How the industry and its actors are changing
Covid-19 upended business travel in 2020. Sales fell 50% in 2020 compared to the previous year. Managers have shifted their priorities in response to the pandemic and other geopolitical concerns. New work patterns, economic constraints, evolving population of business travelers, and questions of sustainability are forcing companies to rethink their corporate travel strategies and take advantage of new technologies. Although employees appreciate that remote setups are often just as effective as face-to-face meetings, travel remains a crucial aspect of business. These 6 trends continue to redefine the industry in 2022 and will mark its expected growth through 2023.
The added value of business travel
After a prolonged period of little or no travel, the concept of “business trips” has evolved along with the traditional workplace. Creating and/or reinforcing links between colleagues, clients, and partners in the pandemic environment has become a challenge. Customer relations and client office work have become the main motivation for essential face to face meetings, making up 56% of all business travel in 2021. Trade shows and internal training programs have both dropped to under 10% of business travel respectively, adopting virtual solutions to promote business. Surveyed companies expect to continue to limit travel and prioritize virtual solutions through 2023.
The risks associated with a global pandemic have preoccupied travelers for two years now. As travel resumes, travel managers and their travelers are faced with new risks. Remote workspaces have made corporations responsible for their employees’ risk management not only during business travel, but also within their remote locations. Extreme weather conditions, terrorism, economic risks and cybersecurity breaches are threats that impact corporate travel and need to be managed.
Climate change is in the global spotlight, forcing companies to become more focused on Corporate Social Responsibility (CSR). Be it individual countries, NGOs, or other associations such as IATA, the commitment to a zero-carbon future is growing. Travel managers are more responsible than ever for finding ways to reduce the carbon footprint of business travel.
Travel managers are trying new tactics suchs as reducing travel in general and replacing short flights with more sustainable methods such as rail. Booking direct itineraries as opposed to multi leg stays can make a trip more efficient. Reducing stopovers not only reduces the use of natural resources but avoids the need to book land transportation and hotels. Private aircraft rental corporations such as aeroaffaires.com offer private jet rental solutions for efficient direct “one day travel” with the added benefit of Carbon offset programs directly included in the cost of travel.
New employee expectations
Younger workers are changing the face of the global workforce with Millennials and members of Generation Z set to make up more than 75% by 2025. One of the most impactful ways this growing population has influenced business travel is by prioritizing self-booking. Recent surveys show that 68% of business travel was booked outside of company approved travel agencies (Expedia Group 2021). These employees are choosing to move away from traditional hotel chains to smaller boutique hotels and sustainably motivated options.
Blending business and pleasure travel has emerged as an important result of the demographic shift in corporate travel. Millennial business travelers are adding personal components to their business trips and more often extend business travel for pleasure. The rise of “bleisure travel” has created a new focus on tourist attractions and home-like accommodations such as Airbnb in proximity to business activities.
Travel managers are adopting more flexible travel policies with varied booking options that allow employees to make choices that align with their needs and preferences. Technology now allows companies to adopt a dynamic travel policy that adjusts according to available options at the time of booking. Business travelers can make their own choices while complying with company policy. This encourages a culture of transparency and reinforces the trust needed between employers and employees to effectively resume business travel.
New technology continues to change corporate travel
The adoption of new booking practices and dynamic travel policies creates a need for technical solutions to help simplify and automate invoice payment, reconciliation and time management. Seamless travel management, from booking to expense reporting can be achieved with specially designed software solutions.
Trip disruption technology, automated check-ins, centralized booking and improved mobile connectivity are all adding to the efficiency of corporate travel. Travelers increasingly count on AI and virtual assistants such as Siri or Google to help manage itineraries and local resources for a successful business trip.
Blockchain technology and its built-in security protocol has made its way into the corporate travel industry. Blockchains’s technology facilitates data storage and access, making it possible to collect decentralized data on the entire travel process. Arranged into permanent blocks, this solution offers more security. Travel information is always available and safe from user errors or cybersecurity attacks. Blockchain technology is also useful for luggage tracking, identification services, and customer loyalty schemes.
Globalization and emerging markets
The pandemic has had a lasting impact on supply chain and broader corporate strategies. Companies are moving toward more diversified production solutions in closer proximity to consumption. Business travel patterns are shifting as a result. Travel managers need suppliers that have global networks supported by local operations. New countries are growing in business travel market share. Asia is expected to become the top business travel market in 2022 as India joins China in the top 5 globally. Sweden and Norway are becoming increasingly popular as well. Providing the specific expertise for the needs of employees in each market is essential.
Although business travel has reduced greatly and most employees today are leveraging video conferencing platforms over physical displacement, the continued reassessment of the industry and the trends that have ensued, are inspiring innovation and building the foundation for recovery in 2022 and 2023.