Booking and expense management tool provider KDS plans to scale down investment in its open booking management products Maverick and Flex T&E in favor of its pioneering door-to-door reservations tool Neo, CEO Dean Forbes told The Beat. Describing the concept of open booking as "failure dressed up as innovation," Forbes said KDS will emphasize Neo because he is confident it can sufficiently deter travelers from using alternative, unofficial booking channels.
Forbes also disclosed details about a worldwide reseller agreement with Carlson Wagonlit Travel announced in August. He said work is underway to produce a "CWT-flavored" version of Neo, with the goal of achieving for France-based KDS mass acceptance in the United States following years of limited progress.
CWT senior vice president for global marketing Nick Vournakis told The Beat that he regards the tool as a "game changer."
KDS offers two tools to help travel managers accommodate travelers who attempt to book trips via public websites. A custom version of technology from U.S.-based ProcureApp, Maverick encourages travelers to rebook through their official online reservations tool, while T&E Flex collects data from the rogue booking if the traveler persists in using an unauthorized channel.
"We did Maverick and Flex T&E because bookings will continue to happen outside corporate tools, but our strategy is moving away from these products because we are investing in Neo," Forbes explained. Neo almost instantaneously provides travelers with policy-compliant itinerary options after they punch in just three pieces of information: where they will start their journey, where they are going and what time they need to be there.
Forbes believes the underlying philosophy of open booking or "Managed Travel 2.0" theories—that younger travelers overwhelmingly want to book independently—has a weak foundation and addresses the wrong target. "It has been cleverly marketed," he said. "It is failure dressed up as innovation because not enough of the online booking tools are doing a good job of aggregating content at the point of sale. Instead, it is saying, 'Let's get the traveler to do all the work and then we'll aggregate after the event.' "
Forbes contends that although younger travelers like to research trips online, they generally check a very limited number of aggregator sites, such as Kayak. "No right-minded traveler is going to want to waste their time on dot-com sites," he said. "We're dealing with companies with 20,000 travelers, and in the course of a year only 200, 300 or perhaps 400 might stray beyond their managed program."
Given that KDS offers tools to manage those who do stray, does this mean Forbes has shifted his position on open booking? Probably not, since his early thinking on the Neo concept, shared back in February 2012 during his company's global customer conference, was that "this kind of user interaction will stop travelers from looking outside the travel program to consumer websites."
The idea, he said this month, was to "cover all the options. What has changed is that we see senior management and travelers respond to Neo as a tool travelers can really rely on." Forbes claimed that since switching to Neo from another provider's booking tool, one customer's hotel attachment rate to air bookings jumped to 48 percent from 8 percent.
Inroads In The United States
Turning to the recent deal with CWT, Forbes said Neo customization likely would include integration with the travel management company's hotel program, mobile products and back-office systems.
"CWT is the first TMC to have resale rights for Neo," he continued. "We were very reluctant to allow any TMC to resell Neo because we didn't want them to put us in a kit bag alongside other tools. This deal gives us a level of distribution we wouldn't be able to secure by ourselves. There is an incumbent provider in the U.S. with very good marketing, and it would be hard for us to compete unless we put hundreds of people on the ground." However, Forbes noted that KDS is recruiting in the United States for personnel to support an anticipated surge in business through CWT.
CWT's Vournakis characterized the expanded KDS partnership as a change in "scale and scope" and said he hopes the TMC in early 2014 will launch the custom version of Neo.
Although Vournakis stressed that Neo is not the only online booking game in town—and that CWT would continue reselling other systems—he made no attempt to hide his enthusiasm for the product. "It is a game changer with regard to user experience, but in a way that is aligned to corporate objectives," he said. "It capitalizes on the emerging trend of consumerization. Corporate travelers want that what they do in their personal lives shouldn't be different from what they do at work, and this user experience gets down to four clicks of a button. Our intention is that we want to actively promote Neo as an alternative in a market where it is relatively unknown. But it may not be a fit for every client in every circumstance."
Vournakis added that integration work currently is focused on synching with global distribution systems and ensuring Neo content is sufficient for the North American market. Asked if Neo is as effective a tool in North America as in Europe, he said: "It's getting there. There are still some content challenges to be solved, but they are being solved."
CWT for many years has owned a small slice of KDS, currently standing at 3 percent. Given industry speculation about potential vertically integrated mergers between major TMCs and travel technology companies, a combination between CWT and KDS may be a natural fit. But Forbes said KDS is "not for sale."