As the likes of Airbnb, Booking.com and others jostle for a slice of the corporate travel market, existing players watch intently from the sidelines.
This is a market that is having to adapt, faced not only with pressure from external entrants, but also rapid technology development, changing traveller behaviour and the shifting distribution landscape.
As chairman and chief executive of Certares and chairman of the board at American Express Global Business Travel, Greg O’Hara is well placed to comment on the sector.
And, comment he did when speaking during the Phocuswright conference in Miami last month on issues from Lufthansa’s distribution cost charge and pressure from online leisure players to open booking.
Lufthansa distribution cost charge
The Germany-based carrier introduced its 16 Euro levy at the beginning of September to a storm of criticism. There have been reports claiming Lufthansa has lost business through agents switch-selling to other carriers but the airline itself maintains its numbers are in line with forecasts.
According to O’Hara, Amex GBT customers have no interest booking through a portal – the alternative channel offered by Lufthansa.
“The people are our largest clients have told us they are not interested in having us or anyone else book through that portal. Let’s say Lufthansa does that and all the other airlines do it too.
“Everybody has a portal and makes you book through it. If it catches on they are asking for every major TMC and travel distributor to build a GDS.
“We think at Amex GBT that is absolutely fantastic, we would love that to be the case because we think we are the only one able to afford to build a GDS. They will turn us into a giant global monopoly.
“They will turn us into the only people who can process a corporate travel booking and then they will learn how to pay.”
Amex GBT is not experiencing any traction with open booking and O’Hara puts it down to practicalities.
“We don’t see it at all at GBT. The reason is not a technology issue. It’s practical economics. If you go book a flight on United Airlines and it somehow needs to be handled or rebooked – about 30% need to be handled by an agent eventually – if we make the booking we feel we can invest in handling those bookings. If we don’t make the booking and it’s transferred as a result of open booking, we’re not interested in handling it.
“What if there’s a snow storm and all the open bookings need to be handled. We have thousands we have invested in, in their livelihood, their training, all over the world, to handle that. It’s difficult for United to start handling call volumes way beyond the norm whereas we move them around the world.”