Transforming Corporate Travel: Fixing a Broken System

My desire to create "The Perfect Trip," as it was known during my Concur days, has become pretty widely known. What became increasingly obvious over the years was that we were not going to achieve that vision on the existing closed and fragmented platforms that, even today, dominate and serve the travel industry. To deliver on The Perfect Trip would require reimagining some foundational elements of the travel ecosystem. Shortly after I left Concur in 2017, cloud-native architectures and AI/ML reached a level of maturity that made reimagination of the travel tech stack possible.

Between the summer of 2018 and the spring of 2021, I had the good fortune of forming partnerships with three visionary entrepreneurs with whom I found kindred spirits and recognized their dreams as three of five critical pillars that would be necessary to transform the corporate travel industry.

Spotnana, Troop, and Center were the foundation on which a new travel stack could be created to transform the $1.4T corporate travel industry and truly delight business travelers, the companies they work for, and the suppliers that serve them.

The acquisition of Direct Travel on April 2, 2024, is the fourth pillar in realizing our vision for a new travel technology stack. We are very excited to work alongside a group of long-term-oriented investors on this vision — and about the next era for the travel industry. I am privileged to serve as executive chairman, and I look forward to working alongside long-time colleague and dear friend, Christal Bemont — an incredible executive who will come in as the new CEO of Direct Travel. Christal and her team will be working to modernize the entire travel stack. Our vision, outlined in this blog post, is not about introducing another incremental change, but rather igniting a revolution in corporate travel.

How Business Travel Works Today

The corporate travel industry is a complex ecosystem that serves companies of any scale across all geographies and sectors. The best way to understand it is to break it into five core groups.

Customers

Business travelers and the companies they work for, are who we strive to serve. Booking trips, managing complex itineraries — whether individual or group — managing trip changes, providing duty of care, filing expenses, managing approvals and audits, providing service when and how you need it, and managing spend in compliance with corporate needs are all important items — but not the most important. And ideally, all of this is seamless and invisible. The most important item is the person (or people) taking the trip and the goals of the trip.

Problem: Travel logistics are a meaningful and stressful part of business trips. Sadly, even with all the work that goes into those logistics, systems do not communicate with one another, and too much of the process is manual. Even today, basic things such as integrating into a traveler's calendar, providing access to all travel inventory in the world, predicting needs, proactive and intelligent responses to travel disruptions, checking into a hotel at the ideal time, seamlessly integrating ground transportation logistics, and automatically filing (or eliminating) expense report are just ideas. The problem is even bigger with group travel as nearly every element is manual.

Global Distribution Systems

GDSs (e.g., Sabre, Amadeus, Travelport, Travelsky) are the foundation on which the current travel ecosystem is built. They connect content (e.g., airline seats, Wi-Fi, hotel rooms, car rentals) from airlines, hotels, and car rental providers to booking tools, like Concur, Navan, Neo, and Egencia, which are used as part of a Travel Management Company (TMC) solution stack to serve the business traveler. Some GDSs also provide suppliers with the technology platform to run their own branded systems. Historically, suppliers such as American Airlines, United, Lufthansa, Marriott, Hilton, and Hertz delivered 100% of their content via various GDSs.

Problem: Content has fragmented. Today, less than 50% of content is available via the GDS. By and large, GDS infrastructure is decades old, innovation cycles have slowed, and GDS systems are not extensible by other members of the ecosystem. Moreover, the needs of suppliers and customers continue to evolve. Suppliers want to differentiate and merchandise their content in a way optimized for a specific traveler at a specific moment. Customers want access to all content and for that content to be combined intelligently to meet the specific needs of a traveler on a specific itinerary — even if that involves using competing suppliers. They would also like their TMC to be able to easily service that content. Slow innovation and closed systems combined with rapidly increasing customer and supplier needs lead to an increasingly disjointed and frustrating traveler experience.

Travel Management Companies

TMCs manage corporate travel programs for companies, helping them organize, book, and manage traditional corporate and group travel programs and related costs. TMCs often partner with technology companies such as Concur, Serko, Deem, and others to deliver end-user applications and various companies (e.g., Concur, Sabre, Amadeus) to solve the mid-office needs related to running a TMC. Thousands of TMCs are scattered around the globe with ten large-scale TMCs, including GBT, CWT, BCD, FCM, and Direct Travel.

Problem: Historically, TMCs have not differentiated on products. They all sell Concur, Deem, and various other solutions and often sell and support multiple solutions. The result is that it is very expensive to build and run a TMC. Perhaps more importantly, it is very challenging to provide exceptional customer service and client experience. The fact that these legacy solutions are built on GDS platforms that are not open and not extensible makes the goal of delivering an incredible client experience at a better value proposition even more challenging. These fragmented technology stacks also make delivering proactive, intelligent responses to travel disruptions nearly impossible.

Technology Providers

This category includes a broad range of companies, ranging from online booking apps to expense management to event management to carbon emissions tools to duty of care solutions, to list a few. That said, there are a modest number of scale providers, including Concur, Deem, Serko, and Cytric. These scale providers deliver online booking tools and perhaps integrated expense management. Historically, technology companies have partnered with TMCs to serve the end customer and have built their booking tools on top of the GDS stack.

Problem: In the SaaS era, these technology companies had largely been the innovators in the travel ecosystem. Companies like Concur helped move the industry from paper-based models to digital experiences. That said, as technology platforms have moved to cloud-native architectures, which enable intelligent (AI) applications and open platforms, these innovators have not kept pace. This is in part driven by protecting existing business models and in part because building from scratch requires you to rethink all your prior assumptions. Evolving business models and rearchitecting legacy solutions is certainly not for the faint of heart and it is very hard to do for most scale organizations.

Suppliers

Suppliers make business travel possible, and they are as varied as competitors in any industry. Even within a brand, there are different value propositions available. The Marriott Courtyard offers a valuable and different experience from the Marriott Ritz-Carlton. Suppliers want to reach business travelers through the corporate tools that are used to manage business travel programs and deliver exactly what the traveler is looking for. They also want to integrate the client experience seamlessly with other members of the travel supply chain.

Problem: At the point of purchase, in a corporate travel booking tool, the supplier has no idea who the buyer is. They have no idea if you are a road warrior or if this is your first business trip, if you are the CEO, or if you are an intern. Understandably, suppliers want to differentiate and merchandise (consistent with corporate policies) their content in a way that is optimized for a specific traveler at a specific moment, in the context of their own demand environment, in real time. They want to offer cross-supplier merchandising in real time, based on the needs of the client and their own demand environment. All reasonable objectives. None of which are available within the existing legacy solutions.

Summarizing our current travel ecosystem is simple. Data is fragmented. There are a lot of inefficiencies between the buyer of travel services and the provider of travel services. The travel experience is rarely consistent or seamlessly integrated. While customer data is often used to market to us, it is rarely used to deliver a delightful experience. Technology platforms are largely closed, such that innovation from one company is rarely additive to that of another company.

A New Travel Stack Emerges

To deliver on the vision of The Perfect Trip, a new foundation is needed. We need to fix the "plumbing" in our industry. We need to deliver — across Spotnana, Troop, and Center — the equivalent of AWS for the multi-trillion-dollar travel industry. An open, extensible platform for travel, group meetings and events, and payments and expenses. We need to enable innovation from one company to connect with and benefit from innovation from another company — on a global basis.

Spotnana

Spotnana is a Travel-as-a-Service platform through which any partner (TMC, technology, or supplier) can deliver a delightful client experience at a better value proposition than anything in the market today. The Spotnana platform integrates the distribution of content — whether from the GDS or from NDC pipes that it builds for suppliers (and makes available to any partner), with traditional mid-office services that afford automated servicing of content regardless of the source and a delightful user experience to book travel — all in an extensible, open platform that anyone can add value to. You can read more about how Spotnana is working to enable The Perfect Trip here.

Center

is a card-first expense platform delivered as a stand-alone expense management solution or via open APIs. This embeddable service can be integrated into other solutions (e.g., travel solutions, banking solutions, group travel solutions, vendor payment services). Center's solution integrates directly to the card processing layer of the payment stack, enabling it to enforce and audit corporate policy at the transaction level and at the point of the card swipe. Center makes the payment vehicle (e.g., corporate card, virtual card) intelligent and has become the frontier for visibility and control. Center is literally eliminating the concept of the expense report. You can read more about how Center is working to enable The Perfect Trip here.

Troop

Troop is a meetings & events management platform. The M&E market accounts for more than 50% of the corporate travel market yet it is largely served via manual processes. Troop provides an open, extensible platform that allows customers to easily plan, book, manage, and expense group meetings. Troop provides meeting venue NDC pipes for the long tail of content critical to enabling successful events — from hotel meeting rooms and services to specialty venues designed for offsites to private dining rooms and office spaces. All are managed in a real-time group itinerary. Of course, as the world moves to a more distributed workplace environment, there is a growing need to provide a delightful travel experience to serve the M&E market. You can read more about how Troop is working to enable The Perfect Trip here.

Direct Travel

Direct Travel, as you would expect, builds on top of all three of the above platforms to deliver a seamless solution for business travel and expense needs, as well as group travel and expense needs. Combined with their own AI-powered extensions — in the form of co-pilot services, predictive in-trip services, and world-class customer service infrastructure — their mission is to deliver The Perfect Trip.

Not only are the Center, Spotnana, and Troop platforms open, extensible platforms that partners can build value on top of, but they are deeply integrated. In fact, Troop's M&E platform books travel using the open Spotnana APIs and content services and enables group expense management via the Center embedded payments and approval services. Together, these four companies, and any partner that extends the value of these open platforms, will transform the travel industry.

A Missing Link

There is a large piece of the corporate travel tech stack that still needs to be modernized and served via an open and extensible platform. Hotel content, property management, and reservation systems. The dominant systems are multiple decades old and do not afford the capabilities to provide flexibility or the range of services needed in the market. As someone who has logged tens of millions of flight miles, I would love a system that allows me to reserve a hotel from the time I arrive in a town to the time I need to leave, not from 3 pm to noon. I should be able to specify a preferred room, bedding, food, exercise equipment, or any other service. None of this is possible now. Personalization is non-existent in the hotel ecosystem.

Of course, such a modern technology stack would be integrated into and serviceable via Spotnana for individual travel, Troop for group travel, and, of course, automatically integrated with the payment and expense services of Center. Consistent with our philosophy that all platforms must be open, such a platform can be extended by any partner committed to enabling The Perfect Trip.

Madrona's Roots and Vision

Madrona is no stranger to the travel industry. Long before I joined, Madrona helped start and fund Farecast — a product that analyzed travel fares to help its customers pick the right time to buy tickets to get the best value. Farecast was started by AI2 Co-founder Oren Etzioni, and Mike Fridgen served as CEO. Mike is now the CEO of Madrona Venture Labs. Madrona Co-founder Gerald Grinstein served as the CEO of Delta Airlines for nearly 4 years, and served on the board of Expedia.

We are at the dawn of a new era in the travel industry. Travelers, suppliers, and those members of the ecosystem that bring The Perfect Trip to life will be the beneficiaries. We are honored to partner with the innovators at Spotnana, Troop, Center, and Direct Travel to deliver incredible value to business travelers, the companies they work for, and the suppliers that serve them. And, yes, we see more opportunities to innovate and create value. If you are reimaging key elements of the travel ecosystem, we would love to hear from you.

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