Obviously, the recession is changing the travel business. You’ve heard it all before – and if you’ve flow or stayed in a hotel lately, you’ve undoubtedly seen it. Sometimes, the big issue of the day can mask others that will be important down the road. Travel industry research firm PhoCusWright has identified seven trends in the travel business that you’ll want to keep an eye on. These are the factors that will have a long and profound effect on the business of getting suit-clad travelers from Point A to Point B. And, let’s face it: these are the people who matter most to travel and hospitality businesses.
“We have identified seven essential trends with the potential to shake corporate travel management to its core,” said Susan Steinbrink, PhoCusWright‘s senior research and corporate market analyst. “Ranging from the environment to videoconferencing, supply chain management, mobile services and more, these trends are poised to impact the amount spent on travel, alter corporate purchasing priorities and touch every player in the corporate travel landscape, including suppliers, TMCs, technology providers, credit card companies, and of course the corporate traveler.”
1. Managing the “Triple Bottom Line”
The “bottom line” is easy enough to understand: that’s the profit a company earns for all its hard work. But, two more bottom lines have entered the corporate lexicon, involving the environmental and social implications of how they operate. With more businesses committing to corporate social responsibility – and even hiring professionals to plan and manage these efforts – expect to see businesses that send their employees on the road to start considering the environmental effects of doing so. After payroll, travel and expense (T&E) is the second largest controllable expense in the business world, and air travel is responsible for 7 percent of the world’s carbon emissions. This is an area ripe for corporate action.
2. Integrated travel booking and expense management
Webs of partnerships have arisen, making it difficult for corporate travel buyers to get a single view of where and how travel dollars are being spent. Acquisitions and alliances are reshaping the booking business and will ultimately deliver a seamless solution for tracking and managing pre-trip spending through post-trip reconciliation and evaluation. With every budget dollar being watched closely, this is a natural result in an expense-sensitive business climate.
3. Tracking the travel supply chain
Businesses investing in travel for their employees are watching the data more closely, a trend that will only gain momentum, according to PhoCusWright. Buyers will start to watch every aspect of supplier relationships, looking for ways to increase collaboration and reduce costs. Metrics will reign supreme, as decisions that can be quantified can make a company’s cash more productive. And, incentives and penalties for expense management can be brought to bear on employees.
4. Switch from the trip to the traveler
An abundance of data will cause travel companies to look past the transaction, which has been their major focus to date. A wealth of information available now enables travel suppliers to examine consumer behavior more closely, providing insights that can lead to future opportunities to maximize revenue (a situation that these companies need desperately right now). As airlines, hotels and other travel companies learn more about you, they can do a better job of selling to you, ultimately leading to better financial performance (and possibly increased traveler satisfaction).
5. On your devices
Seventy percent of business travelers are using internet-enabled handheld devices, making mobile a promising channel for both sales and customer interaction. Enhanced technology will improve multimedia over the device-driven internet and improve payment systems. These developments will reshape how the traveler interacts with the service provider, challenging existing habits, loyalties and tolerances.
6. Skip the trip
Expense management has pushed travel spending downward this year, and memories of this recession won’t fade easily. Alternatives to travel – including conference calls and video conferencing – are increasing in popularity and should continue to erode travel spending.
7. Little guys become big players
Smaller and medium-sized businesses spend plenty of money on travel, but they tend to lack the resources to centralize the purchasing and management process. As they seek to control travel expenses, many will turn to hosted and integrated travel booking and reporting systems to help them find inefficiencies and save some cash. As this happens, the opacity of this sector will melt away, giving travel companies a better view of how to service this high-value segment of the market.