Is Technology Bringing the Perfect Trip Nearer?

Steve Singh has been mulling the concept of the Perfect Trip in business travel for more than 10 years.

The co-founder and former CEO of Concur, which sold to SAP in 2014 for $8.3 billion, believes a trip where a traveler's data is drawn from a single repository and can be shared across all travel suppliers to ensure a smooth and joined up journey is now more possible than ever.

The pieces of the puzzle are falling into place, Singh said, which is why he chose, alongside a group of investors, to acquire Direct Travel earlier this month.

“I think there's two drivers. The first is really the big transformational changes that are happening in the technology industry," Singh said. "We started off in the era of on-premise software, and back then software was all built internally, in a closed environment, deeply integrated, but nobody was best in breed in anything. Then SAAS (software-as-a-service) came along, and besides the fact that you could integrate more than in the on-premise world, the real benefit was that the risk was shared a little bit more between the customer and vendor.”

Startup investments

The onset of SAAS, alongside the move to cloud native architectures, has led to three significant changes, Singh added.

“The first is that you can move to purely consumption model approaches where the entire risk of the economic relationship sits with the vendor, frankly where it belongs. I think that that's a huge shift, what you're seeing with AWS (Amazon Web Services), you're seeing with Snowflake and so many more companies now. It's purely a consumption model. The second shift, is that done right, these are completely open architectures, which means that if you as an independent software developer wanted to increase the value of other solutions that are cloud native architectures you could.”

This is where Singh’s investments in travel startups, including Spotnana, Troop and Center, independently or through Madrona Venture Group, come into the equation. Direct Travel is currently integrating Spotnana’s technology stack, Center’s expense management solution and Troop’s meetings and group travel planning platform.

The third change according to Singh is artificial intelligence.

“This is the first shift in technology platform that has really enabled artificial intelligence. There's machine learning, and we've been innovating on that for years. Both an open architecture that's componentized or microservices architecture that is componentized that you can actually integrate AI into each layer of the stack, there’s so many things you can do with AI that really enable solutions that just weren't possible in the past.”

While SAAS and cloud native architecture have helped new players, AI means “equal opportunity for everyone, including legacy players,” Singh said.

“In fact, I would argue they may even have an advantage because they're sitting on data. Think about it: Direct Travel is sitting on billions of dollars, tens of billions of travel data. So what they can do with AI is fascinating, learning our behaviors, learning how to interact with us in a natural language through conversation versus an application.”

And data, but more specifically the ability to integrate data from disparate sources more easily, is the second element to why Singh felt now is the time to advance the perfect trip and his decision to acquire Direct Travel.

“When we started seeing cloud native and open architectures take off, we started investing in technologies that were reinventing huge chunks of the travel industry. What's really interesting about these tools is that they're completely open architectures and can integrate together.”

The end result should be a single platform with centralized data, online booking services, expense management and meetings and group travel planning capabilities backed up by the service and experience of an established travel management company (TMC).

“Our view was if a modern TMC is going to embrace this, we think we can actually accelerate that change by acquiring a fantastic TMC in the space, growing it on top of this new stack and differentiating compared to any other TMC in the marketplace.”

Technology priorities

It’s clear that many in the corporate travel landscape are thinking along similar lines. Much of the detail around American Express Global Business Travel's plan to acquire CWT also points in the same direction - a better traveler booking and in-journey experience by combining tech and people.

A recent study from Amadeus highlighting business travel technology investment trends revealed improving the user experience (65%), innovation (59%), revenue increases (55%) and margin improvement (51%) as the main objectives around increased technology investment in 2024.

Respondents viewed providing a full end-to-end trip as one of the main technology challenges they face alongside concerns around diversifying business models to maximize revenue and helping travelers make sustainable choices.

And the technologies they cited as most important in the coming year are machine learning (42%), data analytics (41%) and generative AI (40%).

It’s hard to assess whether Direct Travel, with the integration of newer technologies, can get ahead of the pack. It’s a $300 million-plus business, is profitable and growing at about 10% a year, according to Singh. But under the new ownership and structure, it could grow at a greater rate and “win more than our fair share of the market.”

Let's talk

One further piece to the creation of a perfect trip where all the individual elements of air, hotel and ground transportation are joined up from booking to on-trip, and even in a disruption, is a conversational interface. Singh said an investment has already been made in a company providing the technology that sits on top of Spotnana and Center, to enable travelers to talk to their application and have the technology do the work in the background.

“One thing you'll be able to do is speak what you want and say, 'Hey, I'd like to book a trip to Boston and I need to arrive two hours before dinner.' The artificial intelligence should be able to look at my calendar and know what time that dinner meeting is, know what time I need to arrive there, integrate with Spotnana to book the appropriate trip that gets me there on time, book the car service from the airport to the restaurant or to the hotel to drop me off and let me check me in. So there'll be a conversational interface into travel that’s going to accelerate how easy it is to use travel services.”

With GBTA figures showing business travel is expected to exceed pre-pandemic spend of $1.4 trillion this year and increase to $1.8 trillion by 2027 and advances in technology such as cloud and AI, what might challenge the march toward the perfect trip?

“The challenges are the same that you see in every industry as it goes through transformation," Singh said. "The legacy players will always resist change because it's disruptive to their business model. Other than that, the challenges are the same. The challenge we always have is execution, getting up, doing the job, to be better tomorrow than we were today, but that is a normal part of growing a business.”

This article originally appeared on PhocusWire.