I was glad to see the news
about TripActions recent raise. It is a sign of confidence for our battered
industry. Although we have seen past signs of optimism (and capital) fueling
innovations to digitize the industry and kick-start global mobility, there was
something reassuring and comforting about new money being put specifically towards
Even if we don’t see 2019 figures
again, investors know that business
travel will come back. But one thing is clear – it will be different and they
are betting on that.
The old model is changing. It’s
no longer enough to be a travel company who embraces the use of technology. The industry is also
consolidating as travel management companies take more ownership in technology and many travel tech companies invest in vertical
integration (e.g., agency services, expense management, payments, meetings).
Eventually, this will consolidate
power amongst a few – creating new powerhouses
in the industry. This shift is something that impacts us all.
TMCs have a decision to make. They
can invest, sell or wait. Who wouldn’t want to invest, right? Build or acquire
new technologies to ensure that your company is well positioned for the future.
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Except it’s perhaps the most
challenging time to invest… ever – strapped for cash, resources and possibly
facing the most daunting company transformation (what does it really mean to be a tech company?!), combined with uncertain
timing of future demand. Sure, it can be done, but it’s not easy, and it’s risky!
The safer bet for many is to sell
and we’re seeing that all around us. If you chose neither, by default, you’re
waiting. Those who wait are armed with the knowledge that business travel will
come back and that loyal clients will stick with them during this challenging time.
But if we’re coming back to a
vastly different world, is waiting really an option, or is it simply delaying
the inevitable? How long will those loyal clients be around once travel does
return? Technology innovations continue during this time, and customer
expectations increase, even in
the face of unprecedented complexity. When travel does return, growth leaders
and laggards will be more evident than ever before.
What about “legacy” travel tech
players? Even if it’s not in the cards to tackle travel agency services, they must
double-down on technology and product. Why now? Because competitors who own
both services and technology will be able to innovate faster and cater to
customer demands in ways we haven’t seen before.
As for us startups, our
resiliency is being tested. Above all else, we need to be relevant in the new
The new world is digital, global,
omni-channel, predictive, personal and sustainable. By listening to our
customers, we can recognize the future before others and move faster, more
efficiently and with less capital.
If you can do all of those things you can find ways to bring
value to the ecosystem. It is what we strive for at Tripkicks – to invest in
growth during a time where it’s so easy not to. I know many peers who are doing
the same. Startups who can effectively navigate this environment may be on a
path to becoming one of those new powerhouses, although, it’s more likely they will
be a casualty of consolidation (not necessarily a bad thing!). I am certain
that there is no “waiting” happening in our group.
The industry consolidation, along
with continued investment means that a handful of players will have more
control and ownership over the entire user experience, and we’ll see increased
competition and (finally) more useful differentiation. We no longer have to
wonder what the future will look like. It’s playing out all around us, and I am
excited for change.
Regardless of your role in the
travel industry, if you are part of it, now is the time that you must invest in
the future. Travel suppliers will continue to pursue different growth strategies
(i.e., build, buy or partner) that play to their strengths.
managers are using this time to invest in changes to their programs, and
startups are attempting to defy all odds and grow! We must all change if we
are going to be part of the future, and it’s reassuring to see outside
investors recognizing that opportunity.
Berk is CEO of Tripkicks.