Travel management software isn’t just for large enterprises anymore. Small to medium sized businesses experience massive benefits when they book and manage travel with software designed for businesses, instead of booking on consumer sites and then scrambling to track down the invoices.
Meanwhile companies of 1000+ employees typically already use travel management software, but they may have been locked into contracts with companies offering low inventory and costly travel support.
Whether you’re a long time user of travel management software, or you’re researching this software category for the first time, we’re covering everything you need to know about the feature sets and the market as a whole.
What is travel management software?
Travel management software is used to book trips, manage upcoming trips, and track and report on previous trips. Other important features and uses include the automation of corporate travel policies and the ability to consolidate travel invoices and vendors.
Just a couple years ago, only medium sized businesses and enterprises would have used travel management software. But with new disruptors in the market, small businesses are ditching consumer booking sites in favor of travel management software built for business use. Meanwhile, corporations that traditionally booked travel with agencies are moving towards in-house travel management, supported by robust but easy-to-use software.
What to look for in travel management software
End-to-end travel management platforms that cover all functionality from traveler data management to booking to policy creation to automatic expensing and more are definitely the best solution on the market. But they vary greatly in their functionality and in the cost savings they can provide to businesses, the main driver being access to low cost inventory.
Here’s a checklist of the critical things to look out for when vetting solutions in this emerging software category:
- Ease of booking for administrators
- Self booking for travelers
- Massive travel inventory
- Automatic travel policy compliance with customizable policies and approval workflows
- Future-ready tool that will scale and adapt
- Around-the-clock travel support including direct line, chat, and email
- No additional charge for travel support
- Consolidated invoicing
- Travel spend reporting
It’s definitely an exciting time to watch the business travel industry. A few years ago, it was an old, clunky, boring market, and now it is popping off with new solutions and new technology everyday.
The travel management software market
Corporate travel management is one of the largest global markets that has yet to be fully disrupted in this digital world.
There’s a familiar story with many markets over the last couple of decades: new technology enters the space, new user expectations arise, and businesses either adapt or die.
This is exactly what’s happening in the business travel market. Only this time, the stakes are incredibly high. The expense management market size is estimated at somewhere around 2.5 billion USD.
Compare that with the corporate business travel market, which hit 1.3 trillion in 2016 and is forecasted to hit 1.6 trillion in 2020. It makes sense when you think about it. With expense management, you’re buying a tool to help you track money, but with travel management you’re actually choosing where your money will go. Who will get a piece of this massive pie?
Why the travel management software category is booming (and still growing)
This massive market is ready for disruption. New technology developed in the last few years is making it possible to revolutionize business travel by offering companies a consumer-grade online booking experience. Why call your corporate travel agent when you can book for yourself in a tool designed for businesses? Soon, everyone will be asking this question. In the next two to three years, the question won’t be “Should I use business travel management software?” it will be “Which one should I use?”
Here are the problems that travel management software can solve:
- Difficulty enforcing travel policy
- Lack of visibility into travel spend
- Time consuming travel booking process
- Lack of hotel and flight options
Just five years ago, it was too complicated for any startup or legacy tool to develop an OTA (online travel agency) for businesses. Things have changed. The technology exists, and new startups are entering the field. The corporate travel management sector is one of the biggest emerging markets in tech.
Take a look at the G2 Crowd Grid for Travel Management in April of 2018.
And in July of 2019, the G2 Crowd’s travel management category looked like this:
By the summer of 2020, it’s very possible that this market (and its G2 Crowd Grid) will be as saturated as the expense management category, which just a few years ago looked as empty as the first grid above, and now looks like this:
Is that the future of travel management software? It’s very likely that this will become a crowded space, with a lot of niche players that don’t solve every problem faced by travelers and administrators, but instead just one specific problem.
Disruptors and old-school solutions in corporate travel
There are many players in the emerging travel management software market. Here are the key players, some brand new and others just trying to keep up.
As this market continues to get disrupted in the coming years, the only way travel agencies and old school travel management companies can survive is if they become technology vendors (not just service providers).
Today’s travelers demand features like self-booking and mobile access to flight inventory, while employees in administrative and finance roles are looking for smart features that help them do their jobs better. Around the world, corporate travel agencies will go out of business (just as leisure travel agencies did in the 80s and 90s) and the ones who stick around will have found a way to adapt.
Legacy corporate tools
There are large legacy tools in this niche. These are the major enterprise software providers who have been offering business travel software for a decade or more. They will continue to improve their offerings by making them lightweight and easy to use. These tools don’t tend to offer all the inventory that a leisure OTA like Booking.com or Expedia offer, and that will continue to be a problem for businesses looking to save money by accessing consumer-grade inventory.
There are so many niche startup players entering business travel management, and the number will only grow (probably double or triple) in the coming years. These companies will find a certain problem in the market or a niche customer base and will build technology to address that. Some of the existing niche players offer AI concierge chat bot to travelers and gamification and incentivization for business travel budgets.
Travel management platform
New travel management platforms are different than the two players above in that they bring the startup mentality (consumerization of business travel) but they also are tackling the problems of the industry as the whole, not just offering a single useful hack. These software platforms typically offer speedy booking capabilities, ease of travel policy compliance, and full financial visibility and control.
Of all four players, travel management platforms are best poised to solve the problems that businesses face and to totally disrupt this market.
Where the travel management software category is growing the fastest
You might assume that the $1.3 trillion all of these players are going after is mainly spent by large corporations. While winning big accounts is certainly a great motivator for disruptors in this market, that’s not necessarily where the big money is.
Currently, there are hundreds of thousands of small to medium sized businesses who are currently doing nothing when it comes to managing business travel. They’re not using software. They’re not using an agency. They’re doing everything the manual way and booking on tools built for consumers, thus sacrificing the ability to control and track business travel (which happens to be an enormous expenditure).
Part of the current opportunity comes in winning over the businesses who currently have no travel management solution. Opportunity also lies in businesses who have been dissatisfied with their corporate travel experience for years. Many enterprises have been saddled with high agency fees, commissions, and charges for poor-quality customer support calls.
The travel management software category has changed rapidly in the past two years, and yet we’re still at the beginning of this huge wave of disruption.
Check out our guide on choosing a business travel solution that travelers love, complete with a checklist of vetting criteria.