Providers Pivot And Partner In Travel Risk Mgmt.
Providers Pivot And Partner In Travel Risk Mgmt.
By David Jonas| August 2017
Breaking into travel risk management is no easy task. One startup whose leaders spoke at the 2016 Global Business Travel Association convention pivoted away from TRM. Some are focusing on one TRM component and partnering for others. It’s an active sector, with a few providers now targeting the small and medium enterprise market for the first time.
Heavyweight iJet International this year and last made three acquisitions. In May 2016 it bought the WorldAware brand and book of business from Aon. Later in 2016, iJet acquired the U.K.’s red24. This month it announced the purchase of Prescient Traveler, a specialist in geospatial intelligence and real-time incident reporting.
“The market is much more mature now than it was five years ago and because of that, like in any mature market, No. 1 and No. 2 own the lion’s share and all these smaller companies have to vie for the remaining 10 percent to 20 percent of the market,” said Bruce McIndoe, an iJet founder and current president. The top two are iJet and International SOS. For much of the rest, McIndoe said, “it’s just too hard. There are way too many companies running around.”
IJet also is building out its partnership unit. McIndoe said it works with more than 80 partners, including Sabre and some big travel management companies. One of the newest partners is SafeTravelRx. The company is built around patented technology that dispatches personal medical information from mobile devices to emergency responders and hospitals when users dial 911 (or the local equivalent). Complemented by iJet’s TRM services, SafeTravelRx is targeting small and midsize companies. McIndoe said the segment is “underserved.”
Corporate travel industry vet Ron DiLeo co-founded SafeTravelRx and is CEO. “IJet gives us instant credibility,” he said.
DiLeo said clients of his firm’s medical information transmission service also would get “full access to full functionality from iJet — and we can have it [priced] one transaction at a time. Suddenly it is an SME product that has not existed.” He mentioned preliminary conversations with travel management service providers. “They are mostly interested in the medical part,” DiLeo said, noting that some have pre-existing TRM relationships.
HX Global isn’t new to the TRM scene, and it too stands to benefit by partnering with an established player — though not another TRM specialist. Part of Healix International, HX Global already had been working with Concur before more closely aligning this year. Now it provides the T&E tech giant’s customers with 24/7 monitoring, proactive communication capabilities and assistance
coordination. Known as Active Monitoring, the service complements Concur Locate, the new name for the product previously called Concur Risk Messaging.
According to HX and Concur, Active Monitoring lets companies “of all sizes” benefit from a global security ops center “without the infrastructure and headcount.” HX Global SVP Tim Crockett described the benefit of partnering with Concur: access to comprehensive travel and spend data. “We had a choice,” Crockett said. “Do we develop our own technology or partner with the biggest and best? They had the same idea: ‘We’re not experts in travel risk.’ ”
TRM sources called it something of a coup for HX. “It is finally a step in the right direction,” said Tony Ridley, CEO and founder of Australian TRM firm Intelligent Travel. “All this should occur concurrently. When you have an idea to travel, it should all be connected.”
A former travel manager and member of the Global Business Travel Association’s risk committee, Robert Mintz called the partnership a “home run” for HX. “They have really launched into a serious contender,” he said. “Look at Concur in terms of linking finance data with PNR data — and more accurate location information. That was a really smart thing to do.”
A Niche For One Is A Feature For Another
A career risk management specialist who previously worked for Turner Broadcasting, Crockett said lots of players popped up in the past five years or so because entrepreneurs using an incumbent thought they could do better. Advanced mobile technologies, he said, made it possible for startups to provide apps for local intel and traveler tracking.
“A lot of companies out there now are doing one aspect of TRM,” Crockett said. “Very few can wrap in all of it.” Some, he said, “perhaps were too reliant on technology.” They went to market “too quickly” without realizing the scope of client needs. To succeed, you need to have scale “or have tight strategic partnerships that cover the whole spectrum of TRM.”
Gaining traction is challenging for new competitors. At the same time, for something as crucial and sensitive as TRM, organizations may shy away from less proven startups.
As iJet considers acquisitions, McIndoe naturally watches the players. He said there were at least 30 touting products focused on employee safety and security. “Anyone with even a modest amount of money can whip up a location-based service app,” he said. “The hurdle is virtually nil. The challenge is there is a lot more to TRM than just location awareness.”
Before finalizing the Prescient deal, iJet evaluated four other companies, according to McIndoe. “They all flamed out and had no cash left,” he said. “No longer can a startup drop into the market and start selling, at least to multinationals. There are serious hurdles from a regulatory and compliance perspective. Most companies with resources and wherewithal are pivoting to focus on adjacent areas.”
That’s what Stabilitas did. After a few of its executives last year presented at GBTA, the company shifted its focus to corporate security directors rather than travel management pros. It no longer markets itself as a TRM provider.
Anvil Group managing director Matthew Judge said his company used to be the only TRM firm exhibiting at business travel conferences in the United Kingdom. Nowadays, he said, there are as many as 10. At GBTA this year in Boston, there were more than a dozen. Those new to TRM may be coming at it from a related discipline such as insurance, maritime security or medical assistance.
Like his counterparts at other established players, Judge said tech companies simply plotting “dots on a map” to indicate travelers’ whereabouts isn’t nearly sufficient. Uneducated buyers, he said, incorrectly believe they’ve “ticked the box around duty of care.” Buyers in the know, on the other hand, recognize there’s more to it.
One relative newbie, Alpha Recon, is sticking with it. CEO Toby Houchens acknowledged it’s tough to market “as heavily as some incumbents.” The product itself, and word of mouth, he said, “will be our best marketing tools.”
The company changed its name from Travel Recon and espouses a broader view of risk that has taken hold among some experts. Its new enterprise cloud and mobile software “ties in all the stakeholders,” Houchens said during a May interview. “Everyone agrees there should not be silos.”
“The actual application of this and the willingness to make institutional changes is still far from complete,” Houchens added this week. “Large companies will stick with the status quo approaches until they see other companies gaining advantages. Adopting a new risk management framework can be a large effort and must include several stakeholders.”
The challenge for startups like Alpha Recon, Houchens said, is finding “those first actors” to champion the cause. Prospective partners and customers ask questions like, “How long have they been around?”, “Can we count on it?” and “Do we err on the side of innovating a lot or are we taking too much risk there?”
“We find that early adopters are the companies in segments with the most enterprise risk factors and exposure,” he said. Without naming any, Houchens said “very large corporate clients” are partnering with Alpha Recon. The company plans to start “enterprise-level pilots” in September.
TMCs, meanwhile, “have been slow to adopt new solutions,” Houchens noted. For many, “it’s about branding and perceived value-add.”
Ridley shared a similar observation. “Yes, it is difficult when the customer is uneducated and it’s easy to buy off the shelf,” he said. “There is evidence that marketing and marketing budgets trump substance.”
Additional info: Houchens noted that “several” risk partners will team with Alpha Recon “to address niche client needs.” Meanwhile, the company’s GoRecon crowdsourcing risk platform is expected to launch before year-end.
SafeTravelRx indicated that pilots with TMCs and a GDS will start soon. Formal product launch is expected by year-end. There already is an iOS app. DiLeo said an Android app is coming, as are translation services. AIG Travel Guard provides outsourced help desk support.
Another partnership, announced this week, is between T&E tech company Deem and risk consultancy FocusPoint International. The latter will bring its travel assistance membership program to Deem’s clientele. Membership benefits include health, safety and security information, along with traveler tracking, on-demand support and evacuations.
IJet in June named a new CEO. Succeeding McIndoe in that role, Benjamin Allen most recently served as president for Marsh & McLennan Agency, Marsh Inc.’s global insurance broker. Before that he worked at Kroll, a risk consultancy. In addition to retaining duties as iJet’s president, McIndoe continues as a member of the company’s board.
A Concur spokesperson confirmed that AAI, Anticip, Falck, Dynamiq and Riskline
continue as TRM partners.