Business travel is back, but not as we knew it – Strategy

Business travel has often been regarded as a major work perk — leaders get to roam the globe at a moment’s notice, rack up those all-important status points and drink champagne in an airport lounge.

On the other hand, it’s convention centre breakfasts, immigration officers at LAX and weeks — sometimes months — away from loved ones. 

But whatever your experience, as COVID-19 ripped through the world, it dismantled business travel and leaders ditched the Qantas Business Class pyjamas for track pants. Two years later as borders open and flights resume in regularity, the question remains: how rapidly will business travel return, and how has the sector that sustained it transformed?

Digital Nation Australia spoke to executives across the travel technology sector to find out how organisations are taking on business travel and whether employees will need to renew their passports just yet.

Airlines are already expecting bookings to pick up in 2022. According to the Singapore Airlines Group’s current published schedules, the airline expects global passenger capacity to reach 51 percent by March 2022, and for its global network to return to around 70 percent of its total pre-Covid destinations by the end of the financial year.

Aaron McEwan, VP of research and advisory at Gartner said flight bookings are already at 86 to 87 percent of pre-pandemic travel in the United States but a new variant could suddenly change that.

“We are looking at a potential fourth or fifth outbreak of a different variant. Whilst we know that the airlines themselves are gearing up for increases in both business and consumer related to travel, we’re not actually seeing that flow through yet. Many organisations and I’d argue many employees, will still be reluctant to travel,” he said.

Delay rather than cancellation

While hesitancy still lingers in the air, it doesn’t mean that business travel is gone altogether. McEwan said he would be very surprised if businesses banned travel outright.

“There will still continue to be a very good reason to bring people together more so what they have done is significantly reduced that travel. They might still fund business travel, but it’s going to be for very specific meetings or purposes where they’re bringing people together,” he said.

“Something like the annual company conference where once a year or once every several years they bring employees together from all over the world may still happen, probably at a reduced scale.”

David Fastuca, CMO and co-founder at business travel management company Locomote said there will be some disruptions coming into play.

“There will still be a bit of hesitancy by some companies, there’s some that we’re speaking to now that are seeing what happens. While others are more aggressive in saying that they want to get their team out there, because this is what they got them for,” he explained.

Fastuca said there will be a settling period and by 2023, they will have a clearer picture of business travel.  

“From all of our chats, predictions, conversations that we’ve had, we see around 25 to 30 percent of business travel will be wiped away. That is predominantly internal meetings that you have, similar to if I’m chatting to you, and you’re part of my team in a new area, we can have a quick call, we don’t need to do the one day flight,” he said.

Instead of a quick day turnaround, businesses are allowing a few extra days away from their desk to get the most out of their trip.  

“But what we’re seeing is longer stays happening. If I’m going to go to Sydney, if I’m going to Brisbane, instead of going for one meeting, I’m going to make sure I can do two or three meetings, and stay the night. It is more been more diligent on the travel that happens,” he added.

A new digital route

Attendees for conferences in 2022 are now given options as to how they want to be a part of a conference. People can either buy a normally free digital ticket to watch a conference online or fork out usually thousands for an in-person pass.

Andrew Hiebl, CEO of the Association of Australian Convention Bureaux said while digital events aren’t leaving anytime soon, more people will opt for in-person events.

“We certainly learned that digital couldn’t replace the opportunities of in-person events. [Digital events] certainly played their role around member engagement for associations maintaining that during lockdown periods, continuing to broadcast education,” he said.

“We also learned you can’t deliver the framework of an in-person event, record it and put it online. It is much more of a TV production type activity, which requires far more attention and investment than we probably gave it respect in the last two years.”

Hiebl said elements of digital will remain such as dialling-in to sales meetings rather than flying somewhere for a day.

“A lot of the old teleconference calls we had people dialling-in and that will now be upgraded to Zoom. Things like the benefits of networking in person, and the exhibition style of trade, that was not adequately handled by digital.

“But I think in terms of getting back to doing business, the more traditional approach to impersonal events will return,” he added.

This is the first pandemic where there is potential to use digital technology to enhance the traditional methods of public health policy and travel risk management, according to Alec Gardner, managing partner  ANZ at data science and analytics consulting firm Alphazetta.  

“There is more data in the public domain than on any prior pandemic. As things continue to change at a rapid pace, the best way for business travellers and travel managers to stay apprised is to digitise and automate as much as possible,” he explained.

“With safety standards and regulations constantly changing around the globe, access to accurate information, in near real-time, will be vital when planning an international trip. Data is an incredibly valuable asset in demystifying this new complexity and to continually model risk, a guide for compliance and provide alerts.”

Sarah Derry CEO at Accor Pacific said the hotel giant is taking a “people-centred, outcomes-focused” approach to the design and adoption of technology.  

“We are using technology to continuously improve our seamless customer experience. Technology is making everyday tasks easier, and we are improving customer service further,” she said.

“We are capturing data which allows us to personalise our customer’s journey and we are freeing up our teams time to focus on providing quality guest service, rather than focusing on administrative tasks.”

The impact on the industry

Organisations might be keen to get their employees back on the tarmac, but the travel industry is still hurting from the border closures.

Derry at Accor Pacific said the company is seeing more enquiries for conferences and event bookings, however, they need greater government support to revitalise corporate travel.

“In the recent budget, the government has given money to Tourism Australia to encourage the return of the International visitor, this support will need to be ongoing if we are to re-build business, conference and events travel to pre-covid levels,” she said.

“We need greater Government support to revitalise corporate travel and we urge the government to do more to help our cities. We need sport, arts, cultural events to get people back to cities.”

During the two years of suitcases collecting dust, the travel industry itself has changed to keep up with the increase in customer experience in e-commerce.

SiteMinder chief marketing operator, Mark Renshaw said he has seen e-commerce explode in so many industries and categories. 

“What has happened is that it put a greater expectation on the hotels and accommodation providers to basically be much more leading-edge with their technology and their guest experience,” Renshaw said.

There has also been a shift in consumer behaviours since the pandemic began, according to Renshaw.

“We’ve seen a lot of people booking more last minute, we’ve seen continued growth of that. This means that hotels and accommodation providers need to be in more channels, and they need to be more visible to more different audiences,” he explained.

“They also need to have that real-time availability and inventory. No longer can you have a website where it says please call us to book your room, that’s just not going to cut it. If people are used to getting deliveries same day or next day from leading brands, then they’re going to want that booking to confirm right then and right now for next weekend.”

Renshaw said SiteMinder has seen so many of its customers pick up on new products and services in order to improve real-time behaviour, confirmations and communication and understanding of what’s happening in the industry.

“More reliance on technology and data in general, in order to keep up with those increased expectations that people have with all brands and all categories that they’re buying,” he said.

Brett Mitchell, chief commercial officer at Intrepid Travel said Covid has accelerated online bookings.

“We’re seeing particularly in this digital space, a trend pre-Covid people booking more online, looking at searching, looking at planning, and Covid has ultimately accelerated that trend,” he explained.

“Typically, whereas pre-covid 55 percent of all of our bookings came from third-party distribution partners at the moment, it’s only 33 percent. The way people are searching and booking has definitely changed over this Covid period.”

Mitchell said as a tour operator, it is imperative that the company caters to its customers’ needs. 

“Making sure our website is up to date, making sure that we’ve got connectivity with our partners to make sure we’ve got live availability and pricing. As a travel business this trend is happening, and we need to prepare for it,” he ended.

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