Transforming Corporate Travel: A Conversation With Steve Singh and Christal Bemont

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Today, Madrona Digital Editor Coral Garnick Ducken chats with Madrona Managing Director Steve Singh and Christal Bemont, the CEO of Direct Travel, Madrona’s newest portfolio company. Over the last few years, Steve has been seeking out companies that are transforming the corporate travel ecosystem with the goal of delivering a dramatically better value proposition to business travelers, the companies they work for, and the travel providers that serve them. The acquisition of corporate travel management company, Direct Travel on April 2nd is the fourth pillar in Steve’s vision, and that’s what these three dive into today

This transcript was automatically generated and edited for clarity.

Coral: So, to kick us off, Christal, why don’t you walk us through how this new venture is going to work?

Direct Travel: Transforming Corporate Travel Management

Christal: Sure, I’d love to. I am absolutely thrilled to be partnering with you again, Steve. We spent many years at Concur, and you’re also a very dear friend, so thank you for this opportunity. As you mentioned, we recently announced that there was an acquisition of Direct Travel, and Steve, you were a critical part of that, as I know Madrona was as well, along with a number of other renowned investors. I’m very excited about serving as the CEO and having you as the chairman on this. This is an exciting adventure that we’re headed into. For anyone who doesn’t have a lot of background in travel management companies, I’ll get into Direct Travel. A travel management company works with corporate travel businesses and focuses on companies with a managed travel program.

What that means is that there’s usually a group of individuals that sit within a company who have oversight of the safety of their travelers, the spending of the program, and making sure that they optimize the travel experience for their employees. And so essentially what that means is there’s usually a group of individuals that sit within a company that have oversight of the safety of their travelers, the spend of the program, making sure that they optimize the travel experience for their employees.

This managed travel space is something that’s been around for a very long time.

And so essentially what that means is there’s usually a group of individuals that sit within a company that have oversight of the safety of their travelers, the spend of the program, making sure that they optimize the travel experience for their employees.

Direct Travel has been around for many years. They are the fifth-largest corporate travel management company in North America, focusing on mid-market and enterprise customers. Let me give you a couple. Cirque du Soleil just announced that they are going to move forward with Direct Travel. Topgolf is another example, a Chick-fil-A here in Atlanta where I’m at.

If there is something I can say that stands out that’s most unique about Direct Travel, it is our customer service. That comes down to the people at Direct Travel. So the people at direct travel are working with customers who, in some cases, have been customers for 30 years.

So, what are we here to do at Direct Travel? There is a $1.4 trillion business travel market. We see Direct Travel as a critical component of doing a few things: providing incredible value to business travelers, making sure that those business travelers can support the companies that they’re working for, and making sure that we support and take care of the suppliers that take care of that ecosystem.

We feel that there’s a great opportunity and even responsibility for making sure that we show up with the incredible service that we’ve always shown up with and also making sure that we bring some of the new technology that I know Steve’s going to talk in just a moment about to the forefront.

Coral: Steve, before we dive into Direct Travel and how it fits into this tech stack that you’re envisioning, perhaps you can detail the challenges business travel has today and what you thought needed to be tackled.

The Challenges of Modern Business Travel

Steve: Before I delve into that, I want to touch on a few things Christal said. There are times in life when you get to work with amazing people, and while it’s always wonderful to do great things in life and create great businesses, it is all made incredible by the people that you work with. And Christal, I feel you have no idea how happy I am to work with you again. And obviously, the other members of the team as well: Todd, Scott, Christine, and John Coffman. These are incredible human beings, and that’s what makes life just a blast.

When you think about the travel industry, this is a multi-trillion dollar industry. There isn’t a business person who isn’t touched by it or who doesn’t take business trips. This is a very antiquated, fragmented technology stack that serves this multi-trillion-dollar industry. Whether you’re talking about the distribution of content, which is the GDS layer or global distribution systems, or online booking tools or mid-office tools that are predominantly provided by Concur, but other companies such as Neko and Dean. Or you’re talking about the integration into the back office. All this stuff is an aging infrastructure. More than that, these are closed systems, which basically means that you’ve got fragmented data and you’ve got disjointed travel experiences — and that’s not a great recipe for delivering delightful travel experiences.

So, even today, basic things such as integrating into a traveler’s calendar, providing access to all the travel inventory that we want to consume, predicting the needs, providing proactive and intelligent responses to travel disruptions, or, frankly, just simple change requests. Things like checking into the hotel at the ideal time, seamlessly integrating ground transportation into that travel experience, or, ideally, eliminating the concept of the expense report. These are just ideas. We’re sitting here in 2024, and they’re not a reality. And you have to ask yourself, well, why aren’t they a reality? And by the way, that’s normal business travel. The problem is even bigger when you think about group travel, which, by the way, almost every element is manual. It’s typically Excel spreadsheets and the like, but it’s manual.

I’ll just add one more thing about the legacy systems. I think what makes it even worse is that because they’re closed, the level of innovation that you can drive on top of these systems is very, very limited. I would argue that, at best, it’s limited. So, take one step further, advanced concepts like transparency at the point of purchase between the traveler and the suppliers to serve them — that’s completely non-existent and can’t even be enabled on the legacy infrastructure in the industry today. This is a big set of challenges. Now, we’re fortunate that these can be solved with modern cloud-native architectures. Frankly, it’s not just technology; it’s an open platform mindset that’s also critical. Anybody can build technology, but you have to take this mindset that we’re going to be open, that we can allow others to innovate, and that all of us can benefit from the work of others.

Coral: So now that Steve has set the scene a little bit. Christal, I’m sure you remember Steve coined the term “The Perfect Trip” while you guys were together at Concur. Why don’t you tell us how that concept came about, and what that concept really meant for you guys?

The Perfect Trip: A Vision for Seamless Travel

Christal: It is something that I’ll never forget, and I really mean that. It’s a feeling and an experience when it happened many years ago that just made so much sense. Maybe the best way to frame it, in my opinion, is that it’s something that you never stop the quest for. There’s never going to be a perfect trip because there will be things outside of your ability to control them. But, even as we were thinking about it back then, and as Steve presented i, it really was about everything that goes into the minute you start thinking about taking a business trip to the point where you’re back home. What is that connected experience? How do you take care of the travelers who are such key employees? What are all those gaps or things that could be disrupted that we can anticipate, and how do we get ahead of them?

Look, we all know that travel is a massive grind. It’s probably the least enjoyable thing. People think that travel is fun and all these great places you go. You just groan at the idea of all the things you might encounter. So, back when that first came up, it was an exciting proposition about looking at the complete picture. At the time, I was looking at it, and many other employees were looking at it in a lane of a few critical things we could do. When Steve took those blinders off and said, “Hey, this is really about us showing up from the moment someone thinks about it and every step of the way to the moment when they return home.” There were limitations back then in terms of what we could do, but now I feel it’s why you hear this deep passion from me about wanting to be on this journey again. Because I feel like we’re in a much different place and have a much bigger opportunity to solve some of those things. And I know Steve, you just mentioned a few of them, but I don’t think you ever stop on the quest for the perfect trip. It’s a responsibility we have. And when you’re in this industry, you just see so much opportunity, and I feel like we’re at a perfect time to embrace it.

Coral: So, I know, Steve, from talking to you before that there was a time when you decided, okay, this perfect trip is not going to happen. You’d have to reimagine all these foundational elements of these closed systems that you just explained to us. Why don’t you tell us about that first meeting with Sarosh at Spotnana, when you realized, “Oh wait, maybe we can still do this. Maybe transforming corporate travel is possible.”

Spotnana: Building the Next-Gen Travel Platform

Steve: This speaks to the mindset comment I made earlier. First of all, I also believe in karma, by the way. I had not prioritized meeting Sarosh even though he had reached out to me multiple times. When I did spend time with him and listened to what he was trying to do, I kicked myself for not taking that meeting earlier. He’s just a wonderful human being who also has incredible experience in the travel industry, and, frankly, he has a great technology vision. The part that spoke to me in that meeting was that he understood that there are lots of different ways to build a next-generation travel company. One is to do a better job than the last one, like Concur, and go build something that is Concur 2.0. To me, that’s not interesting. Because all that happens is there’s incremental improvement in the experience. Maybe there is a slightly better user interface.

What Sarosh was talking about displayed a level of understanding around why some of our travel experiences are disconnected or disjointed. Or why the customer service experience is so poor. He said, “Look, the thing I want to go focus on is I want to fix the plumbing of the travel industry.” And we spent a bunch of time defining what that is. What does that mean? What is the plumbing of the travel industry? And what he was really talking about was, that we have to have a data model. It is a little bit geeky, but we have to have a data model that is broad enough to encompass a modern definition of what business travel really is.

We have to have an open system that anybody can build on, that anyone can extend that data model. We also need to be able to allow the supplier to know who the buyer is at the point of purchase so that the two people who are the most critical elements of the trip can collaborate in a way that ends up being a better outcome for both of them. As we aligned on that vision, I quickly changed my mind about wanting to invest in the travel industry again, and I said, “Look, I mean when you find people like that, you want to support them, and you want to help them deliver on their vision.”

And, we’ll talk about Naveen and Dennis shortly, but this is the same thing that’s true with Christal. You invest behind incredible human beings who also are solving some very, very big problems that make the experience dramatically better for you and me as consumers of those experiences. So, that meeting with Sarosh led to us investing in Spotnana, which was building out this open platform that could be consumed on whatever services a client of Spotnana platform would want to use. It was built on the idea that there’s transparency between the traveler and the supplier.

And, that was back in late 2019. We went through COVID-19, and that was a difficult time for all of us, for every member of the travel community. But here we are now in 2024, where Spotnana sits. Some of the biggest customers in the world — companies like Amazon — have moved to the Spotnana platform because they want all the content. They want serviceability on NDC; they want open, extensible platforms they can build on that others can build on where they can benefit from that innovation. But it’s not just customers. Suppliers — American Airlines, Copa Airlines, Qantas Airlines, and Marriott Hotels — these are some incredible names in the travel industry, and you’re going to hear more in the not-too-distant future, have decided they want to partner with Spotnana. They are partnering with Spotnana, right now, on this concept of NDC. I want to spend just two seconds defining what NDC is because most people are going to say, “Well, geez, NDC has been around for a long, long time.” And it has. But just because it’s been around doesn’t mean it’s been useful. It hasn’t been used because buying the content is one thing. You also want to provide service on the content should the traveler ever need servicing. And what Spotnana figured out was how do you actually, in this new technology stack, how do you take content from the GDS and content directly from the supplier and provide the technology capability to provide service on top of that content regardless of where it came from? That was a game-changer. That’s what allowed Spotnana to be incredibly valuable as a next-generation platform.

So great customer adoption, great supplier adoption, but there’s also another piece that they really executed well on, and that is a testament to the fact that they’re an open platform. They’ve gotten other leaders, companies like Center, which obviously delivers an expense management platform. Center is integrating at the travel policy and travel profile level. So you don’t have to replicate this if you happen to use both services. Troop is extending Spotnana’s services into the group meetings and events arena. Direct Travel, obviously, as we just heard, is integrating all three of these services in combination with their own and all the data that they have on their customers to deliver a highly personalized travel experience.

So you’re seeing Spotnana become this open platform that’s being adopted aggressively across the industry. And I think that’s going to lead to not only better experiences for the traveler and for the supplier but, frankly, a new generation of technology companies in the travel industry that will define what this industry looks like in the decades ahead.

Coral: So with Spotnana, that’s resolving this poor plumbing issue that you’ve talked about. And then, of course, you just mentioned Naveen and Dennis, which is Center and Troop. So why don’t you talk briefly about each of those solutions and how they fit into this travel stack that you envision for transforming corporate travel?

Integrating Solutions: Center & Troop’s Role in the Travel Ecosystem

Steve: It was critical to get the travel infrastructure right, and that was the Spotnana platform. But, it was also just as important that other core services that were required to deliver a delightful travel experience were also reimagined and reinvented. And so, one of them was the expense report. Christal and I certainly know a lot about this market segment. And I would argue that Concur did a lot to go from the concept of paper-based expense reports. I don’t know if most people would remember this, but it wasn’t more than 20 years ago that all expense reports were done on Avery forms. Well, now we should be thinking about this and saying, well, why does the concept of the expense report even exist? Why can’t it just go away? Why can’t it just be automatically, effectively created in the course of my business travel?

And turns out that that’s possible, but you have to reimagine the technology landscape to do this. And so Center really said, “Well, look, we can build a tech stack that integrates all the way down to the card processing layer.” So, at the point of swipe, we can pick up all the information we need to process that expense report. In fact, through a range of AI services that are also built into the stack, it can actually go from swipe through approval, through audit, and then integration into the GL, typically in three seconds or less. Literally, the concept of an expense report is now just a swipe. So, as you’re using your card, you’re actually creating the expense entry. And that fundamentally changes the user experience. But more than that, they innovated further and said, “Look, we’re going to integrate this with financial products like the corporate card.” So, even the economics of what an expense reporting company looks like are fundamentally different.

So now, let me move over to troop. I met Dennis, the Troop CEO, a number of years ago. We had this view at Madrona that there has to be a better way of planning, booking, and expensing group travel. To be far, so that everyone understands, group travel is about half of the corporate travel industry. This $1.4 trillion number that you sometimes hear — about half of that is group travel. All of that group travel is manual. And our view was that we could bring a level of automation and better client experience to business processes the same way that Spotnana is driving a better experience in individual travel in the same way that Center is driving a delightful experience in expense reporting. And so we invested in Troop. This is much like Spotnana many years ago — Troop has spent the last few years really building out the technology infrastructure to solve for the planning process, the booking process, and the expense reporting process.

There are a couple of things within that that, I think are a further testament to this idea of an open platform. You can plan group travel within Troop, and we’ll manage your itinerary at group itinerary, by the way. So you can see when are your colleagues arriving, what’s the group itinerary for the entire trip? But not surprisingly, when you book, there are API calls into Spotnana to do the booking, and you don’t even know it. It’s just completely seamless. When you file the expense report, not surprisingly, it’s Center that’s doing all the expense reporting. It’s all seamlessly done and integrated into the process. And to me, this is the modern example — this is how modern applications will be built. You’ll consume services from the best-in-class providers of those services. In the case of expense reporting, it’s Center. In the case of group travel, it’s Troop. In the case of core travel infrastructure and individual business travel, it’s Spotnana. All are seamlessly integrated. And then, obviously, we’ll talk about how that’s integrated into Direct Travel, but these are incredible companies that just expand the value proposition.

Coral: Perfect segue, Steve. So we have Spotnana, that layer that everybody can build on top of now. Troop is going to manage the group travel side of things, and Center is going to take away these pesky expense reports that we all just love doing. So then, Christal, why don’t you tell us how Direct Travel fits into this vision of transforming corporate travel and what your vision is now that you’re CEO.

Transforming Corporate Travel: Direct Travel’s Strategic Vision

Christal: It might be helpful to give a little bit of the landscape of the different types of travel management companies. It’s kind of split down the middle. There’s a smaller group that approachs it from a service and very heavy agent perspective. It’s built on technology that’s somewhat antiquated, closed — very much like what Steve just described, these kinds of aging travel infrastructure. So traditional travel agencies that you might be familiar with that just very much a lead with service and working off of this older, aging technology, which is a disadvantage for them and their customers. And then you have another group of companies that really lead with technology, and they think about the technology standpoint and really just have, in many cases, a technology-only view and then maybe the very far second or distant second is the servicing.

So, if you take what exists out there in the ecosystem today, you take really two very different types of approaches. I think this goes back to the point that I was making earlier about why Direct Travel as this acquisition and it’s pivotal to the way forward is — it’s not just about the technology. It is also about the service, but you have to have exceptional technology and service combined. It’s the perfect coupling and curated set of technology that Steve mentioned before, but the very first time that the three technologies will come together seamlessly in a way that’s serviced as seamlessly, and in a way that, from Direct Travel’s standpoint, allows us to really show up for our customers. These are big changes for customers. These are things that really evolve what it means to partner with a travel management company like Direct Travel.

Being able to bring the technology is certainly part of it, but being able to service the technology as seamlessly and as carefully as we have in the past, but on this new tech stack is really, really important. So that’s No. 1 — bringing that together in a way that’s very fluid and very seamless for our customers. Steve also touched on something that’s really important, and it’s about data. It’s about being able to provide insights to not only our customers. We think about what managed travel means today is likely to change in the future in terms of the way that people think about the programs they have set up. We will be incredible partners in the ability to leverage the data that we have, the insights to help our customers along the way and making sure that they evolve as programs and as new opportunities change.

But the same thing goes for suppliers. Being able to really work with our suppliers to make sure that we provide personalized information and information that really is the reason why NDC is so important right now. Being able to get suppliers and personal offerings to the travelers, connecting those things. And the last one, we’ve already talked about, but i think it’s important to reiterate. It’s about the open platform and the continuous innovation — it’s not just about the innovation that we will certainly set out with AI and some of the other things that we’ll be doing with building on top of the application stack that Steve just talked about. But it’s about being able to provide value to our customers by having an open platform that others can innovate on top of as well.

We feel like when people decide who they want to partner with from a travel management perspective, it’s going to be a partner that evolves with them, leads the changes in the market, and makes sure that we can not only provide this best-in-class open architecture technology that brings all the benefits that Steve just talked about. We can do that and work with them on service, and we can continue to evolve as their needs evolve and even lead some of those changes in the future as well. Going all the way back to that perfect trip, each one of these components is critical to us on this quest of really trying to fully realize the perfect trip. It is putting them all together very carefully and very thoughtfully so that our customers and their travelers can benefit from it.

Coral: So as we’ve talked about all of these different pieces and how it all is going to fit together, Steve, when are we all going to be able to live this life of the perfect trip?

Realizing the Perfect Trip

Steve: Well, first of all, you can see why I’m so excited to partner with Christal again. I think that the mindset and the team that tends to follow Christal is really what will allow what are great ideas to become a reality. So, I’m very excited about the next five years. Now that said, let’s bring it back to today. What Christal and the team I know are working on is standing up this new stack of Spotnana, Troop, and Center on the Direct Travel platform. Everything from our core systems that run our business to how we provide service to our customers. We expect to be done with that in the summertime period. We plan to actually showcase integrated travel and expense offerings, plus what our group travel offering might look like at GBTA in Atlanta. We are looking forward to any customers who want to stop in an see the products that we’re building. We’d love to have you join us.

We think that sometime in late summer to early fall, we’ll be shipping our first sets of products. Now that said, one of the things that I love about Christal and the team that she is working with is that’s version one. And there’s an ongoing innovation cycle and an innovation mindset that makes this incredible. So, literally every single month, you’re going to see new functionality being delivered and new services that we will make available to our customers. So very, very excited about what we can do together in not just delivering a perfect trip but, frankly, reinventing the business travel industry to be far more customer-focused, far more supplier-focused, and just a more streamlined industry.

Coral: Well, I know that all of us business travelers are going to be eagerly awaiting this, and we could keep this conversation going between the two of you, I’m sure for hours. But why don’t we go ahead and stop there? I want to thank you both so much for joining me today.

Christal: Thank you very much.

Steve: Thanks for having us, Coral.