Is An End-To-End Travel Experience Finally Here?

B2B travel payments have been around forever, but they typically involve paying for airfare and maybe a hotel. That leaves a lot of logistics for the business traveler. But what if there was a payment service that used virtual payments and mobile to truly deliver an end-to-end travel experience? In the traveler’s mobile wallet would be an Uber taxi reservation to the airport, all paperwork for global travel also mobilized, an e-ticket for the local subway system is also embedded in the wallet, along with a subway map, which takes the traveler to the reserved hotel and then to the pre-arranged meeting. PYMNTS caught up with AirPlus to find out.

 

B2B travel payments has been around forever, but it typically involves paying for airfare and maybe hotel. That leaves a lot of logistics for the business traveler. What if such a payment service used virtual payments and mobile to truly deliver an end-to-end travel experience? In the traveler’s mobile wallet is an Uber taxi reservation to the airport, all paperwork for global travel also mobilized, an e-ticket for the local subway system is also embedded in the wallet, along with a subway map, which takes the traveler to the reserved hotel and then to the pre-arranged meeting?

According to the U.S. Department of Transportation, Americans booked around 405 million long-distance domestic business trips in the last year. Those trips represent about 16 percent of the nation’s long-distance travel, $161 billion in spending and a $274.7 billion U.S. contribution to the U.S. GDP in 2013. And it’s only getting bigger. According to DoT projections, there will be 480.5 million domestic business trips a year by 2016.

Although business travel can be pleasant, it not does not yet have the seamless qualities that it’s leisure counterpart offers, which leaves business travelers in a bind when it comes to the focus of their trips. Do they want to focus on the “business” part that they have come far from home to do—or do they want to focus on the “travel” part and make sure their trip logistics are integrated smoothly.

It’s a choice Patrick W. Diemer, managing director and chairman at AirPlus International, wants to take off the table with end-to-end bookings. He told PYMNTs in a recent conversation that the ability of virtual payments and mobile to deliver an end-to-end travel experience is one of the three most significant technology changes in store for B2B travel.

And AirPlus would know, as they have been handling B2B travel payments for 25 years.

But what is new to B2B travel payments is mobile and the ability to use a single device to coordinate and pay for a wide range of services, enabling central billing that is classical and linked to a lodged account, which would happen via a walking card /corporate credit card.

“I truly believe that we, as consumers, will all have our payment cards in our smartphones so we will pay with our smartphones. As a business traveler, I want to use the same technology for business travel that I use for my personal life. That has its own opportunities because, with a smartphone being used, we hope that we can also enhance the data that we can provide back to a corporation.”

Diemer noted that the ability to collect and make sense of spending data has always been what has set digital B2B payment systems apart and nowhere is that more apparent than in travel.

“Facilitating a payment is a commodity and you don’t need a specialized company like AirPlus to do just the payment. But if you do a payment for a corporation, you want to have additional information, things like ‘Who in the corporation has initiated the payment? How should it be booked through the ERP system? Will the transaction be needed for expense management?’ There are lots of things that make corporate payments special compared with plain vanilla everyday payments. What we actually invest in are interfaces with corporate ERP systems. We focus on data quality, where we enrich plain vanilla payment information to make it useful for a corporation.”

Because usefulness, for both the business traveler and the corporations that send them out on the road, is what AirPlus specializes in. It’s not hard for a business traveler to books a flight, use an app to hail an Uber driver or even use their smartphone to unlock a hotel room. But a service that places that all in one place and thinks through the total needs of the customer so it’s all in one place is useful. Diemer said the mistake travel B2B platforms often make is only thinking of the trip in terms of point a to point B, while overlooking all the travel needs that remain once one arrives.

“I’m sitting in Frankfurt on some street and I want to go to Boston to some street. The booking engine would provide you an end-to-end travel experience. Ideally, the corporations want that to be all prepaid so payment plays an important role to make this end-to-end user experience actually become live,” Diemer said. “It involves ground transportation. Not just air. It involves hotel for those trips that are longer than a day. It really tries to be comprehensive.”

While mobile is becoming prevalent to the point of inescapability, it is also becoming more safe and reliable. For example, Diemer noted that virtual payment tools are the future.

“I think larger volumes will actually be done on one-time numbers with virtual payment tools. This technology offers more participants in the business travel management value chain to derive value from payments,” said Diemer, adding that his company’s scope is moving beyond corporate travel clients as “we are now focusing on travel agencies and travel management companies.”

But how to use what Diemer said are the “billions of datapoints” that AirPlus collects today?

“We take the data on a customer-by-customer basis and provide information back to our customers about their current spend. We have an online service that our customers can access where we offer them the ability to data-mine their own database, which is of course a subset of our database but it’s a subset that is relevant to this particular customer. When it comes to making data available across customers, we have a lot of demand for benchmarking. Indeed, if customers join or establish benchmarking groups amongst themselves, we can provide the data for them easily.”

Diemer mentioned that he tried taking the next logical step and leveraging all customer purchases to cut better deals for customers, but it proved to be unpopular.

“We have actually tried something that has failed. This year, our customers’ purchased (products worth) 12.8 billion Euros with our card. We thought, ‘OK. We have some purchasing power and we can offer our customers a good deal if we could negotiate on their behalf with suppliers.’ And that is actually something customers didn’t like. We found that customers would like to have the negotiations with their suppliers themselves. They don’t want an AirPlus rate. They want their own rate based on the AirPlus data.”

As it turns out, customers can change their buying preferences—shifting business from supplier to another or consolidating all business with one supplier—to negotiate far better rates. That is something that an AirPlus couldn’t do on their behalf.

AirPlus’s vision is global. Indeed, Diemer referenced one of his customers that uses AirPlus in 124 countries and noted that business in different geographies seem to have different preferences.

“We sometimes are puzzled why some customers are insisting on decentralized payments while other customers in other countries want to have it centrally paid. This has a lot to do with the culture. To give you an example, the North American corporate card model—which also includes the UK—lends itself to corporate liability and a lot of corporate program management, whereby the corporation itself takes positions on who has the card and what’s the limit on this card, what are the capabilities of these cards? That’s a very North American and UK-like model. While in continental Europe, the corporations delegate all of this to the card issuer.”

However, while geographies differ, some things are universal. Business travelers want simpler and more streamlined experiences, and better data about how they are spending their travel dollars. AirPlus thinks it can help make everyone feel a little more friendly when their flying the friendly skies, after they’ve landed and even when they are prepping their expense report.


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Patrick W. Diemer
Managing Director and Chairman, AirPlus International

Mr. Patrick W. Diemer serves as Chairman and Managing Director of Lufthansa Airplus Servicekarten GmbH and is responsible for Strategy, Marketing, Sales and HR as well as all activities concerning the international expansion of AirPlus. Mr. Diemer serves as Chairman of the Executive Board at AirPlus International. He has held senior roles in a number of organizations including PRODIGY Inc; Commerzbank; and Visa International in Germany where he was General Manager. He concentrates his activities especially on international sales: The foundation of a subsidiary company in Switzerland and of a Headquarter in Hong Kong were very successful as well as the diverse strategic partnerships with airlines, car rental companies etc. Mr. Diemer served as General Manager of Visa International in Germany. He serves as a Member of the Advisory Board at Commercial Cards and Payments Limited. He serves as a Director of The Universal Air Travel Plan Inc. He is member of the Advisory Committee of the Marketing Club in Frankfurt as well as member of the Board of Directors of Travel Industry Club (Frankfurt).

 

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