Detractors say new players like TripActions, TravelBank and Lola are flashes in the pan. Despite these companies' successful funding rounds, the doubters question the profitability of the new all-in-one travel booking, travel management company and, in some cases, expense management providers. About one startup that has made inroads into the managed travel space, one naysayer speaking on condition of anonymity said, "I give them another year, maybe 18 months." Talk to companies whose travelers and travel managers have their hands on the products, though, and the startups are making an impact.
Flywheel is one of those companies. The startup manages and hosts WordPress websites for designers and creative agencies. It has about 200 employees, mostly in Omaha but also distributed in offices in Germany, Spain, Portugal, India, Macedonia, Canada and Australia. Its travel spend is on the small side, roughly $200,000, but when Steve Isom joined as VP of finance about a year ago, "we just didn't have visibility into the spend or what travelers were doing," he said. He also didn't have a lot of time or resources to fix it.
The company had an agreement with Amex GBT, but as a very small fish in that large pond, Flywheel struggled, Isom said. Part of the problem: The online booking platform wasn't popular with travelers. Employees would search the cheapest flights on Google and then book direct on the supplier website or through an aggregator like Expedia.
With "extremely high" leakage, finance concerns weren't even Isom's top priority. Duty of care was an issue; disruption management was a productivity killer, and not just for the traveler. Because they were booking direct, "travelers didn't really have a point of contact" when travel went awry, said Isom, and the need for headquarters to help with rebooking put pressure on resources.
Simultaneously, Jennie Robertson, former travel manager for Tableau, had taken on a new challenge. She departed Tableau to establish a managed travel program for digital product design technology firm InVision, with its fully distributed workforce of 800 employees. As at Flywheel, travelers booked through various channels, and the company relied on messy expense data to gain visibility into spend. Travel plans were murky, as well.
None of these dynamics are surprising. Startups are concerned with topline growth: driving sales, partnerships and revenue. Both Isom and Robertson wanted visibility into travel spend and the ability to put some structure around traveler choices, but the question wasn't about how to install the rules to lock travelers into a program. Rather, the challenge was how to draw travelers in.
Lead with the Booking Experience
Traditionally, the first move for a travel manager is to contract with an agency. An online booking tool is often the second step. Most often, the agency resells a third-party booking tool. The dominant player is SAP Concur Travel, but there are plenty others. Alternatively, a travel manager can contract with the booking provider. This route offers more independence but potentially less technology support through the TMC.
Emerging TMCs like TripActions and Lola market a technology-first model, and the booking tool is the access point to all service and support. It's a closed model in which clients can use only the tools provided by such a TMC or its existing partners. For Isom, fewer choices and layers make for a feature, not a bug. "For us and for a company of our size and also people being relatively tech savvy, no one considered ever doing anything like having some type of travel agency sit on top or using some service firm," he said. He was looking for an all-in-one solution his travelers would enjoy using, that represented an instant upgrade compared with booking on the open market and feeling alone during travel disruptions. Lola fit that bill.
For Robertson, the model—open or closed—wasn't the determining factor, it was the booking tool. "When you are going with the open model, which I know is more popular, you have to have the booking tool and the relationship with the agency, but if the booking tool is your No. 1 priority, you are going to go with whichever model has the best booking tool." She partnered with TripActions.
Make Onboarding Easy
Robertson implemented the Trip-Actions tool in phases. She ran a soft launch by requiring a set of travelers to book via TripActions for a corporate conference. After the conference, to Robertson's surprise, numerous travelers went out of their way to thank her for the technology. They liked TripActions' mobile booking, which Robertson said is nearly on par with the desktop version in experience, functionality and available content. "Ninety-eight percent of what you can do in the desktop app you can do on the mobile," she said. "A lot of people these days want to use the mobile, and TripActions is really easy and slick."
Flywheel opened Lola all at once to its travelers. "We said, ‘Hey guys, use this. If you have any questions, let us know.' That was the deployment," said Isom.
TripActions offers more policy configuration options than Lola, and that worked for Robertson, whose program has specific fare guidelines for air travel, plus cost thresholds for travelers who need flexibility to find more convenient flights or require ancillary services. Because Flywheel has a less formal program, Isom liked Lola's "high-level guidance on the policy side," which he set up in five minutes. "Beyond that, people just self-service figured it out themselves," he said.
Both Isom and Robertson praised the messaging and chat support on their respective platforms. More traditional TMCs are bringing that feature to the table on their mobile apps, but the tight chat integration with the mobile booking capability offers benefits for Flywheel and In-Vision travelers. Isom also mentioned Lola's concierge-style support, which works via chat. In the case a flight connection is canceled for a traveler already in the air, for example, Lola proactively books a new flight. Isom has happily waved goodbye to in-transit travelers calling the Flywheel headquarters for support.
That said, content issues have been one challenge with Lola, according to Isom. European low-cost carriers like Ryanair are missing on the platform, a problem for Flywheel's Europe-based travelers, and until July, Southwest wasn't available. TripActions has had its own content snafus. Delta removed its content from the desktop and mobile booking tools temporarily in January. Though it was reinstated fairly quickly, the gap was painful for TripActions users. To re-engage, Delta required certain features on the TripActions booking display. It also required the startup to ditch a feature that awarded travelers for booking cheaper flights. More on this later.
In terms of hotel content, neither Flywheel nor InVision supports its own hotel program. Flywheel doesn't have the spend to leverage, except at the one hotel in Omaha with which it "negotiates heavily," according to Isom. InVision taps into content from Hotels.com, Booking.com and other hotel aggregators—which Robertson said is a huge plus for her program, given the company's distributed workforce and the resultant lack of concentrated volume in any particular city.
The Bottom Line
Both Flywheel and InVision operate fairly simple travel programs—they don't juggle a lot of preferred supplier negotiations—but they do want to control costs, manage duty of care and provide travelers with a good travel experience from booking through landing back at their home airports.
Isom and Robertson also need to manage their own time and resources. The commercial structures of Lola and TripActions contribute to that. Isom isn't concerned about how much traveler service Lola is fielding versus Flywheel. It's not the typical per-transaction or per-minute model, he said. "There's no concept of like, ‘Uh-oh, I'm getting help. The meter is running.'" Lola has a monthly subscription model; TripActions charges a fee per trip that includes service and support, ticket and hotel changes, cancellations and agent chatting. Both Isom and Robertson think their partners give travelers what they need while also giving program administrators visibility throughout the program.
Isom said the Lola dashboards clearly show where spend goes, even across verticals for any department or any time period. Isom also can see where Flywheel's travelers are and where they plan to go. He said Lola's integration with Expensify has simplified the work of his finance team, making booking, corporate card and expense data easy to reconcile.
Robertson, who credits the TripActions traveler experience with attracting adoption rates of 95 percent, said that's the only way to get true travel program data. "Getting real numbers—that's the value when you are building a travel program," she said.
Staying Power
Recent frays over content, booking tool displays and even certain app features, such as the above mentioned issue between TripActions and Delta, have demonstrated the vulnerability of startups to be buffeted by the interests of big industry players.
Prospective buyers might consider how such dynamics could affect their programs. Robertson remains a strong TripActions supporter and can point to the successes of her program. She has been outspoken about her distaste for Delta's tactics, which she has noted seem limited to emerging players. "With Concur, Egencia and the others, [display and features] are business as usual as far as I can tell," she said. A handful of other small players have told BTN they are getting similar pressure from large suppliers.
Robertson and Isom shrugged off questions of whether their TMCs ultimately had staying power. Lola "was started by Paul English, one of the most successful entrepreneurs in the travel space. I have very little concern [about stability]. Additionally, the company has attracted some of the leading venture capitalists, who I believe will continue to fund the business," he said.
Robertson pointed to TripActions' $480 million raise but also to the uncertainty of working with big-name suppliers. "Look at the pace of consolidation in the industry. Orbitz and Travelocity both had corporate offerings. They were bought by Expedia and merged with Egencia. Other traditional TMCs are merging left and right. There were other entrants we did not consider because they weren't as far along and didn't have the backing TripActions has, but we felt as confident with TripActions as we could feel with any other TMC due to their solid financial backing."