Concur: Technology Partner or Competitive Threat?

This is the first in an indepth series on open booking.

There are two ways of looking at technology vendors that are targeting the open booking market in business travel.

One school says companies like Concur that push open booking are out to eat your lunch, your dinner and your entire business.

The other school says open booking solutions like Concur’s Connect platform are simply the next step in the evolution of business travel – i.e. Travel 2.0.

A wary view
For those who see a competitive threat, Concur, a travel technology company that built its name on expense management, is a lightning rod.

“Many of our corporate-oriented agencies are concerned about Concur and see them not as a partner, but as a competitor,” said TAMS president and CEO Bob Joselyn. “Questions have come up about Concur’s long-term role in the industry. A lot of agencies view them warily. Very warily.”

Though multiple vendors tout products that consolidate data from multiple booking platforms into a single stream that feeds into a corporate system, none matches Concur’s clout. According to Concur’s website, it processes more than $50 billion in travel and entertainment spend annually. That’s about 10% of the world’s T&E spend, according to Concur.

New foothold for Concur
Last year, Concur stunned the travel agency industry when it won an exclusive contract for the next iteration of e-Gov Travel Service, the federal government’s electronic travel program.

The 15-year contract covers 90 federal agencies and could be worth $1.4 billion.

Concur takes over in November as sole travel and technology provider for the government’s electronic travel program. The program is currently handled jointly by CWTSato Travel, HP Enterprise Services and Northrup Grumman Mission Systems.

In the eyes of some, Concur’s move signals a strategic move into the travel management side of the business, making it a clear competitive threat to corporate agencies.

Capturing rogue bookings . . .
Concur’s latest offering, Concur Connect, puts travel agencies in an awkward spot. The product, like similar solutions offered by other technology providers, promises to bring open booking back into managed travel.

The concept is simple, said Concur co-founder Mike Hilton, executive vice president for product management and strategy, global marketing. Travelers book direct at vendor sites, getting negotiated corporate rates, while the travel manager gets full data.

. . . or enabling agency bypass?
That gives agencies a tool to lasso rogue bookings that are currently outside the system.

It also gives Concur an opportunity to promote bypass and grab agency clients.

“We are providing a channel where travelers can book direct and take their itinerary direct to Concur,” Hilton said.

“If the company has Concur turned on, the data flows directly to the travel manager. Policy checks and compliance audits can be performed automatically. The traveler gets flexibility, the travel manager gets data, visibility and control.”

Concur & travel agencies
And what does the company’s travel agency get? That depends.

Concur is happy to work with agencies, Hilton said, but the choice lies with the company. As far as Concur is concerned, its primary relationships and responsibilities lie with client companies and with the hotels and other vendors that sign up to participate.

“On the agency side, we’ve seen mixed reactions,” he said. “Some agencies see Connect as a challenge, and some see it as an opportunity. These are bookings that agencies aren’t seeing anyway. This is a way to bring those rogue transactions and rogue travelers back into the system.”

Agents aren’t the only ones who see issues with open booking. Travel suppliers have concerns too, since open booking has implications for negotiated rate programs. (See sidebar.)

Managed travel falls short
The very fact that up to half of hotel bookings are made outside managed programs says that current travel programs are not meeting travelers’ needs.

As Hilton put it, it’s not a leakage problem when companies are losing half their travelers to non-program booking channels – it’s a flood. In his view, direct booking vendors are simply offering product to meet demand that more traditional travel management channels can’t fill.

More talk than reality?
Even given the scale of rogue bookings, not everyone believes that travel managers and agencies need to worry about competition from open booking vendors like Concur – at least not just yet.

It’s not that traveler discontent and the threat of bypass by open booking aren’t real, , said Carmine Carpanzano, CEO of nuTravel. But despite all the talk, he isn’t seeing any real shift in behavior.

“Open booking has been out there for a while,” he said. “I am not seeing any big change in the way people are actually booking and traveling.”

Lea Cahill, chief operating officer of Atlas Travel, had a similar assessment. “There are starting to be technologies that meet the need of open booking and managing by budget if you want to take that path. But that path is not for all,” she said.

“What we’re seeing with Travel 2.0 is technology getting ahead of corporate needs and policies.”

Next time: The promise (and problems) of open booking