ON BABIES, BATHWATER, and TMCs

by Jeff Klee, on April 15, 2019

This Op-Ed first appeared April 8, 2019 on The Company Dime.


In his recent post, “On The Compromises Of Corporate Online Booking Tools,” Tony D’Astolfo warns travel buyers not to throw the baby out with the bathwater by choosing an unproven travel management company just to get a better booking tool. In this metaphor, the bathwater is the online booking tool and the baby is the traditional TMC offering.

There is plenty of bathwater out there, for sure.

But maybe the baby needs to go, too.

I know it sounds crazy at a time when TMCs are experiencing record prosperity and valuations. But let’s face it, for the most part we’re still peddling yesterday’s travel management services, maybe with a few extra bells and whistles. Fundamentally, the value proposition of a TMC today is similar to that of a decade ago. This slow pace of progress has put a target on our backs, and startups are coming out of the woodwork to take a shot.

TMCs provide valuable services. But what we rarely talk about is that in order to get benefits A, B and C, company travelers have to give up the D, E and F they’d get by booking directly with suppliers.

These dynamics should concern all of us. The travel management business is like a bucket leaking (albeit slowly) more water than it is taking in. Our value proposition is shrinking faster relative to supplier sites than we are growing it elsewhere. Clients seem relatively accepting of this — for now. Within the industry there is a sense of comfort, not urgency.

But that’s what the startups have going for them. Sure, we can dismiss them as “unproven” for a little while longer, but don’t we see where this is going? They’ll reach the moon first if they’re the only ones shooting for it.

To be clear, I am not trying to frame a contest between legacies and startups. We’re all on the same side and have to overcome the same obstacles. Some of us have just been quicker to take up arms.

That’s my point, that we should all join the battle because, yes, there is one being fought. The problems are well chronicled — outdated technology, rigid protocols, dysfunctional processes and ridiculous data flows. They tie our hands, close our minds and stifle our imaginations. If we ignore these problems, the market will eventually turn on us.

There are three big things that we as TMCs need to do. Unfortunately, none are easy.

1. Completely Overhaul Our Technology Platforms

Many TMCs still place the GDS at the center of their technology stacks, using it not just as a content source, but also as a database, a CRM system and a point of sale solution. This is suicide.

More than anywhere else, this is where we need to get rid of the bathwater and the baby.

As products and services become more complicated, TMCs absolutely must have their own modern, flexible datastore where they store, retrieve and manipulate customer, booking and transaction data — independent of booking source. This datastore should be the single version of truth for the whole organization and the only interface with mid-office, back-office or reporting systems. The platform should pull inventory and sync bookings from any GDS or non-GDS pipe. The OBT, agent desktop and mobile app should all ingest the same content and use the same datastore. Passive GDS segments should finally make their way to the ash heap of history.

2. Close The Content Gap

Once we have the proper technical platforms to consume full content, we must do whatever it takes to bring every fare brand, seat product, airline ancillary, hotel room, hotel upgrade, etc., into our systems from whatever source necessary — for the sake of our customers and our supplier partners. Truly full content should be a table stake.

Of course, we’ll have to change our mindset. When someone asks a GDS, “When will this NDC content be included in my existing workflow?” we’ll want to applaud enthusiastically the GDS with the courage to say, “Never.” We should understand that shoehorning new content into old workflows dumbs down the content and exponentially increases the time to market. True full content must be the overriding objective. To that end, the existing workflow needs to be sacrificed.

Supplier content isn’t the only type of content we need to improve. Our customers shouldn’t need to know the difference between travel data, expense data and card data. It’s on us to find a way to loop back the expense data so we can simply report to them their total trip cost.

3. Start Innovating

Here is where it will finally get fun. With a platform that allows them to be technically agile and the full content imperative out of the way, people a lot smarter than me will go to work, unconstrained by historical bottlenecks. They will come up with innovations that I can’t even imagine to make life better for travelers, travel arrangers and their companies. This will push the industry forward.

You may wonder why I pitch this so passionately. As a TMC founder, if I’m right that TMCs will become irrelevant if they don’t follow my advice, shouldn’t I keep quiet and exploit the eventual difficulties of my competitors? I don’t see it that way. I really do see this as a “we’re-all-in-this-together” kind of thing because no one — regardless of their valuation — has the scale to do this alone. It is critical for all of us that there are enough successful TMCs to support a vibrant network of service providers for the community. Similarly, we need enough TMCs out there generating enough business to justify supplier investments into third-party distribution.

Throughout the years, the TMC community has had the patience of Job, but patience is no longer a virtue in the digital age. To strengthen our industry, we collectively need to take action. We need to commit to taking control of our own destiny, instead of waiting for GDSs or expense management companies to solve our problems and plug our gaps. I know that what I’m suggesting is much easier said than done. To get where we need to go, we’ll have to fight fights, bite bullets and repay a boatload of technical debt.

Although it will be hard, it will be even harder if we wait much longer.

 

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