With travel to the US becoming more difficult and European companies looking to cut back on business travel, trip savings are grabbing headlines. Sally White reports
Astute timing no doubt helped TripActions get away its first major funding. When better for a business travel cost-saving app than the atmosphere of complete panic at what President Donald Trump’s isolationism could do. When that comes just as the global economy looks threatened by Brexit and rising popularism, currencies are volatile, airlines are indicating an end to price cuts, hotel room rates are firming and cheaper alternative travel options are threatened by local regulators. The perfect storm!
In fact, there are mixed views on just what effect the US travel bans are actually having. While there has been disruption, the main damage seems to be coming from the creation of fear and the uncertainty.
Just out from the US-based Association of Corporate Travel Executives is a survey which shows 45% of respondents saying that Trump’s bans would pose travel difficulties for their company. Only 4% of those who responded said the recent developments of the ban caused them to significantly rethink conducting business with the US. Around 17% said they had “somewhat reconsidered business plans”. The majority, 66%, said they would not change plans.
…there are mixed views on just what effect the US travel bans are actually having
Although 91% said their company had not cancelled US meetings in favour of other locations abroad, 9% said they had. And more than 20% of respondents said their travellers had reported recent delays or harassment crossing the US border.
A few weeks earlier, the Global Business Travel Association published a survey carried out among travel professionals in the US and Europe. It found in Europe that nearly half expected their company to reduce business travel over the next three months. Around a third of US respondents said the same. In the event, real numbers, for January 2017 versus December 2016, showed transactions down by as much as 8%.
A look at TUSA system-wide business travel transaction numbers show that they had been increasing by 1.2% in the week before the travel ban. Then they showed a decrease of 2.2% the week after. So, it says, for that week “approximately $185 million in business lost as a result of the uncertainty...”
As GBTA points out, last year 87.3% of US business travel was domestic travel, 12.7% was international travel. “This action had a significant disproportionate impact on international travel,” it says.
Uncertainty had set in, even if the courts seem set (so far) in thwarting Trump’s plans. Yet there were other ways to ensure security, for example by expanding programmes such as the Visa Waiver Programme, which facilitates information sharing among governments. “For every 1% impact on business travel spending annually, the United States gains or loses 71,000 jobs, nearly $5 billion in GDP, $3 billion in wages and $1.2 billion in tax collections,” it finishes.
So, which company is not going to be a bit more relaxed about business travel when it has an app that gives it a grip on cost and whose sales pitch talks of 30% of savings! TripActions’ solution includes a neat idea, which, while not unique in the travel industry (Vis Travelbank and Rockettrip) has helped its marketing by grabbing media headlines!
Taking a sanguine view of human nature the California-based founders came up with TripBucks: a reward to employees for money saved. Based on the idea that “people spend more money when it’s on their company’s dime”, its system offers employees rewards for staying under a target budget. These so-called ‘TripBucks’ can then be exchanged for Amazon gift cards, other merchandise or even trips.
“For every buck that you save as an employee, the company will pay you 30 cents,” said Ariel Cohen, co-founder and CEO of TripActions, talking to the press. “So now you kind of think about the corporate money as if it was your own.”
Recent research by Carlson Wagonlit Travel’s Solutions Group found that corporations could reduce travel over-spend by up to 15% by enforcing existing corporate travel policies. TripActions indicates that its business model goes a few better. Hence its ability to pull in $14.5 million of funding!
Cohen describes TripActions’ platform as offering “fast and easy business and personal trip booking via iPhone and Android apps or via the web and live itinerary with direct access to Uber and Lyft”. There is also “proactive 24/7 US based support via chat, email, and phone. “The back-office settings allow CFOs and travel managers to manage the entire travel program from one place including travel policy customisation and real-time spend and savings information for flights, hotels, and rental cars. It reckons it has strong consumer, direct, and corporate inventories for flights, hotels, and car travellers.
“CFOs and travel managers actually want a good programme for their employees that include a quality booking experience, proactive support on-the-go, with the ability to control and save travel costs. With TripActions, we align motivations of employer and employee to ensure that both come out on top” said Cohen.
Industry comment on TripActions’ Kayak-like platform is that its simplicity should help it take on incumbents like Concur. Started only two years ago, it already has 70 clients, including digital businesses SurveyMonkey and eHarmony.
The funding was led by Oren Zeev of Zeev Ventures with participation from Arif Janmohamed of Lightspeed Venture Partners - two with a history of backing ventures successfully. The $14.5 million will be used to advance TripActions’ platform and expand its presence in the corporate travel industry.