Post-pandemic, the business travel industry was predicted to witness exceptional growth. Industry experts claimed a whopping investment of $1.4 trillion and a full recovery to the pre-pandemic levels by 2024. However, the unexpected economic slowdown may have altered its course.
The current global economic situation is less than ideal. According to a study published by the International Monetary Fund (IMF), worldwide economic growth is forecast to slow down to 2.7 percent in 2023 from 6.0 percent in 2021.
But what does this slowdown mean for the business travel industry? Are companies planning to save operational costs by putting business travel on the back burner? If not, what other travel cost-saving strategies will companies plan in the upcoming year?
To find data-based answers to such crucial travel-related questions, ITILITE conducted an in-depth survey with more than 50 customers and prospects. Our primary objective was to figure out the current mindset of companies about business travel. We also wanted to see what our customers are doing to combat the emerging challenges in corporate travel.
We have created a 3-part blog series taking you through what companies are planning for their business travel in the upcoming months, the ways to improve the travel ROI, and what kind of technological aid they expect from their travel partners.
Here are some findings from the survey:
Despite the global economic slowdown, companies are not planning to reduce business travel volume. Instead, they are looking for ways to derive more value from each business trip by fixing cost leakages in the travel process.
So, the main question they are currently asking is – how can we optimize travel costs without decreasing the number of business trips?
We also found that our prospects are looking for ways to configure more granular policy guidelines and implement stricter approval workflows with the help of technology. Through this, they want to optimize travel costs without cutting corners.
Therefore, 70% of our prospects have demanded automated “hard approvals” for all travel requests.
However, companies are also ensuring that policy changes do not happen at the expense of travelers’ wellness. Hence, they are not implementing travel practices like increased red-eye flight bookings or tighter budgets.
Instead, they are implementing policies that accommodate travelers’ well-being. For instance, companies are nudging travelers to make early flight bookings. The number of early flight bookings on the ITILITE platform increased from 40% in Jan-Jun 2022 to 63% in Jul-Nov 2022. As a result, the companies saved more money, and the employees earned more early booking incentives.
Companies are seeing business travel as an investment instead of an expense. Hence, they aim to increase the Return on Investment (ROI) instead of striving to reduce travel costs. They are adopting practices that maximize the business impact of each trip without increasing the overall cost.
Here are some ways in which companies are targeting higher travel ROI:
Companies are looking for greater visibility on travel spending and reimbursement data to ascertain an absolute amount spent on each business trip. With this data, they can calculate the travel ROI.
Hence, they are moving towards an integrated T&E system like ITILITE that can give visibility of all travel spending and reimbursement data at a trip level in one place. The demand for travel and expense integration has increased from 40% during the first half of 2022 to 70% in December.
Companies are looking for a feature in their travel management system that requires travelers to report the business outcome they can deliver from the trip while requesting it. Most C-level executives we talked to were happy to invest in high-end trips if it meant that the traveler would bring back an equally significant amount of business deals.
This was a brief summary of our findings from the survey. We have come out with 2 more blogs containing other useful insights. You can check them out to learn more about the business travel ROI trends in 2023.
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