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Alain Robertson

Alain Robertson

The Future of Business Travel

By Alain Robert, The Travelogist

There is no question that the pandemic has had a chilling effect on business travel. In light of travel restrictions put in place to curb the spread of the virus in April 2020, US airline passengers decreased by 96 percent compared to 2019.

Business travellers are hugely important to the global travel and hospitality sector, spending more than $1.4 trillion in 2018. That’s around 21.4 percent of the travel and hospitality sector’s income.

Since corporate travellers often invest in more expensive and refundable fares, they generate around 55 to 75 percent of many airlines profits while making up as little as 10 percent of their passenger numbers. There is, however, a light at the end of the tunnel for business travel. In light of vaccination efforts and the relaxation of some travel restrictions, the number of business travellers flying has started to increase.

With business travel starting the slow road to recovery, we’ve identified five trends that look set to define the future of business travel.

Risk Management

Prior to the pandemic, around 5 percent of business travellers ranked health and safety as the most important factor when booking a trip. Understandably, that number skyrocketed due to the pandemic, with 64 percent now ranking it as their number one priority, putting it level with price in importance.

In addition, 39 percent of business travellers have stated that they would have a number of concerns that would need to be clarified before they would feel comfortable travelling. In light of these concerns, travel managers will have to transition their role to focus far more on risk management. The development of a new approach to business travel and the connected health and safety issues of travelling will now need to be a primary driver in how travel is arranged. Online self-booking tools haven’t quite all rolled out the artificial intelligence required for border policy and entry requirements for example. Duty of Care will also be central in any new travel program risk management and may require a revamp for some.

The two primary facets of this new paradigm will be a more personalized approach to business travel and the development of a new risk assessment policy.

Adopting a more personalized approach allows travel managers to understand the concerns of each staff member. Given the increased risk inherent with travel during a pandemic, travel managers should also take a more lenient approach to staff vetoing the idea of business travel or bending company policy to stay safe.

Developing a new risk assessment policy gives travel managers a more relevant framework to decide what constitutes essential travel, to implement new policy compliance procedures, and to create new guidelines for high-risk groups that need to travel.

Spend Management

When it comes to paying for business travel, many companies now have several competing priorities.

The desire to resume a face-to-face business environment, in which business travel is vital. Around 60 percent of businesses agree that the majority of deals and decisions cannot be made virtually, while 76 percent agree that being there in person is vital to both HR and sales. However, given the challenging economic climate created by the pandemic, 62 percent of businesses have seen their travel budgets reduced or entirely cut during the height of the pandemic.

Going forward, companies will have to balance these competing elements by carefully considering the value of business travel compared to the organization’s broader business goals.

Greater visibility of spend management through increased digitization and a greater focus on adherence to employee spending policies will be a major factor in the future of business travel as companies attempt to stay solvent.

Cloud Based Business Travel Tools

Despite the greater push for digitization and cloud-based solutions across many industries, travel planning and expense management remains an antiquated area. Around 60 percent of travel managers still rely on excel spreadsheets or pen and paper to track employee spending.

One of the major issues of business travel, highlighted by the pandemic, is the lack of support for fixing issues such as cancellations and delays, that occur while travelling.

These issues are often caused, or exacerbated, by companies using multiple platforms and vendors for trip booking and handling in-trip customer service issues. Implementing end-to-end, cloud-based business travel tools offer businesses the opportunity to combine all the disparate parts of their current business travel process onto one platform.

Streamlining this process offers companies the benefits of greater visibility of their travel spending as well as the opportunity to provide better support for their staff while they are travelling.

Leisure Travel Will Restart Business Travel

While tourism and business travel have always been treated as two separate facets of the travel and hospitality industry, there is one area where they are linked – customer confidence.

Since both leisure travellers and business travellers largely make use of the same travel and accommodation infrastructure, an increase in one could offset the concerns of the other.

Currently, only 14 percent of business travellers feel confident about travel in the future. However, research by Southwest Airlines indicated that once people had experienced their first flight after the outbreak of the pandemic, their comfort with the idea of future travel increased by 86 percent.

More leisure travellers returning to the air and becoming increasingly confident in the safety of their travel options could inform and reassure the concerns of business travellers.

Remote Working Leads to More Business Travel

One of the more obvious changes to how we do business in the wake of the pandemic is the rapid increase in remote working. Measures put in place in response to social distancing guidelines look set to continue post-covid with 82 percent of companies planning to allow employees to work remotely.

Ironically, this dispersion of teams may well lead to a greater emphasis on business travel. Certain types of jobs, such as HR and sales, are simply not well suited to the digital environment.

Around 83 percent of business travellers agree that when it comes to getting things done, meeting in person is more effective. Since teams are now likely to be more geographically distributed, business travel will become vital to facilitating any corporate gatherings (of any size). The “Great Resignation” has also lead ideal candidates asking about what each corporation’s business travel looks like. Many corporations are needing the rethink their benefits package by introducing “BLeisure Travel” as a perk. As competition tightens up for filling vacant positions, allowing an employee to extend their business trip abroad to work remotely or mix in personal time could tip the balance in the their favour.

The Future of Business Travel

While the pandemic may have put business travel on the back foot for the time being, it’s unlikely to have been a complete knockout blow.

The face-to-face business environment is simply too firmly ingrained in corporate culture to be abandoned.

In order to adapt business travellers, travel providers and travel managers will need to reassess the value of travel and the mechanisms that support it.

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