Sharing managed travel – how much are Google employees spending with Airbnb?
Depending on who you ask, “sharing economy” brands sites such as Airbnb will either be a huge threat or have no impact at all on corporate travel.
The smarter industry commentators know that the reality will probably be somewhere between the two ends of the spectrum – with employees testing the water (and perhaps the patience) with their travel managers and trying to replicate some aspects of their leisure trips.
This idea of corporations suddenly letting their employees travel “out of policy”, to stay in accommodation with both the legal and safety aspects either blurred or not guaranteed, sends shivers down the spines of some involved in business travel.
But there is certainly a fair degree of change in behaviour – from both travellers and their employers – taking place.
Until now there has been very little public talk from large businesses, with hefty travel budgets, as to their strategy and spend on non-managed travel products – perhaps because it irritates their respective travel management companies.
And so a panel convened for the PhoCusWright Europe event in Ireland this week could have turned into the usual debate about the issues but with no real evidence to support that change is taking place.
Matthew Pancaldi, global client management director at TMC giant HRG, says all the right things required to ensure it is seen as progressive and understanding any change in behaviour.
When asked about the biggest opportunity in corporate travel, he says:
“To get closer to the end user and give them more tools that enable them to be more flexible, more freedom of choice – and do things within a [managed] framework.”
But it was the presence of Google’s very own global travel manager, Michael Tangney, to shed some light on how one of the world’s most high profile companies is (re)thinking its managed travel programmes.
Tangney doesn’t disclose how many of its approximately 40,000 employees are travelling on behalf of the company, but with offices dotted around the world and commercial relationships of some kind with most brands on the planet, it would be fair to say that travel is not just the domain of the founders and senior management team.
What we can reasonably presume is that it has a pretty sizeable travel budget.
The Google way
Tangney says for the last two years around 30% of travel transactions for its global employees have gone through travel management companies.
The company has a policy of its own in that if an employee can beat the cap put on a particular trip by Google’s travel managers, then they are allowed to source and book it themselves. There is also an interesting “cash back”-style initiative for staff who save the company money.
There are some raised eyebrows from Pancaldi and his fellow panellists, Dean Forbes (CEO of KDS) and Christophe Peymirat (senior vice president EMEA for Expedia-owned TMC Egencia), as Tangney continues to explain how the so-called “in-policy” strategy is evolving.
Google considers its employees “absolutely managed” as it always insists on knowing where its employees are and has comprehensive tools to log all travel activity, Tangney says.
“If you trust people to make the right [travel] decision on behalf of the company, then they will give you content [plans]. They want to be able to book anywhere.”
Google collects data on where its employees are travelling, but does not ask for specific ticket information, he explains.
The cap system allows it to still evaluate the cost of managed travel for budgeting reasons, but Tangney concedes that negotiations with preferred suppliers (hotels, airlines, ground transportation) for those in managed travel programmes are less easy as perhaps when an entire corporation is under a unified policy.
Forbes calls this general shift in behaviour the “consumerisation” of managed travel, where employees or managers are frustrated with “bad corporate booking tools” because they’re more used to (and now prefer) consumer-focused services. Thus the development of KDS’s Neo point-to-point search and booking system.
Tangney says that around 70% of its employees still stay with contracted hotel programmes (perhaps illustrating where the leakage is taking place – air), but the decision-making is “led by employees who choose with their feet”.
Either way, Airbnb’s presence on the landscape is never far away in any discussion about “in-policy” and the evolution of managed travel.
Tangney says there is a “confluence of technologies” and product in the marketplace and therefore the sharing giant is a growing feature in the plans of its employees.
“Google spent $2 million with Airbnb over the past year.”
Although such a figure, on the back of $60 billion in revenue during 2013, is pretty much just a rounding error to Google, its sheer presence to the wider travel word is noteworthy.
Tangney, luckily for TMCs eager to retain or get some of the Google travel pie, shouldn’t be dismayed.
Although he predicts strategies will change over the coming decade, he insists agents are “still fundamental to the process, they have a huge value proposition”.
There was probably a private sigh of relief from Pancaldi and Peymirat, but those who insist that the likes of Airbnb are solely focused on leisure travel should probably think again.
Whether other corporate giants around the world are following suit is obvious;y unknown at this point – but let’s not forget that Google is seen by many as a progressive organisation and a good place to work, so should TMCs and travel managers be surprised if other employees start questioning policy around sharing economy-type accommodation in particular and “out of policy” travel in general?
Kevin May is a senior editor and one of the co-founders at Tnooz. He was previously editor of UK-based magazine Travolution and web editor of Media Week UK from 2003 to 2005.
He has worked in regional newspapers (Essex Enquirer) and started his career in journalism at the Police Gazette at New Scotland Yard in London. He has a degree in criminology, a postgraduate diploma in magazine journalism and will be publishing his first book - a biography about electronic band, Depeche Mode - soon.