As we reflect on the year 2014, the corporate travel industry experienced seismic shifts that continue to influence the sector today. From mergers to the rise of disruptive technologies, the events of that year set the stage for significant transformations within the industry.
IBM’s Strategic Shift: Closing GERS and Partnering with Concur
In a bold move, IBM decided to shutter its Global Expense Reporting Solution (GERS), acknowledging the overwhelming competition from Concur, a leader in expense reporting solutions. The closure of GERS not only marked the end of IBM’s journey in this space but also led the company to form a strategic partnership with Concur. This partnership aimed to retain some of its business process outsourcing clients, as reported by BTN.
Shortly thereafter, Concur itself underwent a monumental change when SAP acquired it for $8.3 billion. This acquisition raised questions about how SAP would support Concur’s TripLink strategy, which had garnered significant attention. Contrary to skeptics’ expectations, Concur remained committed to its innovative approach, integrating its first partner hotel, IHG, while securing a commitment from United Airlines to enhance its travel offerings.
TMCs Embrace Technology Amid Market Pressures
As Concur expanded, travel management companies (TMCs) recognized the necessity of adopting technological advancements to remain competitive. David Radcliff, then-CEO of U.K.-based TMC Hogg Robinson Group (HRG), was among the prominent voices advocating for TMCs to develop their own technology platforms rather than merely acting as integrators. However, HRG’s struggles led to its placement on the market in 2018, raising questions about whether the company had the financial resources to realize its technological ambitions.
In a decisive move, American Express announced a joint venture with private equity firm Certares, effectively spinning off its business travel division. Certares invested $900 million into what became American Express Global Business Travel (GBT). This capital allowed GBT to acquire HRG and expand further through various technology acquisitions, including the purchase of Egencia in 2022.
The Rise of the Sharing Economy: Uber and Airbnb
Despite the high-profile mergers and acquisitions, the headline of 2014 belonged to the sharing economy, spearheaded by companies like Uber and Airbnb. These platforms revolutionized travel by offering accessible, often cheaper alternatives to traditional services. Initially viewed as a disruptive nuisance within corporate travel, Uber and Airbnb rapidly gained traction, appealing to travelers for their convenience and affordability.
Reports indicated that even as travel managers crafted policies against using these sharing economy providers—concerned about safety and regulatory issues—many professionals were utilizing these apps during conferences, drawn by their ease of use. The digital experience offered by these platforms fostered a sense of control and personalized service that business travelers craved.
However, as both companies worked toward IPOs, they faced increasing operational costs due to compliance with regulations, ultimately affecting their pricing models. Despite the rising costs, the integrated wallet features and receipt capture capabilities provided by these apps became integral to the frictionless travel experience sought after by corporate travelers.
January Developments: Corporate Bundles and Leadership Changes
The year kicked off with Delta Air Lines’ chief revenue officer Glenn Hauenstein discussing the concept of “corporate bundles” at an investor presentation, envisioning a future where corporations could negotiate tailored amenities for their employees. In another significant collaboration, Delta and Virgin Atlantic launched a joint venture that regionalized their sales strategies.
In leadership changes, Bill Glenn took over as president and CEO of American Express Global Business Travel, replacing Kim Goodman amid Certares’ plans for GBT’s spin-off. Meanwhile, Kevin O’Malley was set to lead Travel and Transport as Bill Tech prepared for retirement, signaling shifts in executive leadership across the sector.
Christopherson Travel made headlines with its acquisition of Alabama-based All Seasons Travel, positioning the company for substantial growth in sales throughout 2015.
February Updates: New Technologies and Market Strategies
February saw United Airlines planning a return of its Economy Plus fares to major global distribution systems after a two-year absence, alongside payment provider Conferma’s announcement regarding a virtual app to generate card numbers for travel payments.
American Airlines cut services from LaGuardia to several cities as part of a slot divestiture mandated by the Department of Justice following its merger with US Airways. This reduction was complemented by Duetto’s push to help hotels devise corporate rate strategies based on forward-looking data.
Februaries were also marked by notable acquisitions, such as New Zealand-based Serko buying Australian expense management company Incharge.
BCD Travel introduced its TripSource app for iPhone users, offering comprehensive travel management tools for free to Canadian and U.S. users. Marriott International’s acquisition of South African hotel company Protea Hospitality for $186 million exemplified the ongoing expansion within the hospitality sector.
March Movements: Mergers and Revenue Challenges
In March, JetBlue and Southwest Airlines acquired slots at New York LaGuardia previously shed by American Airlines, while Blackstone-owned La Quinta filed for an IPO. Major agencies like American Express Business Travel and Carlson Wagonlit Travel started developing programs to reward client booking choices to enhance employee engagement.
Carlson Wagonlit attributed its sales decline to the U.S. government’s sequester, emphasizing how external factors continued to impact travel management companies. CWT’s CEO Doug Anderson highlighted the company’s evolving strategy, rooted in technology investments following its acquisition of WorldMate.
United Airlines’ announcement about significant operational cuts at its Cleveland hub further underscored the volatile nature of the airline industry in 2014.
April Innovations: Launches and Strategic Initiatives
April brought multiple innovations, including Lufthansa’s announcement of a premium economy class launch set for November 2014. At the Business Travel Show in London, discussions focused on managing unofficial travel communities using platforms like Yammer.
NuTravel began creating a new central technology platform for integration, while United Airlines issued warnings to corporate accounts that failed to meet negotiated commitments. Delta Air Lines capitalized on its first-mover advantage, achieving revenue growth by prioritizing client needs amidst a changing landscape.
Cvent announced its intention to boost investments in mobile and other meeting technologies as the demand for mobile solutions surged in the industry.
May Developments: Industry Expansions and Investigations
As the months progressed into May, Orbitz for Business signed a notable agreement with IBM to provide an online booking tool until 2020. Meanwhile, the European Commission initiated investigations into non-EU airlines’ holdings in EU-based carriers.
GBTA established four European committees addressing aviation, hotels, meetings, and technology, showcasing increased efforts to standardize and improve corporate travel practices across the continent. Four out of ten U.S. travelers gained access to expedited airport security lanes due to the TSA’s PreCheck program, highlighting an emphasis on streamlining travel experiences.
BCD Travel’s new CEO John Snyder focused on global expansion and improving technology efforts such as enhancing hotel attachment rates.
June Developments: Partnerships and Compliance Issues
June saw Concur aiming to onboard IBM’s Global Expense Reporting Solutions clients onto its platform, as the tech giant ended GERS operations. Simultaneously, the U.S. Department of Transportation approved Resolution 787, a major initiative proposed by IATA for its New Distribution Capability.
Adelman Travel planned to transition its corporate travel division into a comprehensive management solutions company, emphasizing consulting and innovative technologies. Avis Budget Group reported a 2 percent year-over-year increase in commercial rental rates for Q1 2014, reflecting shifting customer dynamics within the travel marketplace.
Hilton introduced its Curio brand, a collection of independent upper-tier hotels, to compete with similar offerings from competitors like Marriott.
July Changes: Joint Ventures and Integration Strategies
In July, American Express Global Business Travel finalized its joint venture with Certares, bringing in additional executives to its leadership team. This investment group secured a $900 million stake, further solidifying AmexGBT’s position in the market.
United Airlines became the first airline to publicly commit to integrating with Concur TripLink, although full rollout timelines suggested significant delays ahead. Carlson Wagonlit Travel reassured clients that its acquisition by Carlson Companies would not impact pricing structures, despite prevalent concerns.
Amidst expanding international collaborations, Cvent shared plans to redesign its event-planning platform to enhance user experience and navigation.
August Collaborations: Technological Advancements and Consumer Engagement
August witnessed JetBlue collaborating with e-commerce provider Datalex to launch a fare bundle phase, potentially introducing new fees for travelers. Additionally, Amadeus and United Airlines worked together on deploying merchandising strategies under the New Distribution Capability framework.
Hilton Worldwide announced plans for digital door locks in many of its U.S. hotels, allowing guests to check-in digitally. AmexGBT introduced near real-time card swipe tracking to address traveler safety and connectivity concerns during crises.
Deem, formerly Rearden Commerce, secured funding to focus on its travel and expense tools, aiming to reshape its offerings in the competitive market.
September Updates: Mergers, Funding, and Consumer Advocacy
In September, SAP completed its $8.3 billion acquisition of Concur, prompting industry questions surrounding customer service and integration challenges with the Open Booking model. Mobile meetings app DoubleDutch secured $19 million in funding to expand its global footprint and enhance product capabilities.
Senator John D. Rockefeller IV opened an investigation into U.S. carriers regarding their disclosure of ancillary fees and consumer data protection practices. Meanwhile, research from Cornell University revealed that LEED-certified hotels outperformed their non-certified counterparts in occupancy rates and revenue per available room.
Delta’s Edge program introduced self-service web portals for corporate clients to manage airline relationships and reports efficiently.
October Progress: Innovative Solutions and New Market Opportunities
October saw Carlson Wagonlit Travel piloting hotel booking through its CWT To Go app, which was expected to be widely available by year-end. The U.S. General Services Administration inaugurated a car-sharing program involving multiple rental companies.
AirPlus International disclosed plans to invest up to $10 million annually in data quality and analytics, further enhancing the payment solutions available to business travelers. In partnership with Conferma, CWT launched a single-use virtual card program designed to streamline specific travel expense payments.
Technology provider Conferma also rolled out its TripPay app, allowing seamless hotel booking transactions.
December Developments: Acquisitions and Industry Reactions
By December, Australia’s Corporate Travel Management marked its entry into Europe with a $36.9 million acquisition of Chambers Travel, while simultaneously completing a U.S. acquisition worth $7.5 million.
JetBlue announced new fare structures that included bag fees and dynamic pricing models. Airbnb positioned itself at the Global Business Travel Association conference by proclaiming it wasn’t intended for road warriors, countering criticism over corporate availability.
The GBTA’s Europe conference culminated in the Berlin Charter, which called for airlines to consider corporate travel clients in their New Distribution Capability developments.
Throughout the year, KDS’s CEO noted that the SAP-Concur acquisition might have little impact on his company, reflecting ongoing competition in the expense management sector.
Marking the industry’s evolution, Concur’s Mike Koetting outlined his vision for “The TMC of the Future,” highlighting the importance of integrating applications and information to enhance mobile-oriented service advancements.
The events of 2014 left an indelible mark on corporate travel, shaping the way organizations navigate complexities while adapting to new industry standards and technologies.
