Welcome to Travel Again presents the weekly travel Roundup, covering the headwinds and tailwinds impacting the business of travel. Please welcome our hosts, Mike McCormick and Ed Silver.
Hello Mike, hello Ed. How you doing today? Can’t be better. It’s always good to be back with you and once again we’re back very quickly. We were together last week with a great episode and a fantastic speaker. For our listeners, don’t forget to go listen and subscribe so you never miss one of our podcasts. No doubt that they talk about summer slowdown not happening here at Travel Again. Things are busy, but actually for the travel industry, we’re going to have a record summer in terms of travelers and certainly people moving through TSA. No surprise if the industry is busy, then so are we.
Great to be back. Before we get started, I want to remind everybody again about our new website launch. Our site allows you to really dive into Travel Again for our expert travel consulting services, the can’t-miss episodes of our podcast, and some really good industry insight. We say all the time that we bring clarity to chaos for the industry and for your business, but if you need any help—and everybody could probably use a little help—give us a call. We are happy with our website and a chance to bring together all that content in one place. Thank you, Mike, for that reminder. Again, it’s traveladvisory.com, and feel free to go there to see all the articles we cover as well as the latest news and podcasts.
All right Mike, let’s get rolling with episode 8. You ready? I’m ready. Let’s bring on the news.
First up in the news, an article in CNBC: “SoftBank-backed travel tech firm TravelPerk acquires US rival and bags 135 million for expansion.” We had Jeff Klee on not that long ago, so feel free to go check out that episode, but congrats to the team at AmTrav. Mike, give some perspective on why TravelPerk would acquire AmTrav and what it means for more consolidation.
There’s a bunch to unpack here. Aside from the fact that history has shown with the industry that a lot of times for companies to expand globally and certainly to enter the US market, an acquisition is often the best way to do that in terms of time, just getting to market fast and having a base of customers. We were just on with Flight Centre and that’s the way they entered the market here both in leisure and in corporate. It’s a trend that’s been around for as long as the industry has been around post-deregulation.
Interesting a few things here: one is the acquisition, two is they’ve additionally taken in another $135 million. Once again, it shows that corporate travel is a big money game. Some of the commentary we’ve had before about how you can compete in this market where that 135 million and all the resources are going to developers, code, and product—not so much agents per se. Not that you don’t continue to have servicing needs and need qualified agents, but you look at what the cost of working in that marketplace is and how there’s a real big divide between the big players who have the money to spend on tech and the increasing needs that are coming with AI.
For TravelPerk, the other dynamic here is entering the US market in a significant way. The European-based company has worked to build their business with a European core base there, but looking to expand and looking to compete. The US is still the biggest corporate travel market. Going back pre-pandemic, China was surpassing the US in terms of overall market size, but more of that market was leisure-based. The US for corporate is still a huge market and very competitive.
Our guest today will have a lot to talk about that market. It is very timely as well. I love that all these things are happening and we’re talking to the leaders involved in it. Congrats to the AmTrav team; I think they found a good marriage there because AmTrav was very focused in their way. Although they were smaller in size compared to the real big players in the corporate travel space, in our conversations with Jeff, they were spending more and more of their resources devoted to technology. They were a leader in NDC, so again, probably a really nice fit from the outside looking in. We’ll see what happens and what that does in terms of the marketplace here in the US.
Congrats to the team, and if you have time, go read some of the stories about Jeff and his partner founding AmTrav. It’s a great entrepreneur story. I know a lot of entrepreneurs listen to our podcast in travel. I know travel can be tough to enter, but it is a great founder story. Congrats to the team and congrats to TravelPerk.
Our next article—I chose Apple again this week. I couldn’t help myself this time: “Apple is shutting down Apple Pay Later just months after launch.” Apple fully rolled out its buy-now-pay-later service in October of 2023, but it’s now going away. We had Tom Botts from Uplift on not that long ago. We talked about Apple entering the market for buy-now-pay-later and he did not seem one bit concerned at the time. It sounds like that was a pretty right-on forecast there.
We’ve talked about it; payment is another area that got a lot of attention a year or more ago. Everybody had a fintech solution. I used to joke when we were talking to clients that I think my pizza delivery guy had a fintech offering he wanted to sell me. Everyone had fintech, just like everyone’s doing an AI aspect. The realities are that payment, and certainly some of these pay-later or pay-over-time vehicles, are going to continue to be an area that’s explored because people are always looking for ways on a personal finance side to plan and stretch out their funds and budgets. From a supplier side, anything you can do to stimulate growth to bring new customers to the table and using different payment vehicles can be a way to do that.
It is interesting that they got in and out so quickly. I don’t know if that’s a sign of some clouds on the horizon. We talked about whether the credit bureaus are going to get more active in requiring that some of this micro-lending gets reported on people’s credit reports. That’s some of the advantages today—you can do some of those things and it doesn’t have a hard hit on your credit. Some of those things are still working out. It’ll be interesting to see where it all falls, but it certainly has been a big growth part of the travel market.
Apple clearly pulled out for a reason, so we’ll be curious to get more information as that unfolds. Will they get back in again at some point? This didn’t hit major news outlets; it was reported by one of my favorite tech websites, The Verge. I’ll try to find more articles and post them to our website if I find them, but it was sort of under the radar as Apple likes to do sometimes. I was just wondering if that is one of those ones from a PR perspective they announced on a Friday afternoon. It’s kind of buried in the news feed somewhere because the last thing they want to do is talk about how they pulled out of a market, particularly with all the new news about Apple Intelligence that we covered last week.
I have one more story for us today and this one’s an interesting one: “The FAA will craft regulations for public air charters.” This was reported in Travel Weekly. The FAA plans to move forward expeditiously with regulations that would require public air charters to operate under the same safety rules as large commercial airlines.
I don’t know why more regulation is needed here. I don’t know why they would feel the need to add extra TSA regulations or extra screening. Maybe there’s a safety element to it, but I think that the beauty of private air charter is that it’s seamless and it’s easy. Yes, I understand you get to fly on your own private planes, so that’s super nice, but why complicate matters with using these services? They’re great services. If you ever used JSX and our friend Dave, who just went to a new one, I don’t see why regulation is needed here.
My perspective is a little different because it’s what we don’t know. Going back a little bit, I was part of a group that chaired a risk-based committee that advised TSA when we were in the early days of forming what’s now PreCheck and Global Entry. When I was part of that process and working really closely with TSA and the whole team there at the time, I had to get my security clearance. Let’s just say the things that you learn… it’s almost like you wish you hadn’t learned about the threats that are ongoing every day. These dedicated government workers are out there really truly protecting our borders and the public from ongoing security threats.
I do wonder whether this is something that is not just about old government red tape and “stay out of our business,” but there are actually some new concerns they’re trying to address in a responsible way. That’s the only thing I can really think of for why this and why now. Otherwise, it’s hardly the biggest priority normally in this kind of situation. One of the benefits is that you don’t have to go through all that same process, but from a security perspective, it’s not the best. I’ve been on those flights and in those situations, and at times, it is almost surprisingly how little screening there really is. You’re like, “Wow.”
Again, just some perspective there that maybe there’s more here going on, but hard to say and we would never know. From a business perspective, probably all the providers in that space are thinking that adding more regulation and effectively more cost is certainly not helping their business model. I can’t imagine they’re getting a lot of love from that community right now.
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Please join me in welcoming Krystal Bontrager, CEO of Direct Travel. Krystal is a travel and technology executive with over 25 years of experience scaling high-growth companies and currently serves as CEO of Direct Travel, a market leader in corporate travel management. Formerly the CEO of Talend, Krystal led the data management company’s successful transition to the cloud. Previously, Krystal spent over 15 years at Concur in progressive go-to-market roles, driving substantial revenue growth. Mike, please join me in welcoming Krystal Bontrager.
Hey guys! Welcome. How are you? Good, thanks for joining us today. Nice to see you. Very timely. Well, congratulations on your new role. It is exciting and certainly exciting times for not only Direct Travel but the overall “perfect trip” world that’s been put together here and what that means for competition in the marketplace. We say like you’re joining at a very exciting time, also a very chaotic time in the market. Never a dull moment in travel, certainly in corporate travel. I’ve got to ask the question: why’d you take the job? What excited you about the role?
Why wouldn’t I take the job? This is an incredible opportunity. Let me start with two things going on. Let me start with Direct Travel. For those of you who don’t know, let me tell you what makes it exciting at Direct Travel: it’s the people. You’re going to probably hear a common theme in many of the things we talk about, and it’s thinking about how do we show up for people and how do we take care of people. You can only do that when you have amazing people that are at the helm servicing customers. I’m really excited about the company because of the human beings that make up that company; they are just really world-class.
But with chaos comes opportunity. It also comes with responsibility. I think we’re going to have in the next five years more innovation than has happened in the last 20 combined. Who doesn’t want to be part of both of those things? It’s a really special time. I’m pumped to be here.
Having said that, now you walk in with all this funding behind you and you’re ready to go do battle with some formidable players. What keeps you up at night? What are your worries coming into the job right out of the gate?
I always think about the customer. Look, there’s a lot of opportunity in front of us and I take it to heart that it’s our responsibility to make sure our customers end up on the right side of this. Change is a good opportunity, but it’s also something you have to help people lead through. The things that keep me up at night involve what our responsibility is and what our role is in helping our customers through this. In the end, many of the things that are going on are disruptive in some ways. I know you’ve talked about NDC on some of your past conversations and I know you had Sosanyan, so everything that comes is still change even when it has a lot of opportunity with it. That’s what keeps me up—how do we help our customers and make sure that we put them on the right side of this so that they ultimately get what they deserve?
That’s what you mentioned with NDC and American. To me, there was a lot of the game plan around the industry and NDC and that was fine. It was the forcing change rather than bringing people along with you and finding that right balance. They didn’t find the right balance, and now they have to pay a price for it and restart, and that gets expensive and costly. There is a responsibility that comes with shepherding everybody through that change, and certainly all the employees too. Change is coming and it comes back to “how does this affect me?” You’ve got good people there, but you’ve got to lead them through a process. There’s urgency because of the competitive nature, but you’ve got to be a little patient with everybody too. Striking that balance isn’t easy.
American in particular is a resilient company and they’re right-sizing this ship and doing the right thing here. But at the end of the day, on the other side of the coin, it is a forcing function and we all know NDC’s been out there for a very long time. It’s not what you do, it’s how you do it. That thoughtfulness and striking that balance like you said is key. There will be many more of these inflection points. As I think about it where we sit, we want to be right there for our customers and make sure that we are anticipating these things as much as we can but also participating in and helping them through it. That’s the reputation Direct Travel has built and I intend on keeping that.
You’ve come with a lot of expectation. Steve Singh kind of laid out the “perfect trip” and he said this is why I’m doing this and putting these companies together. In your own words, what does that mean to you? How do you think about the perfect trip? Is there such a thing? We’ve all had good trips, but perfect? I don’t know. How do you look at it? What’s your definition?
There are a few things here that are good to lay the foundation around. One is when he brought up the perfect trip many years ago, we were at Concur together and it sounded incredible. The pain of being a business traveler—we all know what that is. I’m in on the perfect trip wherever that is. At the time when he brought it up, it was about digitizing the experience and tying some of the steps together. It was always about the traveler and taking care of the traveler. I think a lot has changed.
This is one of the basic premises I’ve just come to believe: you’re always on a quest for the perfect trip. As a party that’s responsible for whatever leg of that journey that you have influence over, it’s like your house—you never really stop working on your house. There’s always going to be things to fix or enhance. There’s going to be things outside of your control, so it’s never going to be perfect in the way that you’re going to be able to control all those elements, but in the areas where you can, what are the things that you can do to improve?
I just think we’re in such a different time than we were years ago and it shifts from just digitizing the steps to thinking about how do you personalize to the individual? How do you anticipate what they need? How do you think about different connections with the individual traveler as it relates to suppliers—not just air, hotel, and car, but what other kinds of things do they encounter along their trip? What does the perfect trip mean to you versus someone who’s taking their very first business trip ever? It means something very different.
The perfect trip is something where you’re never going to complete that quest for it. I think the time right now is really incredible for showing up in a really material way to personalize and anticipate the traveler’s needs.
What I love about it is—I remember Steve in the early days of Concur when he was evangelizing how a simple thing like we’re going to automate the whole expense part of it, and then that’s going to change things. He was right. At the early days, people were just like, “Oh, it’s another way to automate a little bit of the back end on the expense.” But it is much, much more. I think right now the convergence of the tech—bringing AI into the picture in a meaningful way, in a responsible way, blending that with service, bringing in all these different elements—is exciting. Meanwhile, airline pricing and hotel pricing are all going to change and go very dynamic.
It comes with a lot, and also a lot of resources are required. We’ve got a crowded marketplace now. You’ve got Amex and CWT merging, you’ve got BCD out there and Navan’s going public next year, TravelPerk just raised another 160 million and acquired AmTrav… everybody’s eyeing this market. For Direct Travel, how do you compete? What’s going to be your differentiators?
If I just peel the layer back a little bit into some of the things you’re saying, the way we look at it is this: if we go back to Steve being a little bit even maybe before his time on the perfect trip, he was able to do what we had to work with, but there was one thing that was the limiter that’s been holding this whole industry back, and that’s the infrastructure. When you start talking about the things that you were just mentioning, what enables the true personalization and true openness and connectedness? It’s limited by the infrastructure that’s a bit archaic and been holding us back.
When I think about Direct Travel, first of all, there’s a first principle that you have to be modernized and open—cloud-based infrastructure. That just has to be the foundation by which we’re operating on everything. Then you have to think about what are the best-in-class or world-class solutions that our travelers, the travel managers, and even our suppliers need to be able to really deliver value in a way that starts to show up in things like dynamic pricing and merchandising. We really need to be able to serve our customers in a much different way than we have been able in the past.
It starts with that as a foundation, but the thing I’m incredibly excited about regarding Direct Travel is that no matter how great the technology is, you’re always going to need people—at least in my lifetime—and the need in terms of how you need them changes. It’s funny because I use my phone and I don’t really want to use it to call people that often. I just want to use it to get things done as quickly as possible. I actually sometimes don’t want to use the phone for calling at all, and it’s ironic because the thing was developed to make phone calls. But there’s times where I’m like, “Nope, I don’t want to chat, I don’t want to email, I want to actually speak to someone because it’s at that critical moment.”
Service and showing up for your customers when and how they need you and taking care of them is the perfect combination of the modern infrastructure with world-class technology coupled with carefully curated ways to help support our customers. I’m challenging us to think about how do we continue to evolve the value that we bring to not just the travelers but the companies they serve. As we think about this change management, how do we show up for them? How do we show up not only for the travelers but the travel managers and the people that are running these programs? Booking seven days in advance used to be part of your policy. Is that now with dynamic pricing still a thing? There’s just being able to really curate the way that we help our travelers, travel managers, and the suppliers, because they’ve been missing in this equation as well in terms of being able to personalize to the travelers. I’m thinking about how we show up differently as an evolution, not in replacement for what we’re doing, but just as the times evolve.
Krystal, one question: I assume the modern infrastructure you’re talking about essentially is the Spotnana piece to the Steve Singh puzzle. Does that mean Direct Travel will have to invest less in infrastructure and technology because Spotnana is handling that for you? And then a follow-on: Spotnana works with other TMCs, so that part won’t really be a competitive advantage for Direct Travel since they work with other TMCs, unless they will stop?
First of all, it’s everything from booking and making sure content is king—which is why Spotnana—to expense reporting and how to actually eliminate the expense reporting, which is near and dear to both Steve and I. We know a little bit about integrated travel and expense. And then the thing that no one’s really done a great job of in terms of just fully planning and booking is group meetings and events in the way that Troop has uniquely started to address it in the market. It’s really a comprehensive look at the technology stack.
The second part of the question: first of all, this is a very big market and there’s a lot of room for a lot of players in here. I don’t think this is a “winner take all.” To serve customers, there’s places where each one of us maybe have a particular competitive advantage or value that we bring. But the reason why you want to have a modern architecture is that you can innovate on top of it. It’s not just stopping at those technology stacks; it’s how you bring them together in a connected way and how you overlay other things on top of it, like AI and conversational AI.
We talk about using technology stacks—you guys actually talked about it on one of your previous podcasts—about the benefits of having that independence of people being able to build the best-in-class technology and us being able to plug that in. I’m here for that all day long. Spotnana can serve an industry and then we can take it, leverage it, spend time, money, and resources on the things that are really important that we’re really good at, and then build on top of it to continue to round out that experience. I just think that’s an incredible place that we can be.
The Sosanyan thing about “somebody has to clean the gutters”—there’s a lot of these capabilities that are important and critical infrastructure, but that isn’t necessarily the differentiating factor. That’s just the table stakes.
Table stakes. When you have an organization like Spotnana waking up every single day knowing exactly what success looks like and they can dedicate their time and resources to that—rock on. The same thing with Center and the same thing with Troop. Then we are the recipients of that, which allows us to keep our focus on the people aspect of this and how we connect those together. For me, my whole professional life has been about creating outcomes for the people we serve. How do we create the best possible outcome for the travelers, the companies they serve, those travel managers, and the suppliers? I wake up every day thinking how do we leverage that along with these incredible resources we have to show up in an incredibly unique and differentiated way. That’ll keep evolving because of all the things we talked about. We hope to be in front of it and leading it, as is in the DNA of Mr. Singh and myself.
I’m going to quote you from a little bit of research before we bring people on. In 2020, you had a Forbes profile and you were quoted saying: “There’s a perception that the industry is really inventive but we don’t move quickly enough. I think COVID has shown a light on areas where we’re really behind. For example, the number of businesses that lack the digital infrastructure and strategy to mitigate this changing landscape has been massive.” You weren’t even talking about the travel industry then, but I read it and thought that sounds like us. It was like yesterday! But it really does apply to the travel industry. I just thought it was an interesting perspective about how COVID shown a light on it. I think it did for the travel industry too. We came back and that recovery and all that went with it drove everyone to say we’ve got to build it back better and certainly more efficient because we can’t keep doing business the same way we were doing it in 2018 and 2019. It was a consequence or an outcome of COVID and the recovery. If you’re still using the same playbook, you may survive COVID but you won’t survive the next two or three years. What industry were you talking about if not travel?
That was the time when I was leading Talend. My whole world for several years was just focused on how organizations leverage data, which is ironic because spending 15 years at Concur and then several years at Talend, it was such an unknowingly important journey. In order for all this to fit—at Talend, I saw firsthand over and over, and especially during COVID, when having accurate information and information you could trust was so important.
How applicable to the travel industry and how important to the success of AI is the ability to trust the data and the connectedness? It’s why it’s so important to think about what our customers need—they need access, choices, options. It’s funny how those principles, whether it was there because that was a very normalized conversation across all different kinds of businesses, certainly sit at the heart of what’s going on in travel right now. It was a great opportunity to learn about how important it is and then to apply it here at Direct Travel. It’s part of the reason I’m so excited about what’s possible.
Our closing question that we’ve been using for each of our guests: when you look ahead to the future, we always talk about what’s changing, but name something you don’t think will change for the travel industry.
I’ll go back to my core belief: people. I think what won’t change is… I think fear drives a lot of people into thinking we’re going to replace all the people and there won’t be a human being that’s going to be needed. I just think that couldn’t be further from the truth. It’s more about leveraging people when you need them and in the ways you need them because when you really do have a challenge, you need to know that people are on the other side of that phone call. That’s what’s not going to change—the need for people and the need to really service people in an incredible way.
Couldn’t agree with you more. Thank you so much for coming on today.
My pleasure! Thank you for having me. It really was a great pleasure to be here with you.
Wow, and you made a very compelling case for Direct Travel. Good luck with everything in your new role.
Thank you, thank you, thank you. Thank to Krystal Bontrager, CEO of Direct Travel.
All right Mike, very good. We will be back shortly with headwinds and tailwinds. To take a minute and talk about our sponsor BLS Company—five decades of experience. Five decades! Great family business founded and led by Phyllis Yoken. She’s the matriarch of BLS. Her and her husband founded the company in their kitchen 50-plus years ago. Amazing story. They have worldwide coverage and they’re an industry leader in duty of care for all of your ground transportation needs, everything from black car on up through any form of bus. Any need, any market, contact the Yoken family—Phyllis, and her sons Michael and Eric who are actively involved in running the business. Great family business at BLS.
Now we will wrap with headwinds and tailwinds where we identify what we think is adding value to travel or taking it away. Mike, you’re up first with tailwinds.
This is the fun one. There was an article that came out in Forbes about a business-class airline called La Compagnie. The CEO was just talking about and celebrating 10 years in business and how they’ve been able to survive. I love these stories for the industry. Certainly in the airline industry, there have been so many airline brands that have come and gone trying to compete and get a foothold against the major players in the market, but it’s always great to see when someone has made it and is really providing a value-added service to the market. In this case to business class customers—they’re charging very competitive rates for a really nice product and giving you a little bit of that private aircraft feel. Nice to see and love those stories.
Very good. You had tailwinds today, that means I’ve got headwinds. I was reading an article and the quote was: “Why haven’t you resigned? Senators grill the Boeing CEO over safety records.” They had a heated exchange while they questioned the Boeing CEO, Dave Calhoun, about the company’s safety record, whistleblower allegations, and his pay. Boeing is so critical to our overall industry; they simply must get their acts together and they really need to take action here. Things have not gotten any better; incidents continue to occur. While aviation and travel remain tremendously safe, Boeing really still needs to get things together. If that starts with Dave resigning or finding other ways to improve things, they’ve got to find a way. Until they do, I believe Boeing will remain a headwind for the industry overall.
Good perspective and I agree. I’m going to come at it a couple different ways too. One is that the problems of Boeing have been years and years in the making. Regimes at the helm making decisions have ultimately put them in the place they’re in today. Without recapping all those, they’ve been written about at length. But the thing that puzzles me is why they haven’t gotten their act together even from a PR perspective to be able to go out and say very aggressively: “Here’s the things we’re doing, here’s our long-term plan, here’s the changes we need to make. It’s going to take time to do them, but we’re going to win your trust back and we’re committed to building world-class aircraft like we did years ago.” Where is that message?
I’m just stunned. I feel like they’re just on their heels, playing defense all the time. This is kind of 101 stuff that you do and I just don’t get it. I don’t understand where the leadership part of this is that says: “Look guys, we’ve got a lot to do here to get back to a place we’re going to get to, but we’re going to do that.” Now if that means there has to be leadership change, then that’s what it means. I’m not on the inside and I’ve never met Dave Calhoun, but man, the fact that they haven’t tried to quiet the noise and address these situations… I just don’t get it. It’s so critical to our industry that they get it. Until they do, I’m going to keep it on the list of headwinds for sure.
A big one. All right Mike, thank you. That is our show today. Thanks again to our sponsors BLS and Safe Travel RX, and we will see you back here shortly. Thanks again, Mike. See you Ed.