7 Projections for Travel Programs
7 projections for travel programs
COVID-19 has transformed the business travel landscape. With many offices closed either temporarily or permanently and large portions of workforces working remotely, travel managers’ priorities have shifted.
With domestic travel on the rise again in Australia, the vaccination program will hopefully unlock an increase in international business trips. However, demand will be shaped by the adoption of virtual alternatives, remote workers questioning the need to travel, and the rising importance of sustainability on corporate (and government) agendas.
Health and safety are now the number one priority for every travel manager, with proof of vaccination and health passports likely to become a standard part of the business traveller’s kit.
As the events of 2020 and 2021 have showed, health emergencies can escalate quickly, and borders shut overnight. As business travel resumes, those that travel will be subject to policies that place up-front the minimising of risk through duty of care.
Companies need to know where their employees are in the world. At FCM, we have deployed a new generation of tools that use real-time data to track where employees are and how to reach them. This technology is helping businesses to monitor global travel risks, like changing international rules around quarantine, natural disasters and transportation strikes so we can help get business travellers home quickly and safely.
The pandemic has also heightened the importance of cost control and change management in travel programs. Sustainability is also firmly back on the corporate agenda.
With the deadline to meet the UN’s Sustainable Development Goals (SDGs) just ten years away, reducing environmental impact is now urgent. Although the Trump administration pulled the U.S. out of the Paris Agreement which gives signatory countries until 2030 to reduce emissions by 55%, this has sharpened minds on how companies’ emissions from business travel (and carbon intensive air travel in particular) can be reduced, according to a study published by PhocusWire.
Sustainability also includes sustaining employees’ physical and mental well-being. During the pandemic, promoting mental wellbeing and ingraining it in a company’s culture became super important.
Ultimately, while business travel volumes will inevitably shrink, it will be changes to what constitutes a necessary trip that determines the scale of that reduction. Organisations are already applying tougher criteria for taking a business trip, segmenting essential from non-essential travel, income generative activity from project management or simply external from internal travel.
Whatever the distinction, pre-trip approval processes are being tightened up. Pre-pandemic, organisations with essential workers were re-booting travel policies to put traveller safety first. These challenges now apply in every business, so employers are thinking about how to utilise business travel spend more strategically.
Most agree that to maximise productivity through human connections, face-to-face, virtual and hybrid solutions need to be integrated within corporate travel policies. We expect this to become part of many TMCs remit going forward.
Travel programs now must address the need for travel within their organisations. Travel is no longer purely about transporting employees to and from meetings. It is now about the value of the meeting itself.
So, what will travel programs look like going forward? Here are our seven projections:
1. Travel budgets will be smaller. Consequently, as corporates struggle to hit the thresholds in their preferred supplier agreements, we expect to see fierce competition amongst suppliers and some inevitable consolidation.
2. There will be fewer but more important trips and travellers. Trips of marginal value will be refused and pushed towards virtual instead.
3. Travel managers will focus less on cost savings because those trips that do take place are important, as negotiated savings are far outweighed by massive savings from fewer trips.
4. Senior management will demand greater insight into the effectiveness of travel spend and challenge travellers to make more of their trips.
5. Fewer trips and travellers will lead to suppliers reducing capacity. Airlines will use price inelasticity of remaining trips and raise prices for business travellers.
6. The importance of travel in company structures may be diminished as HR and security stakeholders become involved in re-tooling travel programs and procurement execs spend less time on travel as a spend category.
7. More organisations will recognise the risks of allowing direct bookings and will turn to TMCs to help them manage every aspect of travel, from identifying the criteria for travel to measuring trip outcomes.
Decades of Expert Knowledge
Our FCM Consulting team is made up of industry leaders in travel, finance, and procurement here to help you enhance and optimise your program to be ready for whatever is around the corner.