This analysis appeared August 12, 2013 in Cornerstone Information System’s “Insight & Opinion” section.
You may have heard of something called “open travel” or “open booking,” that is about to change corporate travel procurement. It says that travelers will book whatever they want as long as they don’t exceed budgets and fulfill other vague management requirements, such as paying with a corporate credit card.
Travel Management Companies will have to find new roles (no one is quite sure what those might be) and corporate travel managers will see their responsibilities changed, or substantially diminished.
Proponents of this new travel management strategy, which include some substantial travel buyers and data managers, assure us that travelers are buying where the want anyway, so clearly it’s best to make the best of the inevitable.
What’s interesting is that this isn’t new.
Prior to the mid 1980s, when consolidating travel procurement with a few designated travel management companies became popular, it was the default purchasing system–set your budget and let the rest take care of itself.
I’m confident that proponents of “open travel” believe that technology has advanced so much over the last 30 years that the essential management problems that resulted in consolidated travel management are no longer issues.
If we simply wait long enough, smart phones will solve everything–they’ll even change human nature.
Can Less Be More?
There are few analytical reports describing open travel’s effectiveness–those that do exist are contradictory and most are poorly executed(i). As a business strategy, open travel advances several logical fallacies that we should try to avoid:
It doesn’t necessarily follow that because some, even most, travel management programs perform poorly and that they are at odds with new technology, that all such programs must do the same.
It also doesn’t follow that travelers in general will make informed and rational purchasing decisions absent a centrally managed travel program because some travelers appear to do so, for some of their trips, at least some of the time.
Open travel’s proponents need to conclusively demonstrate that the business rules they suggest the industry adopt are not based upon the behavior of a small sample operating under exceptional conditions.
Because there are clear shortcomings with travel management practice, we are not necessarily left with a “strength through weakness” strategy that allows travelers to book whatever they want as the alternative. There are other choices.
The Big Picture
Centralized travel management exists because it is effective. Vendors extend favorable pricing and other services to purchasers because they believe the benefits exceed the cost.
Part of what vendors presume is that travel managers will influence selection and behavior. Travel programs that consistently deliver such results are those that succeed.
Why would vendors offer similar benefits where buyers stop trying to do these things Control is an essential component of preferred pricing, and open travel is signal for higher prices, not lower.
The mythology of the travel industry asserts that technology allows individuals to find as good or better discounts in the marketplace as are available through managed travel programs.
Again, that’s nothing new, the assertion has been made for as long as there have been centralized travel programs. In practice there are always exceptional situations, but consistently poor discounts are signs of a poor travel programs, not testimonials for open travel.
Technology makes traveler shopping somewhat easier, but it doesn’t make informed buyers or change human behavior. Again with exceptions, travelers do not usually share the management goals of their companies–part of a travel manager’s role is to provide structure for those goals.
A traveler’s agenda is more personal and can always be validated by countless rationalizations and “this time is different” conclusions. There is no lack of creativity in this area.
To expect individual and company goals to align so as to correctly and consistently influence individual traveler behavior is to assume that people will stop behaving like people because they have better smart phone applications and are free to use them.
Open travel is less efficient than centralized travel management, not more. It assumes pricing practices that don’t today exist, people acting in ways they don’t normally do, and, even if these point are granted, that it is the best use of a traveler’s time to research prices and keep sufficiently informed so as to make good decisions.
It’s a theory that assumes much and delivers little.
(i) Unless a study describes a sound methodology, an adequate sample size, and the precise questions it tried to answer, which is almost never the case, it falls into this category. Please see my paper on this topic.