ONLINE HOTEL BOOKING TREND 6 – 2017: Business travel continues to grow, confuse and excite. Everyone gets excited about the still untapped opportunities in business travel, but it is hard to pin down a great revolution. There are some signs, however, that it is beginning to change faster.
Here are some reasons why we think business travel is evolving and why it is time for a real change.
The consumer need
Bleisure is here to stay.
Nearly all Virgin Atlantic international business travellers (99.5 percent) look forward to business trips and nine in 10 say they always get excited to fly.
Business travellers also want to book and manage their travels themselves.
What is driving change?
Flexibility and the shared economy – the continued evolution of the shared economy and its leading players are having an impact. Corporate company policies increasingly allow for ride-sharing and home-sharing services.
U.S. corporations spent more than $282 billion on corporate travel last year, and the latest data from T&E company Certify says more of that money is going to the sharing economy.
Regional growth – China is poised to overtake the US as the #1 business travel market in the world. It will surpass US in spending by 2017.
Overall spending on business travel that originated in India was expected to reach $33 billion in 2016, an increase of more than 11 percent compared to the previous year.
IATA’s new distribution capability (NDC) challenges the legacy architecture of Global Distribution Systems (GDS’s).
In the legacy structure, airlines have limited opportunities to generate additional revenue through the GDS’s outside of passenger seats. Examples include use of lounges, food, luggage options, preferential seating and more. While the sale of ancillary revenue can be achieved by selling through their own direct booking websites, it is hard to do through the GDS and their current infrastructure. IATA, which represents about 240 airlines or 84% of total air traffic, recognizes that selling ancillaries holds the key to its members becoming more profitable.
And as a large percentage of the Travel Management Companies (TMC’s) which book corporate travel and flights continue to use GDS, airlines are looking for better ways to generate additional revenue.
Emerging customer expectations
“Flexibility continues to be a major priority for business travellers—whether it’s the flexibility to choose which business technology will best serve their needs on the road or the travel itinerary that will best meet their business objectives,” said Susan Chapman-Hughes, Senior Vice President, American Express Global Commercial Payments.
The GBTA business travel sentiment index highlights “Business travellers prefer paying for trip-related expenses with a corporate card (42%) versus a personal card (31%) and feel it is easier to maintain electronic receipts instead of hard copies for tracking expenses.”
The Skift report on corporate travel technology sums up the results of the direction driven by the above changes really well. “Corporate travel is finally starting to learn lessons from the consumer travel space, mostly because business travellers have been trained by their leisure travel to expect robust booking tools and more control over their trips.“
Are they delivering on expectations?
They are certainly working on it!
Airbnb, Uber, Lyft, and others have all invested in creating business travel programmes with enhanced tracking tools and data connectivity with existing corporate booking tools.
Airbnb has announced partnerships with the major corporate travel management companies and booking tools; it’s also begun to tackle possible safety and reliability concerns by certifying listings as “Business Travel Ready.”
Businesses applying this trend
Hotel companies are taking an active interest in Bleisure. AccorHotels has a strategic investment in Squarebreak, which offers “hotel like homes” in France, Spain and Morocco. Accor is also buying Travel Keys, one of the leading players in the private vacation rental market.
There is a new wave of travel technology companies working to tap into the lessons learnt and help travellers manage the entire booking process themselves while staying compliant.
Rocketrip is a travel management tool that provides employees with a real-time Budget to Beat and motivating them to save.
Umapped is a collaborative B2B2C itinerary & experience solution that consolidates bookings, curated content and real-time context-sensitive content into a social tool for travellers. Travellers collaboratively build on their trip plans together, share recommendations with friends & discover curated content.
MagicStay offers private accommodation for the corporate market – a booking platform for short-term rentals dedicated to business travel.
Companies like Travog, an on-demand travel & expense management system with an integrated pre-book policy compliant system through an internal self-booking tool supports a high level automated payment flexibility. Business expenses will be recorded and reimbursed automatically.
Another on demand digital corporate travel solution like TravelPerk helps corporate travel managers to streamline travel quickly and drive business travellers towards compliance and self-bookings.
According to IATA, 15 of the top 20 airline groups (by revenue) including BA and Qatar Airways have either deployed components of the NDC standard or plan to do so during 2016/17.
Trend potential and takeaway
Business travel is big – it always has been. But attempts to disrupt have never really taken off. It is high time it changed and there are some good signs.
Add growth in business travel from emerging markets like China and India, availability of prescriptive analytics and IATA’s new distribution capability to the equation and I’d say the time is ripe for disruption!
Who would have thought Bleisure would have a role to play in bringing disruption to business travel?
Corporate travel management companies are seeing a fair bit of consolidation. Manchester-based Clarity Travel Management and Portman Travel are to become one business following the acquisition of Portman Travel for an undisclosed fee.