Business travel kept climbing in 2018. Hotel occupancy rates in the United States reached record highs at an average 66.2 percent, and global airline demand rose 6.5 percent. With carriers keeping seat capacity in check, load factors rose to a historic high of 81.6 percent.
Opportunity was written all over the business travel industry, and there were moves from every angle to take advantage of the bullish atmosphere. Big stories included a huge TMC merger, massive investment in up-and-coming disruptor technology, a power move from a muscular hotel brand and a list of demands from influential travel buyers.
TMC Activity
The acquisition of U.K.-based corporate travel giant HRG by American Express Global Business Travel in 2018 began to show the true ambitions of the Certares-led joint venture that began in 2014. Until the move on HRG, GBT had not made any significant buys other than that of KDS and its Neo booking product. With a huge war chest, a big buy, most likely of another top TMC, seemed likely to
fulfill the JV’s original strategic intentions, and Hogg Robinson looked
the most likely acquisition target. Hogg Robinson revenue had fallen for several years,
while profit and share price growth have been limited.
While the companies at first expected the deal to close quickly, it was held up by regulators until July. Upon closing, it was revealed that long-time HRG client Disney had moved to Amex GBT and also bought up 21st Century Fox, which was one of HRG’s last U.S.-based clients. The companies laid off about 8 percent of the combined workforce. At the same time, HRG sold its Fraedom product to Visa.
While AmexGBT was laying out cash for the HRG acquisition, TripActions (now known as Navan) acquired another $154 million in venture capital, with the round led by Andreessen Horowitz and including previous investors Lightspeed, Zeev and SGVC. The financing followed the company’s $51
million Series B round, which closed in March 2018, and brought TripActions’ total investment to $232 million since its 2015 founding. TripActions would eventually go on to acquire an HRG rival in the U.K. Reed & Mackay, buying a huge footprint in the region.
Marriott’s Meetings Muscle
Another huge move in the business travel and meetings industry in 2018 was newly bulked up Marriott International reducing meetings commissions – notably only for the U.S. and Canadian markets.
While commissions had largely been squeezed out of the business travel picture, meetings were a different issue and many companies had meetings management models that were “funded” by commissions. They used intermediaries like travel management companies or sourcing companies like ConferenceDirect; these kinds of companies carry out the
sourcing and then keep the commission as their payment. Or, corporates might forego the intermediary and pay a full-time internal
person to source, using the commissions they receive from hotels to cover the
headcount.
Either way, when Marriott reduced meetings commissions from 10 percent to 7 percent the panic in the industry was palpable. How long would that last? How low would it eventually go? What other hotel companies would follow?
It was the last question that was easiest to answer – basically everyone. At least the larger hotel companies. IHG fell in line by March, Hilton and Hyatt followed. Dream Hotels actually increased its commission, sensing an opening to grab market share.
While the new 7 percent commission was a brand standard, experienced buyers speaking to BTN were skeptical it would hold overall and basically said “everything is negotiable” when contracting with an individual hotel management team. But it was a shot heard around the meetings industry and it may have changed how some programs relied on commissions to fund their programs.
Speaking of Marriott’s size and power… the hotel giant would get hit with a huge data breach stemming from Starwood. It would be years before that issue would be settled and Marriott would eventually pay $75 million in fines in the U.S. and the U.K. over what ended up being sensitive data for about 339 million customers.
The Microsoft Manifesto
Corporate travel is a $1.3 trillion global
industry leveraged by every major company on the planet to build
success. The industry relies heavily on technology and processes that
have not changed significantly in one, two or even three decades. This
document is meant to stimulate conversation and action to push the
industry forward.
That was the opener to a document that rocked corporate travel in 2018 and that sounds perfectly relevant today. It laid out in clear order the way a certain group of start up companies and business travel buyers, who had gathered together for an innovation summit in Lisbon six months prior, felt the industry was both faltering when it came to digitizing the business travel experience.
The group called for transparency in TMC and distribution relationships
and for mechanisms that would ensure transparency and the free flow of
data. Corporate travel programs, they wrote, “cannot be predicated on
the limitations of legacy system dependencies, opaque commercial
relationships, backdoor financial incentives and locked up data.” They
name-checked buzzwords like blockchain, New Distribution Capability and
smart contracts, but they also began to define possible paths forward.
Its tenets included the following modernizations: Owning and understanding traveler data, owning the traveler profile (with the traveler granting permissions for access), distribution customization (i.e. tailored bundles), advancing an artificial intelligence vision and also applying that to destination experience for the traveler and, finally, looking at payment strategies that go beyond the transaction level.
You can read the whole thing here, if you have the time this weekend.
Also, a special shout out to all the dads out there Happy Father’s Day!
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JANUARY
Wyndham announces that it will buy La Quinta
Holdings’ hotel franchise and hotel management businesses for $1.95 billion. The purchase is completed in May 2018.
Despite the EU’s ban on surcharging consumer Visa and
Mastercard payments under PSD2, many European airlines continue to impose fees
on corporate card transactions, leading to a fragmented
landscape where businesses often faced added charges regardless of payment
method.
American Express says it plans to no longer mandate
global merchants to collect signatures for purchases, but merchants may still do so
voluntarily or if asked by local law.
Choice Hotels International wants to acquire WoodSpring Suites for $231 million, upping its
extended-stay portfolio to 350 properties by adding 240 new locations across 35
states.
Amadeus looks to transition all e-Travel Management
users to its Cytric Travel & Expense platform for broader access,
expanded content, and advanced features like AI-powered expense scanning and
email-based booking.
Omega World Travel launches a chatbot and Alexa-based
voice tool to help travel managers locate travelers, filling a duty-of-care gap in existing Alexa travel functions and
enabling voice or smartphone access to real-time traveler location data.
The U.S. State Department unveils its travel advisory system assigning risk levels to countries
based on factors like crime, civil unrest, health risks, and terrorism, with
updates and regional distinctions provided as relevant.
FEBRUARY
Marriott looks to cut group and meetings commissions to 7% across its U.S. and
Canadian properties to align costs with revenue growth and support investment
in group services.
IATA NDC program director Yanik Hoyles sits down with
BTN to cover the acceleration of NDC adoption, building NDC acceptance, and
making servicing even simpler with One Order.
Uber for Businesspartners with CTM, Direct Travel, Casto Travel, and Vision
Travel Solutions to promote adoption among clients, with potential future
integration of Uber data into TMC reporting and billing systems.
Qatar Airways vows to raise financial transparency to
uphold Open Skies between Qatar and the U.S. Additionally, Qatar
agrees to stop adding fifth-freedom flights to the U.S. The agreement answers
claims from several U.S. airlines about unfair subsidies.
American Express buys AI-powered Mezi to fully launch its AskAmex product focused on
frequent Amex cardholders. During this time, Mezi continues to support existing
TMC clients but pauses on new ones to scale the Amex
partnership.
With a new Terminal 2 at Seoul’s Incheon Airport and a
soon-to-be-approved joint venture with Delta, Korean Air intends to
capture more business from U.S. corporate travel.
Amex GBT is set to acquireHogg Robinson Group’s travel management
business for up to £410 million. The deal (which became final in July 2018) merges two of the world’s largest TMCs, as HRG
sells its payments division Fraedom separately to Visa.
MARCH
Winding Tree’s ICO raises $14.2 million (15,239 ETH) from 7,000 backers.
The ICO aims to fund development of its blockchain travel platform with hotel
and airline products planned for midyear launch.
The EU’s GDPR imposes strict data privacy rules on all companies
handling EU citizens’ data—including travel programs—requiring travel buyers to
manage complex data-sharing relationships across partners, clearly define who
is the data controller and processor, and ensure compliance to avoid heavy
fines and liability for data breaches.
Bizly is on track to close a funding round with Convene as a new investor, and the two companies will team up to offer non-hotel
meeting and short-term workspaces, starting with Convene’s venues.
IHG hopes to launch a new upscale brand and create a dedicated luxury division to
capitalize on projected growth in both hotel segments over the next decade,
while also exploring acquisitions of small, asset-light luxury brands.
Airbnb revamps its core homes business including new listing categories,
curated “collections” for business and family travel, a verified
Airbnb Plus tier, and an upcoming luxury service—all aimed at raising quality,
transparency, and appeal to diverse travelers, with the goal to reach over 1
billion annual guests by 2028.
APRIL
Lufthansa will offer its lowest fares and extra
frequent-flyer perks exclusively through its direct and NDC-enabled channels, further limiting access
via traditional GDS platforms and extending its channel-specific pricing
strategy.
A former Travel Leaders Group executive, Mabelle
Meyaart, has filed a lawsuit on gender-based pay discrimination, sexual
harassment, and wrongful termination. The firm is working to dismiss the
allegations.
IHG buys a large stake in Regent Hotels & Resorts to develop its presence in the
high-end market, with plans to grow Regent to over 10,000 rooms across the
world and eventually turn InterContinental Hong Kong back into a Regent hotel.
Like Marriott’s initiative, Hilton plans to reduce commissions for third-party group and meetings
planners in the U.S. and Canada to 7 percent.
CTI is working on Plannet, a white-labeled version of the Atriis booking
tool, which has side-by-side display of NDC and GDS content, starting with
British Airways, and expanding API-sourced offerings to include hotels, health
services, and even pet care.
Lola has launched Lola Works, a lightweight managed travel platform for small and midmarket companies
that merges administrative tools with a traveler-focused app to integrate
preferences, loyalty programs, and policy guidance without restricting booking
freedom.
WTMC CEO Sarosh Waghmar talks to BTN about NDC as well as
overhauling managed travel distribution and financial models.
MAY
Marriott wants to unite its three loyalty programs into a single program with one
currency and shared benefits across 29 brands and 6,700+ properties worldwide.
This effort would allow members to combine accounts, earn and redeem points
portfolio-wide, enjoy new Elite tiers, and access improved digital features,
with a new program name to come in early 2019.
Chinese travel services provider Ctrip partners with Accor to highlight AccorHotels on Ctrip’s platform, create an Accor flagship
store, develop joint loyalty programs, and collaborate on IT. Accor plans for a
training program at 250+ hotels to better serve Chinese guests and focus on the
Asia/Pacific region. Marriott is also targeting China via a joint venture with
Alibaba.
BCD’s Advito has a new business intelligence practice that uses Domo’s platform to
deliver multi-source data insights that help travel managers understand and
optimize corporate travel beyond basic spend.
Amex GBT and Mozio have launched a ground transportation booking platform offering travelers
and agents access to over 750 operators in 2,000+ cities, providing real-time
options, cost comparisons, policy controls for travel managers, and integration
with Amex GBT’s trip management and risk tools.
Issued by Microsoft and a coalition of tech and
supplier partners, the corporate travel industry manifesto urges radical change in owning traveler data,
leveraging AI, enabling personalized travel experiences, modernizing
distribution with tools like NDC, and reinventing payments.
Hilton introduces a tiered customer-centric pricing model for flexible, semiflexible, and nonrefundable
rates inspired by airline fare structures.
JUNE
TripActions, which gained $51 million of Series B financing, endeavors to replace what it sees as a
broken trip booking and management model. Meanwhile another startup called WhereTo
gets funding to target large enterprises with an AI-powered booking tool with
fulfillment and offline support.
The People’s Bank of China has accepted American Express’
application to clear and settle domestic bank card transactions via a joint venture with Chinese mobile payment provider LianLian.
If approved, it would let Amex process payments for local customers and
travelers in China and mark the first step in bettering Amex’s presence in the
quickly rising Chinese payments market.
Marriott’s home rentals pilot in London is off to a strong start, with
CEO Arne Sorenson emphasizing their focus on legally compliant, high-quality
“whole home” rentals and plans to expand to other cities if successful, as
Marriott intends to keep differentiating itself from platforms like Airbnb.
Also, Marriott reported solid Q1 performance with 3.6% RevPAR growth, increased
group business, and a robust development pipeline.
The cost of implementing NDC is expected to ultimately fall
on corporate buyers through higher agency fees. But carriers,
GDSs, and TMCs debate about how those costs and commercial models will evolve.
Chrome River integrates with Yatra to automatically import booking data, supporting
Yatra’s 600+ corporate clients as India’s fast-growing business travel market
sees 12 percent annual growth, which is more than twice that of the U.S. and
almost five times as Europe’s.
Marriott and Salesforce join forces to
establish a customer recognition platform that integrates guest data
across systems to personalize service, while also piloting Apple Business Chat
that allows loyalty members to make and manage requests through iOS messaging.
The U.S.-U.A.E. Open Skies pact brings little immediate change, as Middle
Eastern carriers had already slowed U.S. growth. However, it politically
empowers U.S. legacy carriers and signals a move toward more economically
driven strategies by Gulf carriers like Etihad and Emirates.
JULY
Carlson Wagonlit Travel wants to roll out mobile flight booking on its CWT To Go app via Sabre’s
GetThere APIs and other tech partnerships, with features like best-time-to-buy
indicators and personalized options, that support point-to-point trips in
select markets.
AccorHotels CEO Sebastien Bazin initially confirms that the company is looking into an Air France-KLM
investment but soon does not push through with it.
AI travel assistant Mezi exits the corporate travel
space by ending ties with TMCs to focus solely on integrating its technology into Amex’s consumer products like AskAmex.
Sodexo debuts Rydoo, a travel and expense solution that melds Xpenditure and Maya,
for AI booking and expense management, central billing support, and mobile
functionality, with over 500,000 users across 6,000 companies.
Marriott is revitalizing the Sheraton brand with redesigned public spaces that feature
community tables, lounges, booths, studios, and on-site “community
managers” to appeal to team-oriented travelers, while allowing flexible
execution by property owners based on hotel size and location.
IHG reveals that its new upscale brand is called Voco, with plans to open over 200 Voco hotels globally in
the next decade, starting with EMEA.
AUGUST
Marriott tests facial recognition check-in technology with Alibaba’s
Fliggy platform at two China hotels to quicken the check-in process. The
company works toward global expansion despite privacy and adoption concerns.
IBM and Travelport hatch up IBM Travel Manager, a data and analytics tool powered by
IBM Watson and Travelport’s fare data, to help business travel managers use
predictive modeling and scenario planning.
Blockchain is gaining traction in travel via efforts like
STEP, which tokenizes hotel inventory for low-cost direct booking; HRS, which
uses blockchain for traveler profile security, GDPR compliance, and fraud
prevention; and Winding Tree, which is working on a decentralized hotel
distribution tool with smart contract-driven booking.
At its Connect conference, Cvent discusses big
investments in global expansion, platform unification, and advanced
analytics—through its redesigned event-building tool Flex, improved mobile and
onsite solutions, and a long-term vision focused on data-driven event ROI and
simplified small-meeting booking, all aimed at growing its leadership in events
technology.
IHG establishes IHG Business Edge, a B2B program for small and midsize
enterprises that goes beyond discounts to offer elite loyalty status, data
insights, and peer networking for the SME market.
Airbnb and SAP Concur have integrated Airbnb
listings into Concur’s booking platform, enabling corporate travelers to book
vetted Airbnb for Work properties directly from Concur, while
still meeting company policies and benefiting from automated expense reporting
and trip visibility.
SEPTEMBER
Hertz chief marketing officer and EVP Jodi Allen
tells BTN about the company’s “smart investment” mode, international priorities, and
highlighting Hertz for female business travelers.
BCD Travel expands its TripSource platform from
itinerary management to include mobile air booking by integrating configurable,
policy-aware functionality using third-party APIs. It will also add guest
travel tool Pana to its long-tail technology integration platform
SolutionSource.
AppZen is pushing full automation in expense management by using AI to audit and approve expense
reports without manager involvement. It would enable same-day reimbursement
when no violations are found and help managers to better track spending and
policy compliance.
Traxo introduces Traxo Connect, its new SME-focused solution that aggregates
travel data from consumer booking tools without requiring behavior change,
offering real-time duty of care insights, spend visibility, and savings through
partnerships with Tripbam and Airhelp.
Traxo and TripEasy take different approaches to serving the unmanaged-to-lightly
managed business travel market. Traxo Connect offers SMEs passive data
aggregation, while TripEasy provides an all-in-one booking and management
platform with tiered pricing to help smaller companies ease into managed
travel.
United Airlines has started a three-tier Corporate Preferred program that gives business travelers
priority for upgrades, standby, and rebooking based on company travel volume.
Top-tier Elite members get added flexibility, early boarding, and preferred
seating, all tied to contracted or Propel program corporate accounts.
Travel data and analytics providers rapidly improve their
AI-driven tools that allow travel managers to save time on routine queries and
compliance monitoring. PredictX rolls out a voice- and chat-enabled assistant that answers ad hoc data questions, flags policy
violations, and suggests actions. Yapta’s TravelAI tool turns point-of-sale and rate-tracking data
into actionable insights for supplier negotiations and rate benchmarking.
Meanwhile, CWT’s Travel Consolidator integrates booking, expense, card and
HR data to find off-channel spend and hidden costs.
OCTOBER
The Real ID initial enforcement deadline of October 1, 2020
approaches. The Department of Homeland Security urges travelers and
travel managers to ensure IDs meet compliance so that passengers aren’t caught
off guard at TSA checkpoints. The deadline ultimately is pushed out again to
allow states more time to comply.
American Airlines prepares to launch SalesLink Insights, a scalable data portal for corporate
travel buyers that offers real-time, detailed reporting on contract
performance, spend, operational metrics, and joint-venture activity.
The U.S. House of Representatives passes a five-year FAA reauthorization bill that omits controversial
proposals like privatizing air traffic control and regulating airline fees, but
includes mandates on minimum seat sizes, improved disruption communications,
and bans on post-boarding passenger removals and in-flight voice calls. The U.S.
Senate also passes the bill, and not long after, Trump signs the bill
into law.
Uber and Lyft look at expanding their services to support wider business needs
like healthcare transport, commuter benefits, events, and recruiting. The
companies also continue to work on corporate travel features like trip
classification, expense integration, and loyalty rewards.
The IRS is expected to clarify that while companies
can still deduct 50 percent of client meal expenses, deductions for client entertainment like sporting events are no longer
permitted.
Certify makes its first international acquisition by
buying Spain-based T&E specialist Captio, gaining over 500 European clients and leveraging
Captio’s local tax expertise to compete with larger firms like Concur.
Previously targeting end-user business travelers, Upside adds
Upside Corporate, a free program for SMEs to get cashback
rewards, travel spend reporting, and employee onboarding support while keeping
its core traveler booking tools unchanged.
Groupize tries supporting corporate guest travel by integrating with SAP Concur to
provide managed booking, payment, and communication tools. It thus positions
itself as a direct competitor to BCD’s Pana.
NOVEMBER
Travelport becomes the first GDS to process a live NDC-based flight booking via its Smartpoint system and with
travel management company Meon Valley Travel, signifying an early step in
broader NDC adoption, though economic and integration issues remain.
United Airlines reports strong corporate revenue
growth but faces concerns from analysts over a sharp 29 percent year-over-year
rise in agency commissions.
Alaska Airlines kicks off its Saver basic economy fare that has limited flexibility and
no seat selection. The carrier also increases checked bag fees as it reports a
year-over-year decline in Q3 net income due to rising fuel costs despite
revenue and traffic growth.
Barcelona-based travel management startup TravelPerk scores $44 million in Series C funding, which it will use to accelerate product
development and European expansion.
Travel and Transport has fully acquired Radius Travel, a move it had been working toward since
2015. It strives to leverage Radius’ scale and technology while maintaining its
structure and global partnerships, amid ongoing industry consolidation and
shifting distribution standards.
As hotel rates keep modestly rising, a growing trend of “facility,” “amenity,”
or “service” fees often hidden in bills shows up as a major pain
point for buyers attempting to manage total lodging costs during 2019
negotiations.
Uber includes Uber Eats in its Business platform, which lets companies
set usage controls, centrally bill orders, and access detailed reporting as
corporate use of the food delivery service surges.
DECEMBER
TripActions gets $154 million in Series C funding and
reaches unicorn status. This exemplifies the rise of venture
capital into corporate travel startups, as investors pursue high-growth
opportunities in a market viewed as ripe for tech-driven disruption.
BCD initiates a pilot with Lufthansa Group to test IATA’s NDC
standard and discover its readiness for personalized airline content and
integration challenges, while noting added costs and workflow complexities.
Hyatt’s choice to cut meetings commissions to 7 percent aligns with the
actions of other hotel chains. This makes it harder for independent planners to
operate, and could lead to dynamic, demand-based commission models.
Marriott discloses a massive data breach affecting up to 500 million Starwood
guests, with unauthorized access dating back to 2014 and including sensitive
personal and payment information. The incident, tied to Starwood’s systems
predating Marriott’s 2016 acquisition, leads business travel managers to demand
stronger data protection commitments and explore more secure payment
solutions like virtual cards.
Sabre seeks to purchase Farelogix for $360 million in an effort to bolster airline retailing and NDC stature. Yet that merger
never happens, and Farelogix is eventually bought by Accelya in 2020.
Timeline produced this week by AI and BTN editorial content and engagement manager Gianna Song
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Elizabeth West is the editorial director of the
BTN Group. She has reported on the business travel and meetings industries for
24 years. Beth was editor-in-chief of Meeting News from 2006 to 2008 and
director of content solutions for ProMedia Travel from 2008 to 2011, when
ProMedia was acquired by Northstar Travel Media and merged with BTN. She became
editor-in-chief of BTN in 2015 and editorial director of the BTN Group in
2019.
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