Helsinki 19th January 2012

Understanding the mobile travel revolution

q  The following presentation is based on open source principles, and the content and information can be shared by anyone afterwards as long as the source is quoted

q  All examples, conclusions and predictions in this presentation represents the views of Johnny Thorsen only.

q  All feedback, complaints and comments are welcome and should be send to johnnythorsen@contgo.com or expressed to me directly after the presentation.

Disclaimer

q How many people in this room has ever visited the mobile world conference in Barcelona which takes place in February each year ?

A key question

q  Your travellers are allowed to book anything they want from anywhere and any channel, as long as their booking data are available in your global travel management platform within 2 hours of the booking being created or changed

q  The travel manager has been replaced by a “supply chain manager” responsible for supplying the “global travel factory” with the relevant commodities, ie airplane seats, hotel rooms, ground transportation services and other relevant items

q  A new role has been created for the ongoing improvement of the return on investment from the travel budget – this person will be known as the “VP of Corporate Mobility”

q  The TMC is providing a basic booking service for free, as their primary business is to support the “Virtual Travel Manager” which is an automated travel manager service controlled by you

Are you ready for this in 2015 ?

q  In 2007 Nokia and BlackBerry were the kings of mobile – today they are struggling to survive while Apple, Samsung and HTC rule

q  There are more smartphones sold in 2012 than PC’s

q  The iPad has sold 40M units in 18 months, the iPhone sold 11M units in the same period, the iPod sold less than 1M units in 18 months

q  The European airspace was closed for 1 week because of a small volcano on Iceland

q  Surely, dramatic changes can happen in the travel industry in the next 3 years !

Sounds crazy - consider this

Agenda

Understanding the mobile landscape

Disruption or innovation – your choice

Prepare for the world of fragmented buying

Think about this

845M phones in China

Half of projected total

8 MOS 2+ phones

800+ mobile networks

15+ handset makers 5B SMS daily

Kenya is the leader in mobile

banking

Mobile wallet is almost ready

Google Android

Open world

50% market share

Apple iOS

Closed world

20% market share

Microsoft WM7 Partly closed world 2% market share

The battle of the ecosystems – where will you be ?

McDonalds needed 26 years to sell 15B burgers, and another 20 to reach 100B burgers

Apple needed 3 years to reach 15B app downloads, and will reach 100B in 5.6 years

Google is predicted to need 3.5 years to reach 100B app downloads

Mobile apps are unstoppable

The burger to app comparison

Why is this happening ?

The trend is showing increased growth

What is your corporate mobile policy ?

Who controls the budget for mobile ?

Have you positoned travel to the mobile team ?

Are you a lobbyist or a pushover ?

Agenda

Understanding the mobile landscape

Disruption or innovation – your choice

Prepare for the world of fragmented buying

q  DISRUPTION —  “the act of causing disorder”

q  INNOVATION —  “To begin or introduce (something new) for or as if for the first time”

Is the mobile revolution a disruption or an innovation ?

The fusion of mobile and social is both at once

Mobile device

Social network The new direct

distribution channel

And brings new players along

• iPhone / iPad is the platform • iTravel is not far away Apple

• Android and ITA is the platform • Gtravel is not far away Google

• WP7 and Bing is the platform • Mtravel is not far away Microsoft

But also a fantastic opportunity

“The cloud of service”

Case 1

• Tell me about the rate inclusive benefits before I check in, or the rate to pay when I check out

Case 2

• Ask me if I want dinner in the hotel when I have landed in the airport at 2100, and send my room number at the same time

Case 3

• Tell me what my colleagues are saying about problems in a given location, or allow me to ask if they want to share a taxi

Once you have tried it there is no going back

Case 1

• Let me know how many travellers I have in an airport when it closes due to bad weather, and let me ask what they want to do

Case 2

• Inform my travellers directly when a security incident happens which will impact their travel activity

Case 3

• Offer a taxi automatically whenever a traveller goes to a location where we have an approved ground transport provider

And it works for security too

q  Kaleva Travel is the world’s leading TMC in terms of integrating mobile services as part of their operational workflow

—  Mobile presence has gone from 25% to 77% in 3 years with more than 130,000 active working mobile numbers in their system

—  In other words, Kaleva Travel can reach 77% of their travellers directly on the mobile phone during any type of disruption or service event

—  This opens up for a new world of procurement and security benefits for the buyer, plus new service delivery for the suppliers

q  The typical TMC starts at 25% mobile presence due to historic lack of importance and focus

—  There is no dedicated field in the GDS for the mobile number (and email address)

—  The mobile number often points to the secretary or is a dummy number (99999999)

—  Resulting in lack of information delivery, and bad service experience

This exists today here in Finland

• Disruption management

• Optional services

• Location offers

• Duty of care • High risk travel • Proof of life • Pre-travel info

• Do the right thing

• Rate inclusive • Reason for trip

• Supplier compliance

• Itinerary • Transportation • Risk update • Knowledge

sharing

Traveller Buyer

TMC Security

The benefits of mobile presence are unlimited

Creating “appy” travellers on the way

And putting them on the map at the same time

Agenda

Understanding the mobile landscape

Disruption or innovation – your choice

Prepare for the world of fragmented buying

A calculated gamble or pure luck ?

Welcome to the world of fragmented buying

An increasing number of travel purchases will happen through local service channels – resulting in a new travel program based on fragmented buying

• The fragmented buyer will separate the technology from the TMC, leaving them as a “booking body shop”

The suppliers will be chosen based on their ability and willingness to provide the right data at the right time – not the cost of making a booking

• Local suppliers react faster to new opportunities, and will be better positioned to meet the ever-changing data needs

How do you control fragmented buying ?

REACT AND COMMUNICATE

Ask for information Publish results

ANALYSE AND COMPARE

Define the green zone Find the red zone events

DATA DATA DATA

Global data capture Within hours

Fragmented buying has already started

• Buy from any channel • Data entry by employee Google

• Buy from 1 preferred TMC or any local TMC

• Data delivery within 1 hour

Corporation X

• Buy from 2 global TMC’s • Data delivery within 4 hours

Corporation Y

“FIND ME” vs “I FIND”

We are entering a new travel world

The days of the traveller being willing to spend time searching for information before they go, are coming to an end – we are entering the “FIND ME” age

•  Travellers will expect the right information to land in their hand at the right time without any work required at all

This represents a massive problem for the established travel management programs, as almost all services are based on the traveller playing “I FIND”

•  Travel managers (and TMC’s) who fail to introduce automated “FIND ME” services will simply become obsolete and disappear

FIND ME vs I FIND - TAXI

• 1 • 3

• 47M • 209M

Google Bing

Personal Corporate

Your location optimises relevance

Country

City

Base station

GPS

YOU are the new commodity

YOU

Location

Presence

Service

From ZERO to HERO – get ready for change

Where do you want to be ?

Travel is viewed as an operational cost, and the corporate value of travel is generally considered to be ZERO

• You are a traditional travel procurement manager with responsibility for reducing the cost of travel (COT)

Travel is viewed as a strategic investment, and if the ROI is higher than the target the travel procurement manager is seen as a HERO

• You are a strategic category manager with responsibility for optimising the total travel outcome (TTO)

Have you ever wondered

Why are you focusing on the “lost savings” ?

Why are you only validating policy at point of booking ?

How can you measure the true value of the travel budget

Daily check of next 7 days

Calculate future savings

potential

Compare to defined

thresholds

Initiate pre-departure

communication

Capture and publish

achieved savings

$ 1M future savings

It is time to look into the future for answers

How can the suppliers play along

Airlines

App integration

Rules driven content

Hotels

App integration

Event driven services

Ground transport

Workflow integration

Payment optimisation

TMC’s

Operations intergration

Opportunity analysis

q  “To move your corporate travel program from the old world of booking creation focus to the new world of booking analysis and servicing”

q  Make travel bookings free of charge, as the real value creation is found before and during trip

q  Introduce trip-specific service configuration – with automated services delivered by the Virtual Travel manager

q  Become the best friend of the corporate mobile team

q  Separate technology from booking services – do you have any other category where your supplier provides your technology

q  Innovate and disrupt your own role

Your challenge – should you accept it

The  %me  has  come  to  make  the  travel  manager  a  HERO  –  are  you  ready  

to  be  one  ?