In 2022, businesses were hoping to go back to work and, therefore, to business travel. But the economic slowdown decelerated the return to business travel. It is a known fact that whenever there is an economic slowdown or a budget cut, travel spends are the first to be affected, and travel volumes go down. However, this time around, the industry saw different trends.
We found that there was no significant drop in travel volumes; rather, companies were looking at ways to optimize travel costs. So we dug in a little more and spoke to industry experts to find out the emerging trends. We discovered some interesting trends in business travel, so we invited Neil Blaauboer, Ex- HRG, President at TRVL UpSource, to join us in this webinar to hear his thoughts, and here is what we found:
1. Bringing a Culture of Early Bookings
Not just from a cost point of view but also from an availability point of view, if you wait till the last minute, you may not get a place in your preferred flight/hotel. You will be in a “take what you get” situation. The pandemic has led to an increased emphasis on advance planning among travel managers, with many now turning towards a more pragmatic approach. Given the economic climate, employees are also mindful of the company’s expenses. One way to encourage early bookings is to utilize technology and tools that allow for efficient booking without a significant amount of administrative work. The benchmark for domestic travel is around 7-10 days prior to travel.
2. Leveraging Contracted Rates with Partner Companies
In the past, SMEs often did not have a dedicated travel manager. However, as the industry has evolved in the wake of the pandemic, an increasing number of SMEs are placing greater emphasis on managed travel. Companies know they have to travel, so they want to lock the rates early on. The demand to lock the preferred rates is increasing. TMC contracted rates are just as important as they have ever been.
3. Strict Policy Enforcement without Compromising Employee well Being
Companies are more vigilant about policies being followed. They are increasingly seeking to shift from open bookings to managed platforms in order to implement policies effectively. There has been a shift from a growth strategy to a profit strategy. As a result, there is a higher demand for enforcing hard approvals now. For example, pre-trip approval has become a mandate for many companies trying to save costs. Despite these facts, there is more recognition of employee well-being and traveler well-being. Companies are not saving costs at the expense of their employees.
4. Better Visibility and Higher ROI
Travel program has become important to the revenue teams as business travel is expected to maintain revenue from the clients. Companies are conscious of the money they spend; they want to make it count and measure what impact is created. All of this is possible when you have visibility into the right numbers. For example, if someone is going for a sales meeting, then they are asked how many sales meetings they would attend in one trip, and if it is one meeting, then how big a deal is that? That is why our platform also asks “purpose of the trip”
Technology in combination with data can help companies understand the true ROI of business travel. As a matter of fact, companies are moving from rejecting high-cost trips to now rejecting low-ROI trips. Today companies need TMCs that can help them with data to predict spends based on reliable intelligence rather than just looking at past data from spreadsheets.
5. Sustainability
It wasn’t long ago when sustainable business travel meant cutting trips to reduce greenhouse emissions. Companies would want to be a part of the sustainability initiative to the extent that some of them would even project the illusion of being green activists. But now things have changed. Sustainability for travel is at the forefront. It is no more a concept.
With the economic slowdown, it was expected that the push on sustainability was going to slow down, especially for the SMEs, but that’s not been the case. In fact, earlier, it was a compulsion for large companies rather than a necessity, but now companies across are jumping onto the sustainability bandwagon.
We are not necessarily seeing travel being cut; we are seeing growth but not at the pace we expected. However, there is still going to be business travel, and it is going to recover soon. The value of face-to-face interaction is ever-increasing which is relieving for business travel.
