are other less evident or considered levels:

A number of processing intermediaries including payment systems, ticket processors, GDS companies, and on-line booking tools assert a right to distribute travel data and reports for their financial benefit, apart from any direct or indirect benefit travel buyers receive. Typically this is done with individual travelers remaining anonymous, but the degree to which “anonymous” travel detail is widely available, down to specific itineraries and dates, would surprise most travel managers.

Many sources also make data available to third-party aggregators, who also operate for their own financial benefit under the assumed anonymity of individual travelers. Such companies produce an array of usage and comparative models, predictions, and similar data projects which find uses far removed from travel management.

Assumed Anonymity

I use this term to describe the broad assumption that, if my name isn’t present, whatever follows doesn’t matter. Anonymity can unravel quickly. It’s hard to argue that the kind of industry-wide data aggregations used by the DOT and others to predict economic trends are threatening, but under the care of a skilled analyst, extensive company-specific and individual travel patterns could be deduced, especially by combining multiple sources.

Interesting Questions

The extent and depth of travel data distribution and usage should at least cause travel managers some reflection, even if they decide they need not be concerned.
Here are a few specific thoughts:

  1.  complete chain of custody affecting anyone’s travel data is unknown–sometimes adequate, elsewhere non-existent. Many companies with data responsibilities have no real data security program in place that runs deeper that simply saying the right things.
  2. How is it that so many travel industry business intermediaries are selling data produced by customer activities for their own benefit? Aggregate industry analytical reports are one thing–distributing detailed raw data to third parties is another. Where did that permission come from?
  3. Have corporate travel managers looked at the type of data being distributed about their travelers in detail and rationalized it with their own company privacy and security practices?
  4. Are travel management companies comfortable with the extent of peer comparison by vendors and subsequent data aggregation that has become commonplace in the industry?

Whose Customer?

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


Talking about “the travel industry” often invites criticism that it’s impossible to generalize–travel companies of any description are not identical and can’t be expected to behave as one. This ignores the experience of even casual observers, who see business decisions, successes, and failures widely replicated and frequently repeated throughout the travel industry over time.

There is a continuity within companies that operate in the same field, face similar market challenges, and who must compete with each other that causes them to align similar practices and strategies to an often surprising degree. What is referred to as “institutional memory, (the phenomenon where groups of people working together circulate and perpetuate the same ways of thinking over time), makes such alignments difficult to change.

One such area is ownership and management of the customer relationship. Travel vendors largely think they should be interacting with their customers directly and with as few intermediaries as practical.

This belief predates the coming of The Internet and electronic commerce–it’s varied over decades but never disappeared. In many ways it’s a stronger business force than on-line selling.

The fact that travel vendors generally don’t do an especially good job of interacting with their customers, or of listening to them, doesn’t cancel the desire to remove intermediaries.

If it Were Only True

If travel suppliers deal directly with customers, costs and inefficiencies should decline. More important, it should be possible to protect and preserve loyal customers.

It almost never works that way.

One major impediment is that, to provide effective customer service, you need to listen to your customers and understand what they say. Translating these simple requirements into appropriate actions proves particularly difficult for the travel industry.

With exceedingly rare exceptions, nobody in the travel industry delivers customer service and nobody can–where “customer service” is defined as delivering what the customer truly wants to buy when it is needed.

Airlines are a reasonable example. Do you know anyone who thinks the excessive and capricious baggage fees most carriers are anxious to charge are a good idea? I’ve asked that question before groups of hundreds; apart from a few people with a specific viewpoint to represent, I’ve yet to get an affirmative response. I’ve never even heard of such a response.

The “ATM machine in the sky” approach to airline pricing is a major profit contributor, but it wasn’t designed to please the consumer.

If travel purchasers received everything they wanted by removing intermediaries, they’ve had the past 18 years (since the availability of Internet-based tools) to eliminate travel management companies, on-line travel sellers, and corporate travel departments. There remain necessary services that suppliers can’t or won’t provide.

Listen Here!

Travel management companies usually fail the “customer service” test as well. Even the most sophisticated are good at order-taking, exceptional at listening to customers (much better than vendors), tepid at data analysis and product innovation that addresses real customer needs, and non-existent at informed communication–when was the last time you received a newsletter or e-mail bulletin from a TMC that wasn’t an immediate, no-consequence throw-away?

Customer relationships are the product of continued, frequently arduous investment. They are earned, not simply claimed. Intermediaries such as TMCs and OTAs are valuable travel management participants because they meet real needs, despite their own failings.

Efforts to change that without adding equivalent value are destined to the growing list of management theories that simply don’t apply to this industry.