Travel Apps and their Place in a Corporate Travel Program
As smartphones and tablet computers have integrated themselves into the lives of business travelers everywhere, the impact such technologies have had on business travel management has become evident to card program administrators and users alike. In many cases, significant increases in productivity are possible for all players involved within a company’s travel program, but in others, tools that are not part of a managed travel program can cause friction between administrators and users, including concerns regarding control and compliance. As travel apps become increasingly popular, travel managers should ensure their organizations clearly designate approved apps that meet functionality, reliability, and IT security requirements and also spell out permitted uses of these apps within travel policies. For travelers to accept and favor approved apps, these apps must provide superior benefits and more intuitive navigation in comparison to other travel apps available for download.
In today’s market, nearly every business traveler uses a mobile device that runs on the iOS, Android, or Blackberry platforms, all of which have incorporated Apple’s concept of an App Store into its build. In 2011, most global distribution system (“GDS”) providers approached the market with apps of their own. The current environment of capabilities encompasses nearly every travel management point of contact. For example, users may reserve and rebook transportation & lodging, check-in prior to arrival, view status updates, display boarding passes, convert currencies, capture receipt images, and complete and approve expense reports on the go.
M&A activity related to travel apps has been brisk, as evidenced by Concur, a provider of travel and expense management solutions. In January 2011, for example, Concur acquired TripIt, a service that enables users to manage itineraries via smartphones. The cash and stock deal was valued at $86.8 million, and additional consideration could bring the value to $120 million over time, according to more recent financial filings. Last June Concur acquired London-based expense management provider GlobalExpense for £12 million. More recently, Concur has made several additional investments in rapidly growing companies: forty million dollars for a 20% stake in ClearTrip, an online travel service provider in India, and $5.2 million for a 37% stake in Yapta, a provider of airfare and hotel rate tracking services. To cite evidence of growth in the app industry, Concur stated in February that more than one million people have used its mobile travel and expense app, while 1.5 million have used TripIt’s mobile app.1
While traveler interest in mobile functions is high, as shown in Figure 1, less than half of the respondents to a Business Travel News survey currently enable travelers with mobile expense reporting options (Figure 2), indicating that mobile travel policies are still nascent (Figure 3).
Figure 3: Companies with Travel Policies that Address Mobile Devices and/or Apps
But which apps to integrate? According to Carlson Wagonlit Travel, the concern is not so much over the additional exposure to non-preferred suppliers, which travelers may experience with a consumer app that offers booking or advertising; it’s that travelers are spending money in a nonconsolidated fashion for travel technology, leaving room for “leaky” spending and noncompliance.2 That’s what travel agencies such as Carlson are seeking to change. As mobile enablement has started to drive larger portions of noncompliance, a key goal is to corral employee behavior and direct it to products that boost the use of preferred suppliers. One initiative, for example, could be an integrated travel alert that reminds passengers to utilize contracted providers within the corporate plan structure. Alerts are one starting point to help address the fact that the majority of apps are not corporate-specific tools, and thus they do not showcase the negotiated rates and visibility that corporates rely on to control travel costs.
While ordinary consumers continue to adopt smartphones and remain cautiously aware of location-based services, business travelers appear to be more trusting. A recent survey by International SOS revealed that 80% of business travelers already have smartphones, and 83% are “comfortable” with third-party location tracking.3 This means that apps not only can utilize “push notifications” to alert travelers of destination risks, but also may be used to enforce compliance. Heidi Skatrud, Vice President at Runzheimer International, an employee mobility services company, cites the potential of car mileage reporting apps, demonstrating that usage of more accurate mileage reporting technology had resulted in a 10-15% reduction in claims.4 Another way to promote traveler compliance involves incentives. By incentivizing travelers’ behavior to enforce compliance, rather than punishing noncompliance, corporations will be able to provide more leniencies to their travelers. Significant success with these methods can already be viewed via loyalty programs that allow consumers to accrue points or badges in order to receive future benefits. Creating such competition among travelers and awarding them points for using preferred apps / suppliers and booking within policy could remove some of the hassle of administrator oversight.
Before scaling back administrator oversight, however, organizations are rightfully holding out for more stringent mobile security to ensure the dependability of the data protection involved with T&E expenditures and itineraries. In retrospect, we saw online booking overtake booking via travel agencies in the corporate landscape as security measures were enhanced. Similarly, security improvements could allow corporate travel departments to embrace mobile solutions. And with robust growth in airfare prices,5 rising rates and strong projected demand for hotels,6 and a continued desire to conduct business face to face, travel managers will need to become comfortable with mobile solutions as the app revolution continues to proceed full steam ahead.
1 Business Travel News, February 29, 2012. http://www.businesstravelnews.com/Business-Travel/Concur-said-more-than-1-million-people-have-used-its-mobile-travel-and-expense-app-while-1-5-million-have-used-TripIt-s-mobile-app/?ib=Technology&a=mgmt
2 Business Travel News, June 10, 2010. http://www.businesstravelnews.com/Travel-Management/Amex,-CWT-Get-Moving-On-Mobile–Join-Other-Travel-Management-Cos–Seeking-App-Control/?a=proc
3 Air & Business Travel News, August 23, 2011. http://www.abtn.co.uk/news/2316226-gbta-2011-mobile-apps-will-become-integral-part-business-travel-management
4 Heidi Skatrud, Runzheimer International. GBTA Convention 2011.
5 Business Travel News, January 26, 2012. http://www.businesstravelnews.com/Business-Travel/As-Demand-Gathers-Steam,-U-S–Carriers–Corporate-Revenues-Chug-Along/?ida=Airlines&a=proc
6 Business Travel News, January 25, 2012. http://www.businesstravelnews.com/Hotel-News/Hotel-CEOs-Bullish-On-U-S–Corporate-Travel-Demand/?ida=Hotel%20Chains&a=proc
For more information, please contact Alex Kays, Analyst specializing in Commercial Payments, firstname.lastname@example.org
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