Global business travel spending is expected to hit more than $293 billion this year, according to the Global Business Travel Association, marking an increase of 3.8 percent. For corporations watching those numbers, the employees who are spending “other people’s money” on travel can easily contribute to a bottom line number that eats up a fifth to a third of the average corporate balance sheet. In fact, according to a survey by J.P. Morgan, for most companies T&E is the second largest operating expense on the balance sheet after payroll.
Until recently, keeping numbers in check was the hallmark of the successful travel program. Restrict spending opportunities, tightly manage transportation and lodging funnels, track expenses, and keep an eye on deliverables and ROI and voilà! Success! The comfort of the traveler? That was a bonus.
The Traveler in Charge
Enter the mobile app age and the gotta-have-it-now business traveler over the past decade. Suddenly travel programs had a new category: “going rogue.” Success saw a new line item: the comfortable trip. Businesses were seeing a new kind of traveler expectation flowing into their culture and had a new problem if they wanted to attract capable manpower to handle competitive initiatives – and wanted to retain that talent for more successful endeavors to come.
Gamification became the new buzzword. Employees, many of whom are of a generation brought up on PlayStation and Xbox, were offered badges and digital medals for being good business travelers and staying compliant with travel policies. But digital badges did not hold up against the discomforts of travel that could be solved in a five-minute scroll through an app on one’s smartphone.
“Success is measured differently in the corporate travel sector, depending on who you’re asking,” says Jennifer Steinke, manager of corporate travel at Dycom Industries, Inc. “If you ask a sales team it will be one thing. If you ask the safety or engineering department it might be another. And if you ask the traveler, it will be something else. The biggest uptick in change we have seen in corporate travel management concerns what the traveler is personally getting out of it. A productive experience for the traveler is now more in focus than ever.”
Steinke notes that most of this movement is driven by a new generation of travelers, particularly Millennials who were raised on computers and smartphones and in an environment of instant answers and supersonic satisfaction.
“It’s a younger demo with all this technology at their fingertips empowering them to create their own positive trip experience,” Steinke explains. “In a strong economic marketplace these things can become a factor as these employees go from job to job. In the past, travel managers were keepers of the success of the travel program regardless of whether travelers liked it. But this is now swinging the other direction.”
Sweet Spot of Success
Bringing the balance sheet into a comfortable equilibrium with employer goals and policies on the one hand and employee comfort and efficiency on the other, marks the sweet spot in today’s travel program.
In defining success travel management through ROI, Michael Robertson, vice president, America sales and account management at Egencia, agrees that a happy traveler may now be the key to measuring success. And this quality is becoming ever easier to manage given the leaps in recent technology that not only instantly address traveler pain points but measure and analyze the success of whatever actions the traveler takes.
“When business travelers have an experience that is not only accessible, but also relevant and personalized to their preferences, they are more likely to book in-policy and be compliant with their company’s travel program,” Robertson says. “This enables companies to not only protect the safety of their travelers, which is often of utmost importance nowadays, but they can also drive cost efficiencies that positively impact their bottom line.
The tools travelers have at their fingertips not only make the travel experience easier, they also feed a mountain of information into the program – which in turn allow the process to be further refined. With the advances in technologies and the use of predictive analytics, Robertson says, “Travel management companies are optimizing the experience and their tools, focusing on relevance and personalization for travelers in a travel program. And we expect the experience to improve over time.”
Technology has significantly improved the travel process over the past five years. No longer do travelers have to go through a real person to book a trip, but instead they can rely on a variety of consumer-friendly tools to search for, book and manage their trip throughout the journey; for example, being able to book your trip through an app on your wearable watch.
In the corporate travel industry, chatbots are being used to supplement customer service and provide real-time, helpful responses to traveler questions. Then the in-trip insights and tools, such as airport maps, navigation to your hotel and directions to the nearest gas station for rental car returns, make maneuvering through unknown locations smoother and less intimidating.
“As we look ahead,” Robertson adds, “we see a lot of potential in emerging technologies such as AI and VR. While still in their infancy, investments in new technologies can create simplicity and improvements in experience that will ultimately win over business travelers and drive significant change in the industry long-term.”
According to a seminal McKinsey Global Institute study on the next digital frontier, 66 percent of external investment in AI comes from the US. Thus, Robertson asserts, “We see a bright future for how technology can be used to improve the traveler experience. But we also recognize the need for balance between technology and human interaction, understanding that not all traveler needs can be solved by a chatbot or AI. As we look to the future, we will see efficiencies across the board, but definitely can expect that technology will positively improve managed travel and ultimately win over business travelers.”
Adapting, not Dying
With growing expectations surrounding work-life balance, more business travelers are exploring non-traditional – and potentially out-of-policy – travel and accommodation services, according to an October 2017 study released by the Association of Corporate Travel Executives.
Last year, the survey found 79 percent of managers saw growth in the usage of such services as Uber and Lyft, for example. This year, half (50 percent) saw usage of non-traditional ground transport grow – the same holding true for accommodation options like Airbnb, where some 20 percent of managers surveyed saw an increase in usage this year so far, versus 40 percent last year.
In 2016, just nine percent of managers have included so-called sharing economy lodging options within their policies; this year that number jumped to 22 percent. On the tools front, with apps on the rise, 93 percent of managers are providing or planning to provide trip information apps (89 percent for booking – up from 76 percent) and 81 percent for T&E (up from 67 percent).
But just because they are building them, it does not mean the travel managers will come, says Steinke.
“There are some in travel management who are starting to look at things differently – moving from tactical ticket delivery to platform-based and tech driven services and using these options to take deep dives into data,” she notes. “They know the more we integrate with new technology the better we can deliver new data and drive efficiencies in new managed travel programs. And travelers are leading the way on this with their own tools. But then they often hit a wall and have to go backwards to archaic booking tools. There are a lot of companies unwilling to take a chance just yet and upset their aging models.
”In part, Steinke says the reluctance to update is compounded by the speed at which the industry is evolving. “What keeps a lot of travel managers up at night is how to keep up – there is so much technology and so many deliverables, and then you know there is some kid in a closet somewhere creating something that will totally change the industry – and we become paralyzed.”
The top challenge facing corporate travel managers these days versus, say five years ago, according to Billy McDonough, president FCM Travel Solutions-The Americas, is choice.
“They are almost faced with too many choices and competing voices for their attention. To have a successful travel program, it’s crucial to provide a great experience for the traveler while still providing the company with meaningful and actionable information/data to continually improve their program,” says McDonough.
“Being open to new tools that enter the market, rather than seeing them as a threat, has worked well for us. The travel space is continually evolving and changing, especially in terms of technology and it’s important for us to evolve with it while also making sure we filter through the noise to provide our clients with a tried and tested solution that is dependable. With that in mind, we absolutely strive to adopt the best-in-class products in the market and develop our own solutions where there is a real need.”
Most recently, FCM launched a next-gen technology suite called FCM Connect. The single-sign-on platform provides one simple connection point to all of FCM’s leading technology tools, including analytics, approvals, bookings, security, expenses and mobile – customizable for each company in both configuration of tools used and interface design.
“I honestly think there will be tools we can’t even fathom yet, which will give us efficiencies in some of the more outdated parts of the travel experience. I am excited to see what these will be; I imagine they will be beyond our current scope of imagination and pretty amazing. While technology will continue to advance, sometimes disrupting the status quo, sometimes enhancing the travel experience, I believe that people will always play a major role in the success of managed travel,” says McDonough.
Heart vs. Smart“
We are dealing with people first and foremost,” McDonough continues. “The business traveler relies on us to get them where they need to be and back home safely and efficiently, no matter which tools, apps or systems we use. The travel manager’s roles may evolve over time, but no tool, app or whatever innovation that may exist in the future can replace the empathy and consideration that one human being has for another in the moment when you need it most.”
Still, if success is measurable in segments, increments and movements, the definition of a successful travel program has to percolate through many layers. It is a question that will be answered at one end by the staying power and work-life balance of company employees, and at the other, by an ever changing and ever building database of numbers.
“It’s a great question we ask and one that technology helps us answer,” says Robertson. “In the corporate travel industry, we see data as the new currency because it provides an in-depth look at travel spend through actionable traveler insights. Using predictive analytics, companies can mine and analyze large amounts data at scale to enhance decision making, from driving spend patterns to managing negotiated rates or to preparing for rising hotel costs.”
At the same time, success is qualitative, says Steinke, and always has to be looked at from the perspective of how all the factors – the travel experience, the company goals, the balance sheet, travel policies and overall productivity – are lining up with one another.
“Travel is not the core, it is the vehicle,” she says. “Delivering the value of the program and improving travel experience while keeping the program intact, that is the goal, that is the success,” adds Steinke.
“It is hard to balance living in today’s environment knowing there is a better way. But by just pushing the envelope a little and making demands, I can advocate for change. I still have to do my day job, but I can dream.”
