The future of corporate travel with Norm Rose

 Justin: This is Justin Schuster, and I’m the VP of marketing at Spotnana. My guest today is Norm Rose. Norm is the president at TravelTech Consulting, and he’s a senior technology analyst with PhocusWright. Norm thank you so much for joining us today. 

Norm: Great to be here, Justin. Thank you. 

Justin: And Norm, you’ve been following the evolution of NDC for a long time. You’ve been in the travel industry for many years. And you’ve been talking with a lot of travel buyers about NDC in the recent past. How are you viewing the current state of NDC adoption? 

Norm: I have to say that for a trend that’s been around for so many years, the adoption profile is very slow, which is pretty surprising, but understandable as well.

I think today that the major focus has been on content and serviceability rather than merchandising, which is really what that is. Tool that the new protocol is designed to do now, obviously, the fact that there is no standard that each of these airlines are on different levels of the schema. Produces different results, different serviceability capability.

And so I think we’re at a crossroads. The other factor, which is behind the scenes is the swapping out or the updating of the passenger service systems of the airlines. Sabre and Amadeus have introduced new passenger service systems that are slowly going to be migrating over the next few years for most of the major carriers.

When that happens, there should be new merchandising capabilities available, which will also accelerate NDC. 

Justin: And as it relates to the missed opportunity, what is it that you’re seeing, or I guess, what are companies missing today if they’re not adopting NDC? 

Norm: It does disturb me quite a bit because, I feel like the corporate buyer, corporate travel manager has a fiduciary responsibility to the corporation.

And, so much emphasis has been put on the negotiation prowess of the travel manager to get the best deal. But if we have situations, obviously the American Airlines’ initial removal of 40 percent of their inventory, and then their re-entry into the marketplace with the change in management softened the impact.

But to me, the continuous pricing that’s been implemented by United and by Lufthansa and soon by American and others are really one of the key elements that causes this fiduciary responsibility to break down. The bottom line is if you are saying to your corporation, you are getting the lowest possible fare in the marketplace and you’re not enabling NDC, there may be content that is missing

And I’ve heard numerous stories from CEOs paying twice as much for business class on a trip to just constant feedback from travelers finding cheaper fares on the airline sites. It’s causing friction in the environment, but I think it also breaks down the basic role of the buyer, which is to make sure they get that best value fare for their customers, so it’s amazing that no one’s reporting how much more they had to pay due to lack of NDC adoption while they’re very anxious to report how much they’ve saved through negotiation. When you just oppose those two issues that doesn’t seem to make a lot of sense to me, it seems like most buyers should have had a vested interest to try to get NDC to work, that the serviceability has been a big issue, but there’s also the kind of waiting, wait, waiting wait and see how the GDS kind of fix the problem mentality in the industry.

This is not an industry that likes change. And resists change, both the change in processes, change driven by technology. And I think that waiting for the old GDS systems, and I only say that old and somewhat quotes because most of them have spent millions of dollars updating their systems, but the core is still a pastor name record.

Then I’m sure we’ll talk about it in a moment, but as long as we have that kind of infrastructure, we’re never going to have the type of level of. personalization and merchandising that the airlines are looking for. And we need some partnership from the airlines as well. I was working on a project outside the corporate travel industry for a tour operator.

And when I asked the airline, what is the value for the tour operator to adopt NDC? They gave me financial value. In other words, here’s the incentives that are being offered. It’s got to be more than incentives. It’s got to be something of value. And I think that hasn’t been well defined.

There’s a lot of work to be done on both sides of the equation here. 

Justin: And I would agree with you. I think that there are some innovations out there. The continuous pricing is an example. Some airlines are getting into more of an omnichannel servicing kind of a concept where it’s possible for the traveler to be serviced by the gate agent or by the TMC and for both to be kept in sync.

We see examples like Lufthansa with the green fares or British Airways is getting into some automation of disruption handling. And in some cases there are some, a few new content elements that are being offered, but you’re right. I think a lot of it today still is more on the servicing side.

And do you, is it your view that to unlock this future of NDC that’s based in merchandising that we need to get beyond the PNR and we need to get into the new offer/order systems that are being delivered into the market? 

Norm: Let’s break that down for a second, Justin. What this offer sounds like you understand my requirements.

The reality of corporate travel and business travel in general is that we all have different personas.

It’s not just personalization. It’s really how we’re acting on the plane. We would hope to achieve that on that plane. Sometimes I’m in a complete kind of off duty mode. Other times I’m rushing to complete a presentation or a document for a client. So there are different levels of reasons why people travel.

And I think that where we’re at right now is that we’re not uncovering those reasons. We’re not really looking beyond that. We’re treating each transaction as if it’s a standalone transaction. And I think that the way that profiles are stored, the way it will, I’m sure we’ll talk about that a little bit more.

The way that information is stored in the PNR, it’s just not very efficient for a modern technology stack that should be at least a relational database, which the GDSs have never been. And, a lot of people coming into the industry, that’s the first shock they have is, what do you mean the GDSs can’t do an SQL query on the information and get, show me all the people who did this and that it has to be dumped into a database and cleansed and so forth until we get at that information.

Okay. So the basic way that information has been collected around customer insight in particular has really inhibited the ability for true merchandising and true personalization, but I’m optimistic that is going to come. 

Justin: And we see this in a similar way in the sense that we think of it as, there being a traveler graph that has all the information about me and my context and my preferences.

And then there’s a seller graph that the TMC has about these are the routes where I’m doing heavy volume of traffic and these are the customers I have and what they’re solving for. And there’s a travel provider who has the ability to be able to take their product offerings and componentize them and be able to combine them with the right offer to the right person at the right time.

But all of this requires access to data in a way that’s permissioned by each of the stakeholders and then with intelligence roles to be able to complete those transactions in the best way possible. And that’s the future. That is going to take some time for us to arrive at, but hopefully that’s the day destination we’ll reach.

Norm: No, absolutely. And there are components of that, which I think technology is going to provide a solution for. We are still somewhat behind, next year is my 30th year as a consultant. It’s amazing to me when I think about that, but 1995, I started, there’s a period in my life where I was convincing people that the internet is real. 

Now, younger listeners will say the same is true with mobile. I announced I am going to retire next year and I’m not going to be attending PhocusWright anymore. I got a bunch of comments and you can see one of the comments is from Timothy Hughes, who’s based in Australia, who said, yeah, you were right about mobile because I was telling him mobile was going to be, a big impact, a big change agent.

I have a number of things that I believe in because what I’ve been doing for the last thirty years, other than working on projects and helping to solve problems for customers, is researching emerging technologies. And trying to understand how those emerging technologies are going to change business practices.

So rather than, oh, this is cool technology. What does that mean for the process? And, I was doing a consulting project for TMC who has since been acquired. And when the VPs said, wait a second. And she went over and she reached into her desk and she said, you said this and it hasn’t happened, and I said, not yet.

I’m being somewhat silly there. I don’t have a crystal ball. I don’t know everything that’s going to happen, but what I have been able to track over the last 30 years is a consistent gap between what’s happening in the general tech market and what’s happening in various segments of the corporate or the travel industry, corporate travel, one being government being another online traditional travel agents to operators.

I’ve been involved with all those segments and airlines and hotels as well. And what I have found is consistently, what I often like to say is if you’re familiar with the Gartner hype cycle, there’s this rise and then suddenly a drop. And I think that the rise in travel is even more steep as people get even more bought in on the hype of different things like share of AI, as example. 

And then the drop is even worse. It’s oh, no, that’s not going to be, oh, look, it’s making up stuff. It’s hallucinating. That’s not going to be a factor. And then, rather than being a slow rise, it’s a lot of stops and starts until there’s adoption. I could just simply say that NDC and Spotnana’s effort is part of the API economy.

That’s been happening for over a decade. And now we’re seeing it here. The fact that people, excuse me, that systems have allowed the access to information through an application programming interface, an API that then can be connected. That’s what NDC is. For us to have the blinders on saying this doesn’t work for corporate travel, or that’s not going to happen, has been to the detriment of many people.

The traveler, the travel management company, the corporate buyer, and the tech providers who don’t see the future accelerating quite as fast as I see. 

Justin: Over your career, you’ve worked with a lot of emerging startups. You’ve worked with a lot of travel buyers and providers and just all across the ecosystem.

And in some ways, seeing what’s changing in other parts of the world gives you some reasonable sense that some of those same changes are going to apply in the travel industry. And it’s not quite a crystal ball, but the topic that you were going to present at The Beat Live.

It was amazing experience and we missed you there because you had COVID, but you were going to present it on the topic of a crystal ball look into the future of corporate travel and I wonder if you might just share a couple of the nuggets you were planning to share on stage. 

Norm: Sure. I’ll be happy to.

I used an AI device to help me with this presentation. And I also put it on LinkedIn, even though the sync is a little bit off. But, I figured I wasn’t going to spend too many more hours trying to get it perfect. I’ll just put it out there because it’s more about the content than the format.

But, the key things that are changing are really driven by. The combination of, I think, three core technologies. One is of course, AI. The other is blockchain, which people are still completely confused about. And the other is digital identity. And those three things combined. Have the perspective of really changing the process in a dramatic way.

When I first began consulting, it was very early in the corporate online booking process. And everyone said online booking tools, they’re going to replace travel agents, but what’s really happened, they’ve basically made everyone into a travel agent. When you’re going in and you’re selecting here are my dates, here’s where, and you’re doing it new every time.

I guess if you have a template or something established in the OBT, but you’re always looking at a single transaction, it’s not really automating the process totally. So the thing that is happening right now in general tech, if you read anything. If you just get your blinders off and you start reading IT, CIO magazine, you start reading TechCrunch, you start reading Wired, what is everyone talking about?

They’re talking about autonomous AI agents. Now these are not your bots from yesterday. These are intelligent bots that can actually make decisions and act on your behalf. And we’re going to see a flood of them. And the funniest thing about this is every time, whether it’s Google or OpenAI or whoever, does a demonstration about how these bots would work, guess what they do?

They make a travel reservation. Are they getting NDC? I don’t know, but the point is that travel becomes the obvious one. So why not have a calendar entry kick off a shopping, at least a shopping, whether it’s a buying experience. I think that’s a little bit off. I think the idea of allowing the bot to actually purchase without your review, considering we do have hallucinations and some other issues with generative AI now, is probably a few years away, but we’ll see next year. These bots doing other things for you, buying movie tickets, making a dinner reservation, and it’s going to enter the travel. space. Now, that’s the one piece of generative AI beyond the chat bot and the interface.

That’s more of a structural change. The way I describe it, it’s moving from a search paradigm to a fetch paradigm. Rather than I go out and search and I look, I evaluate and I say this is relevant. I get an AI autonomous agent to go out and fetch for me. And then bring that stuff back. So the other two components I mentioned are blockchain and digital identity.

Now, digital identity, I’m very hopeful will take the form of self-sovereign identity. If you want to look at a great company who does work in this area, there’s a number of great companies. One is Indicio. Another is Microsoft. A lot of them are working in this area. Microsoft is a big proponent of self-sovereign identity.

And what that simply means is that it’s again based on blockchain technology, but the fact that you have complete control of your travel information and you basically give permission based on the situation. Now think about that. If I am a traveler that has a lot of miles on airline A, but I’m having to travel airline B.

Because of schedule or convenience or whatever, wouldn’t it be great for me to allow Airline B to know what my mileage status is or maybe other financial issues that could dictate the offer? This goes back to this basic, what is an offer? An offer has to be something that’s pertinent to my needs.

Now there’s some great use cases with Indicio as along, they did this whole thing with SIDA. Which is a big player in our industry, probably a lot of people in the corporate travel industry don’t know who SIDA is, but they power most of the airports, certainly outside the U.S. With their technology, among other things, and they’re, they did this test in Aruba where there was complete entry of the country and then access to all the travel content through a single shared digital ID that created a frictionless environment that allowed interactions.

Now that’s Aruba. It’s a small country. So to get this to the level that we really need, we need a concerted effort. Now there is an organization called the Decentralized Identity Foundation. I was a founding member of the special interest group for travel. I had to drop out because it was just a lot of meetings early in the morning for me and I got busy with other things.

But Nick Price who runs that along with Doug Rice, they’ve done some fantastic work in creating basic profiles around SSI and really trying to help the industry. But you take the fact that we have other other entities that are there that are working on this. There’s a company called Gnocchi, which is doing some great work on self-sovereign identity as well with specific airlines.

And so then the third piece is blockchain. Okay. That’s it. Someone said to me, someone said to me on a planning call for an event, the corporate travel manager, I hope to retire before blockchain becomes a, what are you afraid of? I hope to retire before I put new plumbing in my house.

That’s what we’re talking about. We’re talking about something at a plumbing level, not something that is a faucet or user interface level, but why does the plumbing have to be changed? How much do corporations pay in foreign currency exchange? A lot. The current banking system is filled with local payment situ scenarios, kind of local PayPal type of capabilities that are very specific to certain countries.

And there are companies that orchestrate how payment works. I completed a very comprehensive study for PhocusWright on global payments earlier this year. What I really learned is the payment system is broken and the major trends that companies like EY talk about for future payments, tremendous lag.

So when we’re talking about the blockchain piece of it, what we’re talking about is faster settlement at lower costs. And then hopefully, as we’ve seen already with Blockskye in the marketplace, a shared source of truth, it sounds like you have a shared source of truth. As well as Spotnana. The question is what happens if Spotnana gets hacked?

And don’t tell me you can’t get a hack because Marriott, Sabre, everyone has gotten hacked. And that’s the problem when you have centralized systems, the value of blockchain is the fact that it’s decentralized. It basically has that element. I know I also mentioned in this presentation about how digital wallets will become the form of payment for corporate travel.

And I know I got a couple of questions on what does that mean? There’s a role, especially, let’s face it, with the new administration coming in, it’s going to be a very pro-crypto approach to the marketplace, and that means that the use of stablecoins as the intermediary between fiat, in other words, normal money, coming in, change to stablecoins so they can interact on the blockchain, and then fiat out, Is a scenario that we’re seeing in other industries and we’ll see it here and that will help facilitate you’ll have a tokenized.

Payment on your digital wallet that from a traveler perspective, blockchain, they will not think it’s blockchain. They won’t think of it. They’ll just say this is the way I pay for things, pay this way or automatically through AI agents. And so you combine those three things, I see a future.

Now, is it going to happen in 2025? It’s going to take some time, but I think within five years, five, certainly 10 years on the outset. You will no longer be doing OBTs. You basically will be planning schedules through your calendar, through chat, or some other device. It will pick that information up, go out, provide you that information based on your persona, and your personalization, and your permissions through self-sovereign identity and eventually book travel. 

So we will really have automated travel after all these years versus self booking or online booking or whatever we want to call the current interface. It will be dramatically different. And I think those three pieces are the cornerstone. Now, I also talked about autonomous vehicles and, flying taxis and things like that, things which I’ve done some research on, which really show some promise in the industry. But, I think those three elements of AI, blockchain, and self sovereign identity, which is based on blockchain are the key to the future. 

Justin: Everyone’s all abuzz with AI.

There’s a lot of different use cases out there. Spotnana is involved in quite a few trying to figure out how to implement AI in a very practical way to drive efficiencies and help lower costs for TMCs. We have a partnership with Otto where this vision of a conversational interface where it’s an agent almost acting on your behalf and understanding your calendar and being able to take action based on that context.

That’s a great example of another company driving innovations with Spotnana, just plugging in and providing the plumbing for that. There’s so much Norm that you just shared. It’s a lot to unpack and unwrap. I love the idea of self-sovereign identity. I hope that we get to the place where people are knowledgeable and skilled enough and sharing their data to want to be able to be an agent in that in a willing way.

Do you think that for folks who maybe don’t have that sophistication that there’s a path forward for them around self-sovereign identity as well? 

Norm: I don’t think the term self-sovereign identity will ever reach the consumer or the business traveler consciousness. It’s an internal term that represents the infrastructure.

All people will know if I suddenly now get asked, or I set up certain permissions with my AI agent, my personal AI agent that I’m allowed to share. And it just gives you that feeling of control. Right now the control is all with suppliers, but the problem is, if you are airline A, airline B knows very little about you.

As far as an airline, a customer, and this lack of kind of competitive insight really hampers the industry from doing the merchandising they want to do. I go back, I started my career at United airlines, at least in the travel industry. And, I used to design incentives for travel agents to try to sell more United, right?

There’s always, it was always that process of trying to gain market share. And then I was there and when we started calling it corporations for the first time and tried to influence corporations and cut corporate deals and so forth. But, at the end of the day, that all is fine. If we have an environment that can accept this and to work with this.

With Spotnana, I see you doing in a very positive way is getting off the PNR, so the PNR is not the center of the universe. It’s still important, but it’s not where everything’s stored. It’s just, it’s ridiculous, SSIs and OSI. Just the way that’s your accounting lines and number 12, oh no, it was entered in number 11 this time. Just the way that we’ve bastardized something that shouldn’t have been used for data storage as a data storage tool, and then build out all the processes around that. The thing that was a breath of fresh air from yourselves and some other folks who I’ve in a recent article I wrote, I call new entrants versus legacy, and I think traditional versus new entrants is the way to say that because I would say the TMCs, the big ones have invested millions in changing their infrastructure as well.

So I don’t think that your infrastructure is that unique. It’s how you implement your infrastructure and what your focus is. Your focus, as far as I can perceive, is having a relational database that is at the center of the reservation process that then accesses multiple sources, many through APIs, which brings in data directly.

So the real question. I have to go back to you, Justin, just from a conversational viewpoint, is when are we going to see the use of Spotnana data to create another prediction I had at the Beat Live, which I didn’t get to present, was that I believed, certainly within, five years, maybe six years, that there will, maybe sooner, TMC unique data.

Corporate and TMC unique offers. Yeah. I’m talking about a kind of corporate bundle. This is something we’ve talked about for eight years or something, but why not have a system that’s designed to say, okay, here are the travel patterns of your corporation. Here is where, okay, you’ve changed your policy so that you now have more hours are required in order to travel business class.

So you have a whole sector of employees who used to travel business class or now traveling full economy. Why don’t they get a free club membership or some other perk that’s part of that? And lets identify it by specific patterns. So my question to you, Justin, is how far away are you from doing something like that?

Some type of unique offers. Are you able to disclose that during this podcast? You may not be able to, I realize. 

Justin: I don’t think I have a specific answer for you, but I know that we are architected for supporting that type of flexibility with retailing. And one of the benefits that we get out of building direct integrations with travel providers is the opportunity for us to build a relationship at the level of engineer to engineer.

And so then the doorway is open for us to say what’s next? What do you want? Where do you want to go from here? And here’s some ideas that we’re happy to share if that’s of help and then we can go innovate together. And that’s a big hope for Spotnana out in the world is that in various ways we become a catalyst for innovation in the industry just by providing a system that has an open architecture, extensible data structures.

And works well in this open, this new world of API economy. 

Norm: I think it’s worth us defining open computing. Of course there’s open source, which is a shared set of code that people collaborate on. We’re not talking about open source, but open computing means that you have published APIs that could be accessed.

Not all systems are open. Apple’s a good example, right? It’s a very closed environment, very successful. So I’m not saying open is good or bad, but I would say that open certainly facilitates the integration of third-party tools into the ecosystem in a much easier way and perhaps integrate the APIs from the airlines directly.

I think that, to me, is one of the things that is a little misunderstood. So the folks at the GDS will say, hey it’s just a protocol. Just swapping out EDIFACT for XML, which any IT guy would say that’s modern and it’s really not XML. It’s not really modern, but at least it’s extensible.

So there’s more information. The pipe is bigger, more stuff comes through, but the key is not just more stuff comes through, it’s how do you use that more stuff? How do you take that and change that? And that’s the question I have for the GDS is whether they’re actually progressing. Now, again, they’re spending millions.

I’ve got very strong partnerships for AI with Google and with Microsoft and with AWS. Thinking that they’re just sitting on their hands and they’re not moving forward is silly. Of course, they’re moving forward. But how fast are they going to change the infrastructure? And then what’s the level of true innovation that can be done in the next few years that they may not be able to do yet?

And that’s the question. We’ll see how you guys perform in the marketplace. You’re certainly very disruptive in that sense, but I’m sure you probably face travel buyers every day. Your sales, your salespeople who say I’m just waiting, GDS is going to solve it, why should I bother?

This sounds like a big undertaking, switching out this whole platform. For my TMC, why should I care? As long as I get the content through GDS, what’s the difference? And I think what we’ve been talking about in the last few minutes is that there could be a really big difference if the data is used in a different way to provide insight and thus unique offers and unique products to corporate travelers.

That will make a big difference. And so that’s always a question I have for the GDS. When are you going to be able to provide that insight? And there’s a difference, as we get these three core technologies moving forward, there’s a difference between inside action and just content. And I feel like content has been the focus, we’re missing content.

Okay now you’ve got the content. How are you going to use it? And we’re so early at that stage right now. 

Justin: Lots of opportunity for moving things forward in many directions. And I think that it’s a very exciting time to be in the travel industry. Norm, I want to thank you so much for being our guest.

And I want to ask you our, the closing question that we ask our guests, which is, the travel is a human emotion podcast, when you reflect on the connection between travel and human emotions, what’s top of mind for you? 

Norm: I started my career, as I said, in the travel industry, I was in a different industry before this, in 1982.

And I used to say I was a sales rep for United Airlines. So calling on travel agents, doing incentives my offices when I started in Norfolk, Virginia, We’re at the airport and you walk through the airport and people connecting their family, their business associates, their maybe, new people that haven’t met before and are meeting for the first time, but travel is basically has changed human society.

We sometimes have a very narrow view of human beings in this sense. Our presence on earth has been just a very minor part of the evolution of the planet. And it’s really just since 1960 that we’ve had jet travel that you’re not taking four or five planes in order to get across the country.

And the ability to connect people, when I first started with United, and then when I ended up working as a corporate buyer, understand corporate needs, and then as a consultant for the last 30 years is I recognize that travel from a kind of core function, a human emotion is one that connects people as much as I enjoy talking to you on this podcast, when you and I met.

At one of the BTN functions in the Bay Area, it was much different, right? We, there’s a different sense when you’re in person and I think that travel will always have that value. And in essence, the emotional impact of travel. It’s about connecting with people and connecting with society is obviously a whole other benefit on the leisure side of exploring and experiencing other cultures and things.

And, for those who have never traveled outside their state or outside this country. It’s really a very you know, eye opening experience to see how different cultures live in the world. And so the value of travel and the emotional travel last point I will make, I know I give you very long winded answers, but that’s what I’m known for.

Is how much emotion business travelers have around their business travel that they don’t pay for. If that’s always amazed me. I remember I met the top, when I first started at Sun Microsystems, I sought out and met the top traveler and he was so anxious to say, here’s the hotels that I prefer and here’s the flights that I prefer.

And this is what I want. And it was like, yeah, but who’s paying for those tickets? It’s Sun, it’s not you. You’re producing a lot of sales. So you’re being rewarded, but when you have a delay on a business trip, sometimes it’s more emotionally draining than on a leisure trip.

So there is an emotional attachment here and sometimes we lose sight of that. So I’m glad that’s a theme of your podcast. And what I’m hoping for is all the technology we’ve talked about and all the changes will help ease the friction. If you can ease friction, you’re going to have happier travelers and you’re not going to have a happier ecosystem.

Justin: Norm, thank you. Beautiful way to end. And thank you so much for being a guest on our podcast.