Is it an ‘Appy’ Christmas for business travel?

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Yes, a growing number of business travellers may be turning to technology to ease their journey but with continued global uncertainty ‘caution’ for this sector is the word

Flying, sleeping and driving have all been on offer at competitive rates to try lure the increasingly thrifty business traveller all of 2016. Latest numbers in, according to Travel Leaders Corporate, indicate that this story will continue into 2017. No surprises there, nor, in this uncertain new world, that the Global Business Travel Association’s (GBTA) forecasts domestic customers will be favoured over trips to see international ones.

After a tough 2016, with US revenues falling 0.6% as trips rose by just 1%, 2017 is expected to be only a little better. Spending by US business is expected to rise by 3.8% to $293 billion and trip volume by 2.7% to 535 million. International travel is expected to improve by just less than 1%. However, Asia is expected to be much more active.

Of course, not everyone is feeling hard-up - look at the fast-rising numbers for luxury business travel in India and Indonesia. However, in 2016 generally, business travellers continued tightening their belts, cutting trip time and taking the cheapest options.

Use of mobile technology is making it easier for them to manage their own travel to do so. A survey, by the GBTA and GDS provider Sabre, of app trends showed that over 70% of business travellers in the US, Italy, Canada and Spain now prefer to use self-service technology. (In Nordic countries it’s 60% and in Germany 56%.)

Privacy is still an issue. Most business travellers object to handing out personal information to obtain services. They are willing to share details such as their frequent flyer or hotel loyalty number, preferred airline and hotel brands and aircraft seat preferences, says the GBTA. But fewer than half would share their travel history, preferred leisure activities while travelling, their business calendar with booked appointments and their social media account names.

…fewer than half of business travellers would share their travel history, preferred leisure activities while travelling

What’s popular now on the apps front for North American business travellers are those giving flight check-in status, generating an online boarding pass and booking hotels and flights, says the GBTA. The same applies in Europe.  

On the other side of the Atlantic, Germans and Scandinavians are less likely to use travel-related apps for booking, while Spain-based travellers are more likely to do so. The Europeans surveyed were more likely to use apps to book rail or train than North Americans and were less likely to use them to request a ride-sharing service or taxi. The range of those likely to use mobile payment or e-wallet technology ranges from 43% in Scandinavia 22% to 75% in Italy. And despite all the terrorism worries, only 22% of travellers surveyed by Sabre have used a mobile app to check in with their company.

There seems to be more uniformity when it comes to wish-lists for hotel technology - in-room Wifi and internet, in-room laptop and phone chargers and streaming services on the TVs headed the lists.  

Technologies emerging to help agents or advisors manage business travel include Tripscope, Axus and Unmapped. These apps help build and adapt itineraries and include real-time flight information. There are also white label travel apps from firms like Roadmap.

The luxury end

Even the top end of travel, the business jet market, is still soft despite the safety and ahead-of-the-curve flight connectivity attractions of private business jets.  The economy made at this end of the market is to replace ownership with charter, and Vistajet’s business is breaking records. (It says customers are coming from healthcare, entertainment, hedge funds and finance.)

For those not threatened by regulatory or shareholder scrutiny, luxury travel understandably remains popular. According to Amadeus, growth has been slightly ahead of overall travel, at a steady CAGR of 4.5% in the four years to 2015.

Luxury travel…is a fertile market for apps

This is a fertile market for apps. Bluesmart is one of the latest - a smart suitcase that comes with tracking technology combining 4G and GPS to show if it is safely on the plane, and how far away from the carousel at arrivals! Or there is Linen Tracking, which even has a Facebook page, and whose RFID tracking chip allows hotel to track rooms towels - if they’ve been dropped on the floor they’ll need replenishing!

Next rung down from luxury, business class has risen in popularity in the US, steadily declined in Europe, but soared in Asia. Though in China the government’s clampdown on corruption is likely to send more businessmen scuttling for economy.

An indication of the degree of general belt-tightening going on globally comes from a look at business travel expenses - Uber and Lyft are taking the majority share of land transport provision. Expense management group Certify says that 52% of those using transit for work in 2016 Q3 opted to use a ride-hauling service. This is the first time that demand has given them more than half of ground travel expenses.  

52% of those using transit for work in 2016 Q3 opted to use a ride-hauling service

Actual numbers for global business travel always lag. The latest, for 2015, came out only in July but show that in 2015 this was a $1.2 trillion market. By 2020, according to the GBTA, it is expected to reach $1.6 trillion.

 In 2015 China made history by surpassing the US as the world’s largest business travel market, worth $291 billion - that is 25% of the total. This year (2016) the figure is expected to grow by over 9% and reach $318 billion, against $293 billion for the US. Domestic travel accounts for 95% of China’s business travel and has been growing in double-digits, says the GBTA. Now the rate is likely to slow to single digits.

….business is ‘taking an extremely cautious wait-and-see approach bordering on paranoia’ – GBTA

Still a long way behind, but catching up, India and Indonesia are forecast to grow business travel in double digits over the next five years.

However, the GBTA is not happy. Right now, looking at the business travel market globally executive director and COO Michael W. McCormick says “spending is stalled”. In the face of global uncertainty, the US election, et al, business is “taking an extremely cautious wait-and-see approach bordering on paranoia.” That, he says, is no basis to “prepare for lasting business growth”.

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