The Big Story brings together a select group of special reports to take a more in-depth look at trends in the corporate travel industry. In this issue, Business Travel Executive investigates the changes in the industry and their far-reaching impact on corporate travel programs and the business traveler.
As COVID-19 slowly releases its stranglehold on the world’s economy and on business travel, the realization has set in: We are all in this for the long haul.
From creating programs and policies that reflect a new reality to negotiating in a marketplace where no one is quite sure what’s coming next year – or next quarter, or even next week, travel post-COVID will be more complicated and more expensive, and it will be harder than ever to measure the real return on the travel investment. To be prepared, savvy travel executives are looking at the future from every possible angle.
Whoever first said “the only constant is change” would be a great fit in today's world of business travel. Things were changing rapidly even before the sudden advent of COVID-19. Since then, predicting what will happen next month – let alone next year or later – has become a risky venture. But looking forward, one thing’s for sure: Flexibility will be an absolute requirement.
Certainly a major, major change can be seen in travel behavior. A June 2020 BCD survey of 100 travel managers worldwide found 6 in 10 respondents expecting the frequency of travel by car (private or rental) to increase, while 85 percent expected travel by air to go down. At the same time, bookings at independent hotels and alternative accommodations were expected to decline by 49 and 45 percent respectively, with staying with friends or relatives expected to become more popular by about a third of respondents.
Such opinions aside, questions abound. At TripActions, enterprise customers of all sizes are asking three basic questions, reports Danny Finkel, chief travel officer. When should I allow my travelers to travel again? How can I ensure the health and safety of my traveling employees? And how can I best control costs?
Obviously, companies need to place even more emphasis than in the past on ensuring travelers are safe when traveling. This includes drilling down on what processes must be put in place to give the company and travelers reasonable access to support when something goes wrong.
“Successful travel management will evolve to be broader than preferred-supplier focus and post-trip reporting to journey managers,” says Lee Thomas, chief operating officer of ALTOUR. “Successful TMCs will become expert consultants to their clients on things like safety and risk management.” Ultimately, he predicts, the best TMCs will evolve to become as indispensable to a business as their law and accounting firms.
The renewed growth of leisure travel may be a positive factor, as not only road warriors but also the general public look to get back out on the road. “We expect that this will help pave the way for the broader-scale return of work travel as confidence grows in the safety and security of travel,” Finkel says.
He predicts that as business travel resumes, we'll see more domestic travel versus international flights to start; more day trips than overnight stays; and more use of personal vehicles and rental cars, particularly in place of short haul flights and ride share options. Over time, confidence should continue to grow in the return to travel, with real-time data on the evolving situation available to travel managers and travelers to assess the safety of travel, along with new safety and hygiene protocols that suppliers have put in place.
Of course new trends bring new challenges. Thomas reports seeing an uptick in car rental and other private transportation, which can make a trip challenging when headed to an especially dense urban area. At the same time, air travel has also become more complex, with the reduction in airline capacity and significantly less frequency to secondary or tertiary cities. “What used to be a simple out-and-back now requires more travel time, which will cause more travel friction for road warriors.”
Systematic Review
Taking a flexible approach also means reviewing opportunities for systematic improvement, says Teri Miller, executive vice president of global client team, BCD Travel. “During this time, where travel is not an option, it’s the perfect time for travel managers to review and re-evaluate travel programs and build strategies to re-engage travelers to be ready for when travel resumes,” she says.
Considering how both an air and hotel strategy might change is a key, Miller notes. Reviewing the former might include understanding the impact of the crisis on the airline industry and assessing the forecast for upcoming months regarding networks, inventory management and pricing. A risk assessment of preferred carriers, as well as analysis of health and safety measures being implemented by top carriers and the airports travelers use the most are also recommended.
Study the way changes in the airline industry will affect the program, including analysis of the evolution of activity and of competition changes (before/after crisis) on the overall program and key markets. A review should also seek to understand the impact of evolution of the competitive environment on your leverage with your preferred carriers. How has your negotiation power evolved, and which alternative airlines are now in play?
A review of hotel programs might include evaluating year-over-year rate changes at the market and property level as well as rate type. In the process, think about whether now is the optimal time to shift to more dynamic rates. “Consider the implementation of rate targets to influence travelers into making smart buying decisions regardless of what preferred rates you are able to secure,” Miller advises.
Partnering with suppliers may also require more diligence. “Buyers will need to evaluate financial health of their suppliers to ensure they have the wherewithal to deliver on the promise for a safe journey,” Thomas says.
Examination of the health and safety commitments of supplier partners will include posing a number of questions. How is the airplane being disinfected? Is there a virtual check-in option at the hotel? What about the cleaning protocols for the rooms? Is there a robust in-room menu if restaurants around the area are non-operational? Can the traveler pick up and return a car without having to interact with a person? Getting the answers to such questions is likely to become more standard in the months ahead.
Perhaps more than ever, ongoing dialogue with suppliers is a must. “The best way to overcome any challenges is through open communication,” Finkel says. “We’ve found all of our suppliers to be great partners, and even more so during COVID-19 as we are all in this together.”
Miller advises getting tools ready before the decision to travel is made – from devising a health, safety and duty of care strategy to building a timeline for re-engaging with suppliers. “Don’t take a traditional approach to sourcing and supplier management this year,” Miller says. “Be dynamic with your requests.” It’s not just about sourcing anymore, she adds. Now is the time to be active in your spend category management on an on-going basis, and consistently engage with travelers to provide transparency and drive trust in your travel program.
While not minimizing the challenges, Thomas sees room for optimism. “Travel managers and travel suppliers are resilient,” he says. “Both businesses and suppliers will make the necessary investments to ensure they maintain their competitive advantage.” That said, the COVID-19 pandemic has taught us that health and safety issues can arise suddenly. “I’m confident that the lessons learned, although they may be difficult ones, will lead to flexibility becoming a core tenet of corporate travel.”
