EasyJet was not always the low-cost darling of the corporate travel sector. Until October 2007, when it signed contracts with Amadeus and Galileo and started selling fares through travel management companies (TMCs) and online booking tools (OBTs), the Luton-based carrier resided outside the closed walls of the managed travel garden.
Even with the benefit of hindsight, it is still hard to fathom why it took more than a decade for Stelios and the corporate travel community to reach an accord. Were both sides to blame for dragging their feet?
Possibly. EasyJet’s leisure business was growing at a phenomenal rate and, perhaps, saw no urgent need to focus on higher yielding corporate segments. Conversely, the profligate nature of the pre-recession period meant the business community didn’t consider the low-cost carrier (LCC) product to be a viable alternative to the existing legacy suppliers.
The general contention was that easyJet, and others like it, just didn’t fit into a travel policy or airline programme. Unbundled fares set cost control alarm bells ringing in procurement departments. Frequent business travellers saw no reason to sacrifice lounge access, onboard meals and checked luggage just to save a few pounds. How times have changed.
The airline is now valued by organisations across Europe.
But what if discussions had taken place earlier? What if, from the outset, forward-looking buyers and industry leaders had embraced the unprecedented growth of LCCs and worked out just how managed travel might benefit?
We’d have saved time and, arguably, money.
But have we learned anything from the easyJet scenario? Possibly not. Travel buyers’ approach to sharing economy suppliers is worryingly similar.
There is, of course, a minority of progressive voices. Some are keen to learn but don’t know where to start. But too many still have their heads in the sand. Airbnb is the poster child in the accommodation sector; Uber the disruptive new kid on the ground transportation block. And there are plenty more besides.
According to PWC, the global sharing economy will be worth $335 billion by 2025 (at present it’s valued at $15 billion). It is not, therefore, something that can be ignored. So it’s surprising that some buyers and managers still have fingers in their ears when the topic is raised.
For most, the duty of care challenges associated with sharing economy suppliers render the whole endeavour a non-starter. Or so they think; both Uber and Airbnb have stated publicly on numerous occasions their willingness to collaborate with the corporate travel community to find ways to mitigate perceived risk.
But there is an even more overwhelming reason for the managed travel community to take action: travellers, and particularly the Millennial generation, are using them in burgeoning numbers. There will be no relenting. But that’s not a bad thing: it makes this is time of great opportunity.
Of course, change and disruption create obstacles if not managed correctly. But here is a chance to get in early on the evolution of a consumer phenomenon.
The question: how can we make it work to our advantage?
To start, there are two main areas on which to focus. There is the money spent by travellers over which you have no control or visibility at present.
For example, ground transportation has always been a problem area for travel and expense managers. Policy leakage is prevalent, meaning duty of care obligations are seldom fulfilled. And reporting is a messy business. Might companies such as Uber and Hailo, therefore, provide a path towards enhanced cost control and visibility?
You can then look at your current programme; how might a supplier such has Airbnb enable you to reduce the accommodation budget while, at the same time, enhancing the traveller experience.
Travel buyers and managers will only realise these potential benefits if they are willing to do their homework. Talk to travellers, find out what they’re already using and what they want. Talk to suppliers, and find out what they have to offer and how you can work together. Only then can an informed decision be made.
Furthermore, as the resident travel expert in an organisation, you kind of have to know what you’re talking about.