Business Travel Trends for 2017

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Author: Murray Warner, Concur

Australian organisations require their employees to travel more, and farther afield, than any time in the past. This is due to increased globalisation and the distance between Australia and the rest of the world, as well as the vast distances between Australian cities.

Despite technological advances that make it easier for workers to collaborate across long distances, nothing replaces face-to-face contact. We’re seeing organisations invest heavily in putting people in the same room. Last year alone, Australian businesses spent more than $1.7 billion on airfares, hotels, dining and entertainment, and ground transportation. (1)

This trend is unlikely to slow down as Australian businesses continue to face stiff competition from local and overseas players in almost every industry. They must do what it takes to shore up existing business and attract new customers and suppliers. As a result, we’re likely to see the business travel industry continue to expand in 2017 in a number of key ways.

According to Concur, four key business travel trends are set to emerge in 2017:

  1.        Increased travel overseas

The 2016 Concur ANZ Spend Management Index found the vast majority of respondents (78 per cent) travel interstate and to New Zealand. A further 20 per cent also travel to North America, Europe, Asia, South America, Africa, and the Middle East. The trend towards overseas travel is set to significantly increase as more companies expand into new global markets. 80 per cent of internationally-active Australian businesses are expecting to branch out into new overseas markets in the next two years. (2) For example, Asia is becoming a key Australian hub for many businesses.

Businesses are always trying to understand how they can maximise their travel dollars. One of the difficulties is identifying areas for potential savings. The challenge for businesses is identifying:

1)        Whether a trip booked by an employees was the best ‘reasonable’ option available

2)        The trip adhered to the company’s travel policy

3)        Employees followed through with bookings

It’s hugely time consuming for a business to (manually) analyse how spend could have been used in a better way. This isn’t just for big ticket items like airfares and hotels, businesses can accumulate large costs on taxis and entertainment too. These expenses are usually left up to a manager for approval in the expense claims process. This process can be much quicker with a systemised approach as opposed to manager discretion.

  1.        Increased use of the sharing economy

Qantas and Airbnb recently joined forces, letting Qantas members earn points when they stay at an Airbnb property. Business travellers are increasingly being drawn to using Airbnb. They seek the ‘comforts’ of home when travelling and enjoy mingling with the locals and exploring the different cultures this way. It adds a personal element to the ‘business’ travel. The online reviews gives the transparency that travellers seek, so travellers know what to expect before they book.  This is expected to affect the business travel sector since hotels that traditionally targeted business travellers may need to consider attracting a new type of clientele.

  1.        The demise of ‘bleisure’

The 2016 Concur ANZ Spend Management Index also found only 23 per cent of respondents actually extend their work trips with holidays, despite previous trends to the contrary.

This is likely to continue in 2017 as more people try to really separate work from leisure to better balance their work/life commitments. People are wanting to enjoy their holiday from start to finish rather than tying in work commitments. There will be a big focus on disconnecting work from family/leisure time. This is good news for organisations, since it removes the need to separate work and holiday-related expenses in an employee’s reimbursement claim, while also reducing the chance that an employee will, mistakenly or otherwise, use their corporate credit card for personal holiday expenses.

  1.        Duty of care

Risk management takes on new meaning when it comes to travelling employees. Organisations have a duty of care. They need to know where employees are at all times and be able to contact them in case of emergency. This is particularly crucial in cases where travellers are staying in Airbnb properties and not in company approved hotels.

Smart organisations are introducing new policies regarding safer travel, and are implementing new technologies to enable these policies. One example is Concur’s Risk Messaging, which identifies travellers’ global locations and lets the company contact them instantly via text message to deliver safety warnings, to confirm whether they are safe in an emergency situation, or to orchestrate their evacuation if necessary.

In terms of adhering to local regulations, many businesses do not build policies around local regulations until there is something newsworthy (e.g. a kidnapping) where the company (or an executive personally) is being held liable.  Businesses need to be educated around this.

Company approved hotels solves some problems (such as negotiated rates, an acceptable and known standard of service and safety).  The issue: companies have been trying to do this for years.

There is a cost to policing both the bookings and the expenses to the company.  There is also the issue of what you do to the employee if it’s found they are not staying in a company hotel.  I have found a small number of organisations that are unwilling to reprimand/terminate/refuse to pay an employee’s expenses for a non-company hotel.

Businesses need to find a way to capture the employee’s itinerary (hotel) information even when (perhaps for a valid reason) they need to stay in a non-company approved hotel.

This is where tools like TripIt and TripLink (consumer mobile apps for travel) can help load itineraries into a system like Concur even if a traveller booked directly through the supplier website (e.g. Starwood, Accor, AirBnB).  It takes away the reliance of tracking employees purely with the travel agencies particularly when (hotel) leakage is becoming such a major issue.

About the author 
Murray Warner is business development director, Concur technologies. 

References
1) Concur State of Business Travel 2016 – https://www.concur.com/newsroom/article/global-business-travel-and-spend-report-reveals-new-sharing-economy

2) Finsia (2015) – http://www.finsia.com/news/news-article/2015/08/12/australian-businesses-eye-up-international-expansion

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Procurement and Supply Australasia (PASA) is the leading provider of information and education to procurement and supply professionals throughout Australia and New Zealand. PASA supports the largest community of engaged procurement stakeholders in the region, through its renowned series of events, publications, awards, plus various community and network building activities. PASA is a trading name of BTTB Marketing, for many years recognised as the leading producer of conferences and events for the procurement profession in Australia and New Zealand. Whether producing under the BTTB, CIPSA Conferences or now PASA brands over the last ten years, our events have consistently led the market in terms of both educational and networking opportunities.

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