After months of speculation, few in the industry were surprised by the sale of American Express GBT, but some were taken aback by its buyer, AI-driven investment company Long Lake Management, and also by the $6.3bn price tag.

The fundamental changes reshaping business travel require deep pockets and yet it seems investors see a market worth backing. This strong appetite was also seen when Navan’s IPO in the US raised a whopping $923m last autumn for its AI-powered T&E solution.

The Amex GBT sale has triggered much speculation and debate about how its business model might change under new ownership and what it signals for the wider sector.

“Corporate travel is no longer a slow-moving category. It’s a capital plus AI arms race between scaled incumbents, high-growth disruptors and potentially new entrants at the AI layer. And for the first time in a while, it’s not clear who wins,” observes Mike McCormick, Managing Partner, Travel Again Advisory.

Industry consultant Martijn van der Voort notes that Long Lake and its investment partner General Catalyst have publicly expressed a preference for sectors considered “operationally neglected: process-heavy, fragmented and ripe for rationalisation through technology”.

“The conviction behind this transaction is real,” he says. “Corporate travel has carried structural inefficiencies that better-capitalised ownership could genuinely address.”

Clive Wratten, CEO of the Business Travel Association, points out: “AI on its own is not a fix-all for efficiency, service or customer experience. Across the sector, TMCs are all looking at how they can use AI in a meaningful way, while still maintaining the expertise, relationships and service levels that clients value most.”

Human intervention

While AI can streamline the booking and servicing process and remove traveller friction, when disruption hits – as the Middle East crisis showed – a tech-only operating model needs something more. It can’t sort the ramifications of sudden airspace closures and flight cancellations when all the anxious traveller wants to hear is a human voice on the other end of a line, 24/7, and to stay on the phone until new arrangements are secured.

Dane Molter, SVP Navan Group Travel Marketplace, claims its virtual assistant Ava now resolves around 55% of traveller queries, allowing human agents to focus on complex support requests.

“Corporate travel is no longer a slow-moving category”

“The opportunity AI is offering is revolutionary and TMCs that don’t holistically integrate the technology into their workflows and products will quickly become obsolete,” he warns.

Mel Quinn, Director of Corporate at Travel Counsellors, believes human contact is still vital. “The key questions buyers are now asking are less about, ‘what platform do you have?’ and more about, ‘who is actually looking after our people day to day?’,” she says.

“Increasingly, businesses want to know they have a consistent point of contact who understands their organisation and can step in quickly during disruption.”

Marrying tech seamlessly with white glove is the goal. TMCs are striving to upgrade from legacy solutions to streamlined data-driven solutions that help solve the challenges of fragmented airline content and the upheavals in the distribution landscape.

TMCs are moving from transactional fulfilment to high-value work, such as VIP services, consultancy and outsourcing, says Eva Fouquet, SVP B2B at Kayak for Business. “As the business travel category simplifies, it means fewer agent touches, which is good news for corporations.”

While AI, data and integrated platforms are the gold standard, there is another big picture change happening too, says Ingrid Sanderson, founder and Managing Director of Principal Business Travel.

“The real development is that corporate travel is now being recognised as an operational function, not just an admin task,” she explains.

Shifting landscapes

Change of TMC ownership is one way of funding business transformation and tech investment, fuelling M&A activity across the whole sector.

Direct Travel absorbed long-term partner ATPI, Good Travel Management and CT Business Travel became Good Business Travel, Amex GBT purchased CWT, and events and creative agency The Human Network snapped up Beyond Business Travel.

“The landscape is evolving quickly, and there’s a real sense of innovation and opportunity in the market right now,” says the BTA’s Wratten.

Katie Skitteral, Group Commercial Director Direct Travel, says the sector is now entering a “genuinely tech-first era”.

“Long-standing challenges around content fragmentation, distribution and clunky processes are finally being addressed thanks to modern infrastructure and APIs which allow the tools and apps to finally speak to one another, instantly,” she says.

“I believe we’re on the edge of significant transformation, one where technology enables more personalisation and seamless, efficient travel experiences for both businesses and travellers alike.”

“The landscape is evolving quickly, and there’s a real sense of innovation and opportunity in the market right now”

While some TMCs sadly haven’t made it, others have rebranded, including TravelPerk becoming Perk, Diversity now DGI, and Beyond Business Travel now Identity Travel.

Some have opted to develop tech solutions in-house while others are partnering with third party specialists.

Domo recently became a strategic AI and data partner for the Advantage Travel Partnership, Meon Travel implemented Lokulus, Lumo and BizTrip AI joined forces for a tech partnership and Direct Travel has been rolling out its Avenir platform, powered by Spotnana.

More recently, there has been a natural convergence between TMCs, tech companies and expense platforms, exemplified by several strategic partnerships including Amex GBT/SAP Concur, Conferma/Mesh, ALTOUR/KAYAK for Business and the recently announced FCM/Blockskye/KAYAK for Business collaboration.

“It’s because clients are demanding more connected ecosystems and fewer operational silos,” says Iya Magen, CEO of Talma Travel Solutions.

The move translates to real-time data and automated reconciliation across the entire programme. Blockskye is also innovating in this space with Blockskye Capture payment product.

Similarly, meetings and events are seen as a natural extension of managed travel programmes as corporates want consolidated oversight across travel, meetings and spend. It’s one reason why Clarity’s two technologies – ClarityGo and MeetingsPro – can now talk to each other, creating a complete travel and meetings experience.

TMCs have also been launching M&E divisions or expanding them, including FCM Meetings & Events which purchased specialist fresh in March this year.

Time for a rethink

Change is coming thick and fast and what does all this mean for the buying community?

Global Travel Manager Katie Gerrahy of Wood PLC sees such moves as a positive. ”We’ve never been short of competition in the TMC sector and I think investment only helps improve standards and accelerate innovation,” she notes.

Consultancy Festive Road is sparking debate with a series of webinars exploring whether buyers should stay, go or rethink, triggered by the accelerated M&A activity among TMCs. Only time will tell if there will be a spate of TMC RFPs.

Peter Snowdon, VP Sales & Account Management at TAG, sees some evidence of this already. “We’re seeing that consolidation is prompting some travel managers to review their programme and ensure it’s still fit for purpose,” he says.

Will the mega tech-led TMCs only be about market share, scale and shareholder value? Gary Povey, COO, Wings Global Travel, believes so. “Consolidation will widen the gap between travel tech providers and true service companies,” he says.

“This is why service models are increasingly being designed around the top 10% of spend, not around the needs of the majority of clients.”

It’s why there may be space for smaller TMCs, believes Principal’s Sanderson. “For us smaller independent TMCs, I don’t see that as a threat if we stand clear about our value. Large platforms can deliver scale, but many businesses still want personal service, accountability and someone who will pick up the phone when travel becomes complicated.”

“Consolidation will widen the gap between travel tech providers and true service companies”

The age of the mega TMC may spark questions over the need for greater financial and ownership transparency, believes Douglas O’Neill, CEO of Inntel.

“The funding structure and ownership model can dictate company culture and decision making,” he points out.

These seismic market changes also give buyers an opportunity to take on a more strategic role. “I think it creates opportunities for travel managers to really demonstrate value to their organisations as technology starts to move them away from operational work to focus more on strategic items. Travel managers need to be brave and embrace the change that’s coming,” says Gerrahy.

Clarity’s Chief Growth Officer Donna Fitzgerald agrees that these industry changes will re-shape buyers into tech-savvy curators, “responsible for selecting platforms that deliver seamless and personalised traveller experiences while maintaining policy compliance”.

It’s time for buyers to step up, adapt to change, and occupy the driving seat.