Corporate travel managers need to balance delivering service and cutting costs
Travel management priorities vacillate between savings and service, but new research suggests that organisations now expect both. The challenge for travel managers is heightened by changing travel patterns and booking behaviours, and duty of care complexities.
The latest Association of Corporate Travel Executives (ACTE) analysis, conducted in in partnership with American Express GBT, shows that the current policy environment is overwhelmingly shaped by savings.
Over half (52%) of ACTE's respondents confirm that saving money was the primary driver of travel policy in their organisation, with fewer than a quarter (23%) driven by duty of care and 16% of policies shaped by efforts to improve the traveller experience. Allan Leibowitz reviews the results.
- Travel management priorities are shifting towards a focus on both savings and service.
- Travel managers are looking for innovative ways to contain costs, such as demand management and improving compliance.
- Traditional suppliers and booking channels are being challenged by the growth of the sharing economy.
- Concerns about duty of care and safety are still a barrier to adopting sharing economy services.
- Technology, particularly mobile solutions, is a key focus for travel managers to enhance the travel experience.
- Travel managers need to adapt to changing demands and embrace new technologies to remain relevant in the market.
Corporate travel managers need to innovate to contain costs
Travel managers globally have been successful in delivering savings by tightening policies in key areas. They have also been assisted by a relatively stable pricing environment.
However, much of the low-hanging fruit has already been picked, and any future gains will require stronger demand management (taking fewer trips, reducing duration and opting for cheaper fares/rates) and improving compliance.
According to ACTE, almost half (45%) of the travel management community believes there is little scope left to achieve savings from negotiated deals. For most (84%), winning savings over the next one to two years will come from controlling internal aspects, signalling a major shift - from controlling supplier costs and towards managing.
To download a copy of The Evolution of Travel Policy: A Global View on the Future, please click here.
The need to focus on booking and traveller behaviours is supported by a recent study by Concur and GBTA that found business travel programmes are being undermined by travellers booking through unapproved channels.
The study found travellers bypassing online booking tools and going direct with a supplier or using an OTA site.
Against that backdrop, travel buyers want their travel management company (TMC) to not only save money, but to improve on data analysis, measurement and reporting.
The sharing economy impacts on booking processes
Traditional suppliers and booking channels continue to be challenged by the growth of the "sharing economy". A recent Carlson Wagonlit Travel (CWT) report cites the sharing economy as one of the major forces shaping travel programmes, as many travellers use services such as Airbnb for accommodation and Uber for ground transportation.
"The barriers to adoption in managed travel are coming down as sharing economy brands adapt their offerings to the managed travel market, tackling safety/security and expense management issues," according to the CWT study.
CWT warns that the sharing economy is not a fad, but a robust trend that is transforming society and business models.
CWT clients are seeing increased adoption of these non-traditional suppliers and a number of new features are making it easier for companies to integrate sharing economy options into their programmes, based around billing, reporting and expense management.
Travel managers' concerns about sharing economy
Duty of care concerns are often given as a reason to avoid these services and CWT's survey found a perception that safety and security risks may be higher in the sharing economy than classic travel solutions.
However, the TMC points out that sharing economy brands are waging global campaigns to boost their safety reputations. It notes that around the world, local laws have been passed on car sharing, placing the responsibility for insurance on the shoulders of brands rather than the drivers.
Furthermore, it explains that the sharing economy model enables users and providers to share ratings and information on their experiences as a way to self-regulate.
In addition, brands also provide guidelines to users to help them avoid fraud, while tackling reported complaints efficiently to exclude offenders.
ACTE reports that 26% of travel managers it surveyed have implemented - or plan to implement - policies for ground transportation from the sharing economy sector. Some 21% have introduced, or plan to introduce, sharing economy accommodation options.
However, 56% completely rule out adding these accommodation options to their policy. Some 45% of travel managers surveyed have not received any requests from their travellers to include sharing economy options in their policy.
Does your policy accommodate sharing economy providers?
Some evidence of sharing economy adoption was found at the recent ACTE/CAPA Brisbane Corporate Travel Education Forum, although it is clear that Australian organisations have not yet managed to integrate these suppliers into their travel programmes.
Technology remains a core focus, with an emphasis on mobile solutions
Technology was identified as a persisting focus in ACTE's latest survey and among focus groups.
Many organisations are keen to boost the travel experience by giving travellers up to date information before they travel. Almost one in three (30%) travel managers surveyed have already implemented some form of pre-trip messaging, while over a quarter (27%) want to introduce pre-trip services over the next one to two years.
In-trip messaging is even less widespread, deployed by less then a quarter (23%) of respondents, with just over a quarter (27%) planning to introduce it in the next two years.
According to recent Carlson Wagonlit Travel research, travel managers are embracing technology as they try to meet changing demands in a more complex travel environment.
The CWT analysis finds that mobile technology is having a significant impact, and travel managers need to deal with seamless "multichannel" access across devices, all-in-one "power apps," wearable technologies and location-based services. Travel policies need to be updated to accommodate the rise of mobile and to ensure that travellers use approved apps and solutions ,and that data security concerns are addressed.
CWT also identifies a trend toward customisation. It notes the impact of Big Data, social media and IATA's new distribution capability (NDC) for airline inventory and points out that the traveller profiles used to tailor booking services are becoming more powerful thanks to sophisticated analyses of booking and browsing behaviour, combined with data from other sources.
The TMC stresses that change appears to be accelerating in managed travel, with each major technological shift generating further innovation as the industry adapts its expectations and behaviour. "It is clear travellers accept change readily when it makes their lives easier, even if they might express some concerns with the unknown, such as the potential impact on data security and privacy.
Similarly, travel managers are open to new ways and means of reaching their objectives, which remain focused on providing employees with cost-effective, efficient and safe service," researchers conclude.
Managing the challenges
ACTE anticipates that corporate travel managers will place increasing emphasis on traveller service - but not at the expense of savings. The expectation of better traveller service and a focus on containing costs in a changing corporate travel environment is placing increased pressure on travel professionals.
Given the pace of change and the potential for disruption from unexpected quarters, travel managers will need at least to accelerate plans to implement technology advances if they are to retain relevance in the market.
ACTE and CAPA will continue to assist travel managers by highlighting the issues, providing advice and sharing experiences in a series of educational forums and Summits around Australia.
The next session, The Future Corporate Travel Experience: Beyond Policy, Process and Payment, will be held at the Langham in Melbourne on April 27th, bringing together some of the region's leading suppliers and travel managers for a full day of presentations, panel discussions, roundtable interactions and networking.
For more information about the Melbourne event, please click here.
*Allan Leibowitz is a seasoned business journalist who edited Business Travel Monthly/Management for more than a decade and also transformed Procurement Professional into a leading resource in the Australasian market. He now leads 'talking business', a content marketing and events consultancy which specialises in procurement and business-process issues.
Allan is working closely with CAPA and ACTE in the planning and delivery of targeted Corporate Travel events in the region.