[Q&A] 2022 and Beyond: Our Vision and Predictions of Where Travel is Going

On December 8th 2021, Grasp Technologies wrapped up the year with a lively discussion on what the future holds and how TMCs, Travel Managers, and suppliers can chart their course as we look ahead.

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Rick George: The first question will be for the both of you. So lets start with Erik. What has been your biggest "a-ha" moment? That one "a-ha" moment for you over these last 16 months through COVID.

Erik Mueller: The biggest thing for me is just change. I love change, I hate it when things stay the same. And the travel industry never disappoints. So the big "a-ha" for me is just that there's been a lot of change and I think it is ultimately for the good. We've all struggled, but I think we always come out of these things stronger. So the big thing is, I see a lot of improvements in the industry.

Rick George: And Dave, how about for you? What was the biggest "a-ha" moment for you?

Dave Lukas: Let's just say the more things change, the more they stay the same, in some ways. The thing I really took away from these last 16 months is how important it is to play the long game.

Everything essentially just stopped over a weekend. And when that all happened, we didn't panic. We knew that at least this would be a great opportunity at Grasp to work on improvement internally, in our product roadmap. We also knew it'd be important to take care of our clients and be there for them as best as we could. And so for us to do that, while keeping focus on our growth and keeping all of our teams; That was our most important focus during that time.

It seems that we have a shock like this, to the travel ecosystem, every 10 years or so, but travel always bounces back stronger than it was before. So playing the long game, focusing on readying your business for that turnaround, so that you can reap the benefits. The biggest "a-ha" moment for me was seeing how much that idea is proven.

Rick George: There has definitely been challenges we have all faced and that companies have faced, but there has also been a lot of new ideas born during this time. There are new companies that have developed during this time. So it really seems to be cyclical. Looking at every issue that has happened, from SARS to 9/11, and now to this; There is always good that comes out of these challenges.

Next question is for Erik. The three of us were actually at the GBTA convention a few weeks ago. One of the key topics was sustainability, and questions around sustainability. There has certainly been an increase in companies taking sustainability into their Travel Programs. So the question is, in our world of travel data, what does sustainability mean to you, and the overall reporting around sustainability?

Erik Mueller: In talking with a lot of major corporations at GBTA, they seem extremely serious about the sustainability initiatives they have going on and their need for this type of data.

What I have been hearing is that Air Data is fairly readily accessible and hotel is going to continue to be a challenge. Another thing that I've heard, and it speaks to the importance of this, is that a lot of senior leadership's comp. is going to be tied to sustainability and improving their organization's performance.

So I like seeing that it's actually going to have some teeth behind it. I think we're going to see some significant improvements.

Rick George: Another one of the key topics at GBTA was around the evolving role of the TMC (Travel Management Company), and the challenges that have come to many. But there's also been some great opportunities that have come to TMCs. And so my question to Dave is, how do you see the TMCs roll now, and also into the future?

Dave Lukas: There are a lot of ways you can go with that question. I'll focus on more of a narrow lane. The TMC can and should play a much bigger role with their clients. They're really in a great position to be a holistic provider of services, but they have to think outside of the "travel management" piece of it.

TMCs should be data aggregators for their clients. They have one big piece of the data, but they don't have all of it. And typically, they cannot see the whole picture. They don't see everything that is expensed, done on credit card or booked as independent bookings. But they have the ability. They can work with data partners like us, or any of the others that do this, in this space. They can bring all that data together into one place, where they can see the true picture of their corporate travel program and ultimately, be of better help to their clients.

In fact, a lot of people probably saw back in November, that we did an announcement where we partnered with Traxo. We partnered and integrated with Traxo because they can give us that open booking, that outside booking information in real time. You don't get it 30 or 60 days later on an Expense Report. At that point, you can't do much with it. You have the information, but you can't proactively do duty of care or help manage somebody in transit. That was an important thing for us in the future. We want to be able to have that capability for our clients because it's going to be that much more important.

And the other side of it was the average corporate client has 49% hotel leakage and almost 10% air leakage. That's from our data that we ran stats over four years on. I was shocked by that. So there's a lot of things happening outside of the TMC that they could actually be capturing and seeing. Now that doesn't mean that they have to change that behavior if it's working. But it does mean that they know about it, right? These are opportunities to make sure your clients are maximizing their program spend or savings and more importantly, duty of care. You want to help ensure that and to be in a position to help when something goes wrong. You can't do that with data from an expense report 60 days later. So there's TMCs that are doing this now and they should, and more should do that as well.

So, kind of the what I said before, play the long game and as a TMC, set yourself up for better success by really becoming a data aggregator in addition to the travel services they provide.

Rick George: In my opinion, Grasp has been incredible because we've survived SARS, we've survived 9/11, and we're doing well through COVID. But there's been a lot of challenge, and certainly still in the travel industry. But we've gotten through it and both of you are great leaders in the company.

So to Erik, the question is, what can you say to business owners, business leaders, travel managers, folks in procurement that are listening today about managing through periods of uncertainty while also addressing employee's concerns and keeping them involved when everybody was remote. What can you say?

Erik Mueller: The three biggest things that I think we've gotten right over the years is managing cash flow, managing hiring, and managing growth. That's the secret to the long game, as Dave said. We've always focused on managing our cash flow very tightly and making sure that there were always cash reserves. So when things do go sideways, we're not struggling or having to be reactive. We can be more proactive. If you hire, hire slow and hire the right people. I think that everything else takes care of itself.

With managing growth, there have been times when we have our growth and it seems like it would have outpaced our cash flow. So how do you slow down when things are good? It seems counterproductive, but we've done that when things are really active. Sometimes we take a step back and we catch our breath. We say, "There is a lot of opportunity right now but we're not going to go after it and instead, we're going to focus on process, focus on our people, and focus on technology." This is especially true for a time like this when things have been slow.

So we just redirected our energies toward getting out of the day-to-day and focusing on internal things. Employee growth is a big thing for us. Through everything over the last 16 months , we've kept our whole team. A majority of our teams have been with us more than 10 years and almost all of them have at least 20 years in the industry. They're not fazed by the ups and downs. It's kind of like, "Oh, here we go again". 

We never know what the outcome is going to be. But we always know we're going to be on the other side of it. We try to not worry so much in the moment.

Rick George: Before COVID, we had a lot of folks that were working in our San Diego office and in our Columbus office.  But there were a lot of folks like me and Dave that were more or less remote. But then all of a sudden, everybody went remote. Erik immediately put together an all-company call every week, It was totally optional, people could join if they wanted. Topics were open and it was just a great way to bring the entire company together.

Next question to Dave. Private equity, mergers, and acquisitions have been a major part of the last year and a half. There has been a lot of agency acquisitions and sadly, some agencies are not with us anymore. But I think the positive side is that there has been cash that's been infused from a variety of different points into the industry. 

With all this volatility in the travel industry, do you believe this is positive or negative in our space?

Dave Lukas: It can really be either, depending on how it's used. Any business or industry throwing good money after bad opportunities or creating high valuations for unproven solutions, doesn't usually work out. Conversely, investing in well-run companies that have experienced management teams, proven business models that can sustain cash flow, is a great opportunity, Those things exist here and I think that's one of the reasons that we do see private equity coming in. As an investor, you always here, "Buy low, sell high". At some point, if an industry is beaten up some, it's a great time to look at getting in on the ground flow and riding that wave up. And because we are just starting to ride that wave up, I think we're seeing some of that now because people are smart and they see an opportunity to invest here.

Rick George: One topic that has been around for a few years and is continuing to grow in our technology space, is around automation and machine learning. 

Erik, what are the the benefits of machine learning or AI to a TMC or to an Enterprise Corporate Account? And where do you see AI in 2 to 3 years from where we are at today?

Erik Mueller: People have been talking about it for a long time and it hasn't really materialized. Everyone says that they have it but, a lot of times when they say "AI", they're really talking about "Machine Learning". Some time, they're just talking about traditional programming methodologies.

But it is finally becoming more of a reality. With the compression that has occurred in the industry, a lot of new players are coming into the marketplace tat are actually using true "AI". It incorporates with machine learning to look at the data, to take action on that data and do things that maybe a person might have had to do before.

To put it lightly, there hasn't been a live cash flow in our industry during the past year. So companies have had to reduce headcount and they focus more on technology. That's been a part of what's helped us to weather the storm as well as we have. People have turned to us to look for ways of automating their processes and procedures. They want to learn more about how they can implement these types of practices into their business. I'm seeing a lot of the new entrances into the marketplace, such as online travel agencies and software platforms, that are using a lot of this technology to basically do the low level work.

I speak with some of our competitors and they've implemented some really cool technology to do things that might have been manual before or were kind of "old school programming". They're now replacing them with things that can learn, evolve, grow, and get better. That's really exciting. We're going to see more of that and I think we're all going to be a lot leaner as we go into the future. 

Rick George: We're seeing companies right now that are either completing their 2022 budgets and getting approval for new technology, or they will be doing that in the next 30 or 35 days. But we are also seeing companies that are taking a, "Wait and see" attitude towards adopting new technology.

Dave, from a sales perspective, what do you think of the, "Wait and see" attitude?

Dave Lukas: Well, it's not an easy answer. Every company is different, their processes for making decisions and spending money are different. And it's always changing. It's even changing by the day or the month in some cases. For many, the process is the process, there's nothing much you can do about it. 

In business, we want to be confident when we plan and budget for the future. That's a little harder when we have periods uncertainty that happen every so often. And so what I will say is that, things are going get busier and they're going to require more effort from the travel department.

This is a great time to implement solutions and to get them set up so that you're ready to go as travel further increases. The last thing most people want to do is implement new solutions when they're drinking from a firehose. Look at every time we've had a crisis in the past and what happens in the ensuing years. It's always bounced back bigger. So now is a great time to get yourself ready. So if you can do it, do it.

Rick George: Next question is to Erik. GBTA convention opened a couple weeks ago and one of the early topics on the main stage was that Business Travel is returning and will continue to increase to pre-COVID levels by 2024. Do you believe that's accurate?

Erik Mueller: I think it is. I'm the "ominous numbers guy", but a lot of economists have crunched the numbers, they've looked at historical things and that is what the data says. So I'd agree that that's most likely true.

I just don't think that things are going to race back. And what we're seeing right now in our numbers is every time that there's a surge, or whatever, we see immediate drop off. But the nice thing that I do see in these numbers is that the bounce back keeps getting quicker. After each little surge, we start getting more used to this. So our recovery time is much shorter. We're now used to a surge and so we put in processes in order to adapt. For example, I think the "virtual thing" is here to stay,

In regards to sustainability, travel is damaging to the environment. There's no way to avoid that reality. So I think that for them to accomplish their goals, reduction in capacity should be suppressed. If they want to meet those sustainability goals, offsets and things like that don't really impact as much as reducing the amount of carbon produced. 

So, I think things will continue to improve and I think that things will come back faster. I just don't know if they're going to return to prior levels for a while. But I think that we'll find a new normal.

Rick George: Dave, over the past few years, we've started to pivot within Grasp to become more of a "data plumber" for the travel industry. And for some on this call, that may be a completely new term.

So my question to you is, what should that mean to the individuals that are listening to us and in terms of where Grasp is going?

Dave Lukas: I'd have to disagree a little bit. I wouldn't say that we "pivoted", I think we've always been focused on the plumbing. If you can't get the data right on the back end, it does no good on the front end. If your data is not good, and you're trying to make decisions off of it, it doesn't do you any good. So I just think a lot of the industry has kind of finally caught up to understanding how important that piece of it is.

That has resulted in a lot of opportunity in business for us in different sectors. One thing that I think we have done is really focus on creating products that take advantage of our capabilities around the data. What we really want it to help our clients run their business better by using data to drive measurable ROI.

You mentioned it earlier and I think now is a good time to talk about it. We're working on some things for TMCs right now. If you're a TMC, you probably haven't heard this yet, because literally just this week, we released our new Grasp Hotel Revenue Optimization product, called GraspHOPR. It's a solution designed to help TMCs capture more revenue and to get paid faster commissions from their hotel bookings. We have the data, we know which hotels pay most of the time and which ones pay commissions the most. It gives clients a full analytics dashboard with reporting on what's happening in real time and it doesn't cos a ton to do this stuff. We're actually doing a special release on this thing with free setup for 150 bucks a month. So it pays for itself in just a couple commission checks.

I think products like GraspHOPR are what you're going to see more of from Grasp. We've perfected the plumbing at this point and now it's about maximizing the possibilities of the data.

Rick George: The final question is for Erik. You're unquestionably in the industry, You've seen trends and true opportunities to grow the business along with others on the leadership team. But you've also seen fads, things that have been here today and gone tomorrow.

So as you look at our industry over the next three to five years, what do you see as the top two or three things that are most important for travel managers and travel professionals over the next few years?

Erik Mueller: I think the big thing we're going to see is data flow. It is going to flow more easily across different platforms. I think virtual payments and payment processing and reconciliation will become more seamless. The point of sales and things like that will finally evolve into something that is more meaningful and less of a, "sticking your credit card in a slot" and stuff like that. I think we're going to see a lot more touchless services. I mean, there's no reason to even check in at a hotel anymore. Your phone is your room key and it's your check in and check out. I mean, you should just be able to walk into a hotel and it should know that you're already there and it should alert you when your room is ready and what your room number is.

Going back to the Machine Learning and AI stuff, the big thing about this is, it has really forced us all to advance technologically. It's not like this stuff hasn't been there. There just hasn't been a motivation to implement new technology. I've been traveling at least once a month, and I'm already watching and seeing these technological advances. Now that this infrastructure is in place, providers have the ability to continue to grow their technological stack.

We've had time to implement new infrastructure. We've completely rewritten everything in the back so that we can really take advantage of all these advances in the future.

Whether you're a TMC or whether you're at a corporation, you're going to find that the way you purchase and consume travel, report on travel and things like that, are going to change and become easier. You're going to have more information at your fingertips. 

At the end of the day, duty of care should be your main objective. You need to embrace that and then implement the right technology stack for managing travel and procurement. You need to have the right selection of tools and to have someone lead, whether it is something internally doing it, like a strong Travel Manager, or a good TMC partner, that has a very consultative and data driven approach. 

Questions from the audience

What's going on with NDC? Is it real? And will Grasp be able to capture NDC transaction data?

Erik Mueller: That's a good one. Is it real? Yes, it's real. NDC has a lot more potential but for now, it's so specifically airline focused. At the end of the day, this is just a way for the airlines to generate more revenue or keep more revenue for themselves. And therein lies the adoption issue. But as needed technology stacks and new types of travel agency offerings come into play, I think NDC will become more relevant, going back to my comment on data flow.

We can capture data from NDC and populate it, but really it's really "selling" driven technology. But it's also providing better and a broader set of data and more capability, so there's some potential there, but they're going against the GDS and the GDS is there to serve a purpose, right?

Dave Lukas: Everybody wants a cheaper GDS, right? So they're going to look for ways to save money and not give so much to the middleman. But the middleman has done it right for 70 years or however long it's been. So there's something to be said for that.

What do you believe is the best way to build sustainability into a travel program that will not only give the best available data insights, but will also ensure engagement from the road warriors that are not focused on the data? Because it doesn't touch them as much as the travel itself?

Dave Lukas: Every single travel program is different, every policy is different and everybody does things their own way. So what's important to some people may not be important to others. I think the most important thing is that you have to craft it specifically and technology can do this. You mold it specifically to those needs and you measure it, so you can manage it.

So you need good carbon data and you have to get that from a good source and you have to make sure your source is reliable. And you need a buy-in, you have to cater it a little bit to get people to buy in and really understand their impact and to care. 

So it all starts with good data. Make sure that your source for where you're getting your CO2 data and information is robust, solid and proven.

Erik Mueller: It's also a cultural thing. The company needs to promote and encourage it. The thing is, there are road warriors who do care and if they know prior to buying, what the impact is, I think they'll make the right decisions. If you have the right employees, they will do what's best for the environment and what's best for the company. But they need to know upfront when they're making that decision or the decisions being made for them.

I prefer to let people make good decisions for themselves, because they can check the box and say, "Hey, I did something good for myself and for the world".