Thank You for reading the first-ever LCT Black Book, which from this day forward will focus both on the “Who’s Who” of the industry and on the business travel industry.
As a matter of fact, our team is personally distributing this issue at the upcoming National Business Travel Association convention in San Diego.
I thought this was the perfect time and place to re-print a survey conducted by Calson-Wagonlit touting next Top 10 predictions for 2010.
There are great insights and hints on what you should be preparing your business for in the coming months, so please read on.
The next few years promise significant change in the business travel industry, according to CWT clients and suppliers who participated in a qualitative survey on “effective travel management in 2010.”
1) Companies will increasingly focus on managing demand and minimizing travel. No one argues that face-to-face meetings will remain essential to business and especially client relationships. As one participant put it: “Look into my eyes, not my files.” Nonetheless, companies will increasingly examine how they can get the best return on investment from travel and eliminate any unnecessary trips.
2) The war for talent may lead to less restrictive travel policies, offset by tougher compliance measures. Travel policies could become less restrictive as companies step up efforts to attract and retain talent. More focus will be placed on employees’ work-life balance and driving productivity, and less on achieving savings at the expense of traveler comfort and well-being.
3) Companies will step up efforts to manage travel-related risks. Ensuring the safety of travelers will remain a universal priority for travel managers, particularly for travel to high-risk destinations. Business travel professionals will want to identify services that can enhance traveler safety. 4) Clients will expect suppliers to be a driving force in finding “green” solutions. Ultimately, companies will aim to balance environmental concerns with financial imperatives, taking a holistic, sustainable approach to travel.
5) Technology will continue to improve the traveler experience. Key concepts will include self-service, plug and play, one-stop shop and mobile. In short, companies will continue to seek technology that is more user-friendly and of value to employees throughout the travel process, from the decision to travel to post trip expense reporting. At the booking stage, more travelers will use online tools as companies better integrate them into their travel program.
6) Suppliers will continue to seek lower distribution costs. Price pressure will not ease for suppliers, particularly legacy carriers facing increasing competition from new entrants. Airlines — and possibly hotels — will seek to reduce credit card fees, offering discounts for companies willing to use lower-cost debit cards or new forms of payment.
7) Dynamic hotel pricing will take off. Revenue or yield management is likely to evolve further in the hotel industry with dynamic pricing becoming increasingly common. Dynamic pricing can, however, offer savings by simplifying the request for proposal process and ongoing program management.
8) Multiple forces will impact the competitive landscape. Many respondents underlined that the single largest force in the airline market will be the EU-U.S. Open Skies agreement. In addition to deregulation, the new fuel-efficient Airbus A380 and Boeing 8 aircraft will affect competition on international routes by shaving about 15% off costs per seat. On domestic routes, budget carriers will continue to apply downward pressure on fares and drive growth. As a result, airline competition will inevitably increase in the short-term and decrease in the medium-term, with weaker players being acquired or squeezed out of the market. In the hotel market, supply will remain short in key cities for the foreseeable future, despite the addition of new properties. In ground transportation, seasonal price fluctuations are likely to be accentuated and rates will rise, reflecting the higher cost of new vehicles.
9) Suppliers will increasingly segment services and apply selective discounts. Customer relationship management will become more sophisticated as suppliers increasingly segment the market, seeking new ways to improve the customer experience and pursue higher margins. In the car and hotel industries, companies will target different segments of business travelers through differentiated brands while trying to build loyalty among individual customers by way of tailored services. Here, the key trend will be suppliers enabling travelers to enjoy their personal lifestyle wherever they are, blurring the line between business and leisure.
10) Cooperation among industry players will be key. Clients and suppliers alike pointed out the need for honest dialogue in order to move the industry forward. Clients are eager to understand suppliers’ constraints in order to have more realistic expectations, while suppliers are unanimous about wanting travel managers to provide critical input and feedback. They stress that companies should not be afraid to voice their demands and aim high. As one supplier pointed out: “Everyone has to win in this game.” CWT Vision will continue to report on these issues that concern us all.