How much is your spare time worth when you’re traveling?
No, not the time you spend having fun with associates or clients at night, or taking in a movie, a ball game, or doing just about anything to avoid sitting alone in a hotel room; your real “spare” time. We’re talking about those extra 10 to 20 minutes after breakfast but before your meetings starts; or those 60 to 90 minutes in the evening when you otherwise would be mindlessly checking out what cable channels are available on the hotel TV system.
Jay Walker thinks that time is worth a lot; to be specific, around $150 to most business travelers. And he’s willing to pay them that much, maybe even more sometimes.
So the man who 18 years ago created Priceline.com and its enormously disruptive “Name Your Own Price” model for selling airline seats and hotel room nights now aims to disrupt the way travel is sold once again with a new company called Upside.
In 1999, FORBES magazine asked whether Walker, now 60, a serial entrepreneur, technologist, inventor and thinker was “An Edison For A New Age?” That same year he made a brief appearance on the list of American billionaires, thanks mostly to the value of his original shares of Priceline stock before leaving the company he founded late that same year.
Now, Walker says his new company, operating currently in beta test mode but scheduled to launch publically in early September, will be the first company to show travelers – particularly business travelers – how to “monetize” the flexibility in their travel plans that they don’t even realize they have.
“What’s going on is that the tech revolution – specifically Big Data, mobile and broadband – is enabling the discovery of entirely new classes of assets that people didn’t know they had,” says Walker.
“The simplest example is eBay,” he says. “All that stuff in your closet that you never could sell? Well, eBay gave you access to a national market for selling much of that staff. eBay created a whole set of assets that you can sell that you didn’t even realize you had.
“Airbnb now lets you monetize that spare bedroom in your home. Uber and Lyft tell you ‘you’ve got this set of assets – your car and your ability to drive - so what if you use your spare time to drive other people around? We’ll direct you to passengers for a share of what they pay you.’ That’s monetizing a previously unrecognized asset,” Walker explains.
Upside plans to do the same thing, primarily, for business travelers. When a business traveler goes onto Upside.com he or she will enter their travel information – when, where, price range, brand preferences, etc. – pretty much like on any other travel website. Upside then will ask a few extra questions about the nature of the trip and the traveler’s time flexibility.
Are they open to staying three minutes away from the convention center to save their company $80 a night and earn a $50 Amazon gift card for themself?
Would they be interested in flying into an alternative airport an hour’s drive from their final destination to save the company $300 while getting a gift card for $200 worth of gasoline?
What about traveling earlier or later in the day to save the boss $150 and receive a $75 restaurant gift card?
The Upside website then will put together one or more airline-and-hotel packages from which the traveler can select. Airline seats and hotel rooms won’t be sold individually; only as package deals. But Walker says all parties involved will be happy with the deal.
“Employees do better,” he says. “They get gift cards to their favorite stores, or Amazon or whatever. And employers will be happy. They’ll capture some of the benefit in the form of 5 percent to 15 percent typical savings on business travel costs.
Meanwhile, travel providers (airlines and hotels, principally) also will benefit, Walker predicts. Hotels located a couple of miles, or maybe a five-minute Uber ride away from popular business travel destinations – convention centers, downtown areas, major suburban office and headquarters developments – now will be able to compete for travelers they previously could never dream of attracting. And airlines will benefit by using the time flexibility many business travelers didn’t realize they had to shift them to less popular departure times, opening up seats on flights at high-demand departure times for those willing to pay higher, last-minute fares.
They key to the Upside concept, Walker says, is that it, for the first time, truly aligns efforts to control corporate travel spending with the personal interests of individual corporate travelers. Frequent flier plans may seek to give business travelers a reason to choose one carrier over another by rewarding travelers with future “free” travel, the payoff for the traveler can be a long-time in coming, and the rewards themselves still mostly are limited to travel services. Upside’s gift cards – the company will launch with gift card deals from a stable of 50 prominent consumer brands in a variety of categories – will give individual travelers quick access to hotly-in-demand rewards and can be spent almost like cash.
For example, a $150 Amazon gift card can be used to buy a new technology gadget online, a pair of shoes (or two), groceries, or even diapers via the giant online marketplace. In effect, that Amazon gifit card can be spent like cash. A gasoline gift card, also represents cash –the cash the user won’t have to pull out of his pocket or purse to fill up at the pump next week.
“All of our gift cards will be worth 100 cents on the dollar,” Walker said. This is not about buying cheap gift cards with limits on them. And it’s not about buying gift cards for merchants that aren’t popular. These will all be attractive cards to consumers. And on every business trip you’re going to get about $150 in gift cards.”
How disruptive can the Upside model for selling travel become?
Well, business travel is about a $300 billion-a-year market, Walker notes. And while many big corporations have stout business travel policies that require the use of preferred airlines and hotels, about $200 billion of that annual business travel still is considered to be “unmanaged” in that those doing the travel aren’t limited by corporate contracts with preferred airlines and hotels.
“The travel industry speaks of ‘managed’ and ‘unmanaged’ travel, but what we’re creating is ‘self-managed’ travel,” Walker explains. “By using technology you can self-manage your business travel to create the most value overall. It allows you to align your own interests with the interests of your company, which is something no one before has really figured out a good way of doing.
“We at Upside are changing the game for companies that put lots of people on the road every year,” he says. “There’s way more upside in trying to get your employees’ interests aligned with the company’s than in handcuffing your employees with travel policy compliance rules. But it will take time for companies to understand and be convinced of that.”
Walker does expect some push-back from some quarters in the established travel industry. Hotels and airlines that use location or dominant positions in local, or hyper-local markets, to charge higher prices in some cases may have to learn to compete differently, just as they did when his first big creation, Priceline because selling “opaque” travel deals to travelers looking for bottom-dollar deals 18 years ago. But, at the same time, Upside will give those same providers the ability to compete for travelers who they otherwise would not be able to attract.
Priceline had its naysayers early on, too, he recalls. “If you don’t have naysayers you don’t have a big idea,” he shoots back. “And some people are going to say that business travelers really don’t have any flexibility. But I already have a very sophisticated answer to that – ‘Baloney.’ It depends on what you call flexibility.”
When the Upside.com website goes fully public in early September, there will be limits on how many air-and-hotel travel packages it will sell in a month. Walker says it will take months for the company to build up the kind of very large and broad inventory of available hotel rooms and airline seats that he expects consumers will demand. As a start-up Upside is shy about taking on too much inventory it will have to re-sell. And travel providers can be expected to be slow in making larger and larger amounts of their room night and seating inventories available to Upside.
And it’ll take a little time for business travelers to figure out what Upside is and how it can benefit both them and their employer.
“But once they discover how great a deal Upside can be, you’ll have to hold ‘em back. It’ll be like fighting to get tickets to see (the hit Broadway musical) Hamilton,” Walker predicts.
