SAP: The world’s largest travel company?

I recently read about how the rise of ultra-long-haul flights is driving down the costs of conventional routes – and giving corporate travellers some interesting new choices. Some will go with the conventional routes because they’re more affordable, but others will opt for ultra-long-haul because of the uninterrupted productivity it gives them, particularly as connectivity on airlines increases in affordable ways.

It struck me that in most cases, employers cannot expect to make that choice on behalf of their employees. Most of those employees now see business travel as an experience – one that should cater to how they prefer to work and rest. Corporate trips have become part of the flexible workplace.

Choice, of course, is not always easy to manage. We’re starting to see much more competition and complexity emerge in the corporate travel market as more and more travellers demand more and more choices. Travel management companies (TMCs) are in a race to the bottom on fees because customer pressure is so high. A lot of airlines are now exploring New Distribution Capability (NDC), which essentially acts as a platform to personalise content, and perhaps even prices, to individual travellers based on their trip history. NDC potentially circumvents a lot of employers’ corporate travel platforms by going direct to the traveller, making it even harder for companies to control how their people travel – if they ever really could.

All this points to big chances for the corporate travel industry, and what the travel company of tomorrow looks like.

Will software eat the travel industry?

Today’s TMCs run predominantly on people-power. Whenever you make a booking or submit your travel preferences, there’s someone behind the scenes who assesses what’s on offer and (hopefully) finds you the best itinerary possible. Future TMCs will need to run on data. They’ll source it from airlines, hotels, card providers, and other travel vendors at a literally global scale, and process it with automation and analytics to give business travellers a comprehensive selection of choices for any need. It’s the only way by which companies can offer their employees the sort of choice and level of experience that they’re already accustomed to as consumer travellers.

Who has that sort of technology to bring in such data, with that degree of scale?

The idea of software companies like SAP leading the travel space is not as paradoxical as it may seem. In SAP Concur, we already pull together almost all data that business travellers use on their trips: airline and hotel bookings, on-trip expenses, and so on. That takes investment in APIs and platforms for travellers, like our mobile apps, which smaller TMCs have struggled to get their heads around.

A lot of companies already use our platforms like TripLink to not only track their people’s itineraries, but keep them within policy and make direct bookings with suppliers. And SAP has the depth of analytics software to make sense of this data, as well as automate how companies interact with it – for example, by working with other tech companies like Ariba and Thomson Reuters to develop software that automatically handles the governance issues associated with frequent business travellers’ tax liability. The software company’s advantage is that it can tie together every piece of the traveller’s experience – with the traveller’s profile as the common thread through all that data.

I will be honest and say that SAP may not become the world’s biggest travel company – not least as we’d need to issue tickets to do that! But it might fulfil the key functions of one – as may other technology companies investing in this space. One thing is for certain: we will need technology to save the corporate travel industry from the path it is currently on. There’s no other way to give travellers the choice they want, and employers the control they need, without analysing and automating how we use data at a global scale.