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BTN and the Business Travel Loop

BTN and the Business Travel Loop



By 1998, both corporate travel agent and airline reservationist, two categories of booking agents, were considered "bridged," "bypassed," "disintermediated," not needed any longer in business travel. A new technology had been invented, which I shall call the "automated travel system" or ATS, that did their work better and cheaper. In the minds of the movers and shakers of the corporate travel world, if not in actual employment figures, corporate reservationists, in travel agency or airline, were gone as workers and as an occupational group. The entire conceptual shift described in these pages happened between 1996 and 1998. One could have followed it in a number of business travel journals; I chose to follow it in the pages of Business Travel News.

A magazine like BTN offers contemporaries one of the best windows into today's industrial events. It was deemed the voice of the American corporate travel industry. In its pages during this period, the mention that is made of the corporate travel agent is predominantly to predict his or her demise. Overwhelmingly, the discussion centers around the new tools that computer-based technology offers the corporation. It was an exciting time for those who prospered. Said Kevin Mitchell, president of Business Travel Contractors Corporation: "Over the past three years ... fee- based agency pricing became fashionable; net fares, all the rage; fresh ideas surfaced with new technology entrants; Internet, intranet, and extranet entered the lexicon; and technology associations, newsletters, and conferences proliferated." (1)

In the corporate travel sector, apart from the business press, four key players wrestled with the sea of change that resulted from technology's incursions:

1. The booking agent

The travel agent was one of the first to wrestle with complicated databases to research fares and book reservations. Travel agents were carrying out sophisticated online operations on computers, online, when most of the rest of us were wrestling with primitive word processors. The airlines, cruise ship lines, tour companies, hotels, and car rental firms they dealt with were awash in a sea of constantly-changing data, and the travel agent needed to be apprized of all of it.

The travel agency serves both vacation and corporate travelers. Some agencies mostly book vacation; others mostly corporate. Those that book mostly vacation will be far less affected by what is discussed in these pages. During this short period, technology and falling commissions combined to displace the corporate agent from his or her traditional middleman position in corporate booking. Left without revenue and replaced by software, the travel agency that did a lot of corporate bookings struggled to see its future.

The agent's closest counterpart was the airline reservationist, employed at downtown offices and the airport. Though they booked reservations and issued tickets, the rest of their work was different from the agent. They neither researched fares or other aspects of travel to the extent the agent did nor did they take care of special services. The airline showed itself interested in dooming its own employees by linking up with the corporate traveler, booking online, issuing e-tickets, and creating automated curbside kiosks for baggage drops.

Since its executioner was also its employer, one can imagine that very little was heard from the reservationists in the pages of the trade press. Their situation was different for corporate travel agents, who were defended by their employer, the independent agency, whose operations were threatened by automation. The airline reservationists seemed fated to go down without a voice raised in their defense. Precisely because scarce mention is made of them, I wish to draw attention to their plight here.

2. The corporation

The corporate travel manager is the gatekeeper (middleman?) between the corporate travel customer and the corporate travel agency and between both and senior management. Senior management entrusted the travel manager with the task of keeping travel safe and reliable, honest and inexpensive. When the contract for lifetime job security collapsed in North America, nothing could have been better for a non-revenue generator than to have a stunning way of cutting costs. ATSs provided that welcome tool. Automation solved many problems for travel managers during this period and so they switched allegiance from travel agent to travel software. Like the airlines, corporate travel managers and the travelers they served were leading travel technology boosters.

3. Technology vendors

Another group of travel-technology boosters were the technology vendors. They sold old and new systems. The vendors of old technology sold the computer reservations systems (CRSs) like Sabre, Apollo, and Amadeus that travel agents have been using for years to research fares and book reservations. The CRSs were sired by the airlines, who continue to look upon them as children that need protecting. CRS databases underlie many of the newer ATSs, as one among a number of travel-information databases accessible through them.

The vendors of the new technology are the makers of the ATSs; they are the new kids on the block. The ATSs are windowized and operate online, taking advantage of sometimes more advanced technology than the older CRS who are regarded as having imperiously fallen behind the times. They "interface" with the CRSs. As I understand it, the CRSs are the engines underneath most of them. The ATSs moved with the frontier from Internet to intranet to extranet -- from a worldwide online network, to a secure in-house site, to a secure, direct link between buyer and seller. Their products were easy to learn; they sped up travel research and booking; and they tied in to adjacent technologies like "smart cards," which we shall have reason to look at later. Like medical-inventory packages or process-control systems, they grew to take in more and more functionality. Many groups began designing them from start-up technology companies and software giants, to computer-services firms and even mega-travel-agencies. This group had little native loyalty to airline or CRS. Like the airlines, its loyalty was to their customer -- the travel manager and the corporate traveler.

4. Travel suppliers

Although the airlines were only one among the suppliers of travel services, they were the trend- setters. The airlines merged and the car rental firms followed. The airlines cut commissions and the hotels followed. As a result of time constraints, I have restricted my attention here to the agent's relations with the airlines only.

Once numerous, since deregulation, the number of airlines has declined as companies partner and merge. Many discount airlines have shut down. Some giants have dropped by the wayside. More were injured in the "shoot-em-up" wars of the go-go Eighties. The ones who remain are aware of their power. They spring into action to protect investments like their CRSs. By reducing online commissions for any ATS but their own and upping online booking fees through their CRSs, they effectively put many of their competitors, the nascent ATS vendors, out of business.

By 1998, the "extranet," which airlines and travel manager labored hard to create, offered a direct link, via the World Wide Web, between buyer and seller. I would imagine that the achievement of a direct link would have been like a Holy Grail to the airlines. It was better than focused advertising or any other sales-incentive program. It tied the buyer directly to the seller, giving an incredible competitive advantage to travel suppliers.

Not surprisingly, then, the airlines were travel technology boosters during the period. Automation was good for them. In their eyes, the corporate agent (and perhaps their own booking agents) became non-performing, non-value-adding, redundant middlemen. "Direct links" spelled their end as a go-between. So it is at this point that one can say that corporate travel agents had met their software replacement; i.e., that they had been bridged, bypassed, or "automated." If they will survive in some adapted form, I know not. But once the corporation and the airline were doing business together in a closed loop, the corporate travel agency was effectively eliminated as a middleman.


(1) Kevin P. Mitchell, "Distribution Reform Stalls," BTN, 9 June 1996, 10.