Industry Research

How To Handle A Disrupted Corporate Travel Market

Lexi Tucker
Posted on September 10, 2018
Lenore D’Anzieri, director of travel industry partnerships for Dav El | BostonCoach

Lenore D’Anzieri, director of travel industry partnerships for Dav El | BostonCoach

Lenore D’Anzieri, director of travel industry partnerships for Dav El | BostonCoach with 34 years of experience in the travel industry, shared valued insights during LCT’s “Travel Trends You Should Know” webinar held July 19. Here are just a few takeaway points to help you prepare for what’s coming.

Good News, Bad News

Travel spend is up overall, based on several factors. U.S. analysts attribute this growth to the healthy economy. Many corporations are adding travel benefits for employees to attract and retain talent. Airlines have increased capacity during the past few years, and trends indicate further growth.

However, much of this spend is not coming from pricier airline tickets because they haven’t really risen that much. It’s more about capacity and supply and demand. Hotels have boosted capacity to accommodate those travelers. They’ve raised their average room rates because there are so many people.

“You would think Airbnb would have had a negative effect on that, but in fact, it has not,” D’Anzieri said. Technology is obviously at the forefront because it’s so much easier for people to go out and book their travel and know exactly what they’re going to be spending, so that has contributed to the rise in travel.

Unfortunately, the corporate travel industry is having a hard time keeping up with evolving technologies and the demands of travelers. “Just like those of us who are not Millennials and have to deal with Millennials, it’s an entirely different culture than what we grew up with. Many of the corporate travel management companies are having a difficult time understanding and adapting to this.”

Sharing Economy Impacts All

The sharing-model businesses aren’t just disrupting luxury ground transportation companies; they’ve roiled the entire economy. “There’s a trickle-down effect. Just think about Airbnb and the lodging sector. When they start to lose money, the food and beverage people get laid off, housekeeping jobs are lost, travel agent commissions go away, and so on,” she explained. “It’s not just our industry that’s being affected.”

One of the key factors often talked about in corporate travel is duty of care. But is it really an important factor anymore?

“In spite of the focus on safety and security, it’s no secret corporations and leisure travelers are ignoring these in exchange for cost and convenience. They understand the risks, yet they continue to use Uber and Lyft.” D’Anzieri said. It’s important to have a thorough understanding of what duty of care means to each person operators talk to about the term.

“Many corporations are under the assumption chauffeured transportation is a lot more expensive than the TNCs. If you do the math, and if you look at an extended period of time for those expenditures, often you’re going to find the pricing is not that different. Uber and Lyft do not give away their surge pricing,” she explained.

Travel management companies and agencies are trying to encourage travelers to use legacy companies for ground transportation, not only for security reasons, but also because they have a personal interest. “We give travel agents commission, so they’re losing revenue when clients use Uber or Lyft as well.”

Why will travel agents choose you? At the top of the list are commissions, booker rewards, your visibility during networking events, and what kind of relationship you are looking to build with them. “Familiarity, and most importantly trust, are vital because every time we deviate from what they expect, that trust factor goes down. And I can guarantee you they’re going to put their customers over you.”

Bleisure Creates Opportunity

In 2017, 79% of travelers completed all of their travel plans from their smartphones. That’s up from 70% in 2016, and this trend isn’t about to slow down. Convenience plays a large part in how people choose how they will travel. This is part of the reason why bleisure travel has increased.

If you are unfamiliar with the term, bleisure is a combination of business and leisure travel. Companies are using it as a way to attract talent. The employee will pay for the leisure portion of their trips, and therefore don’t have to stay inside company travel policy.

“Whether they want to go high end or budget, it’s all up to them. What we are finding is they are not spending any differently than they would as if they were on their business trip for the majority. So a lot of them are still going with the least expensive options as possible,” she said. “They’ll typically go with the most convenient modes of transportation; that’s my sensitive way of saying they’ll use Uber and Lyft.”

However, anything that creates more travel does give you the opportunity to up your sales game — you should see this as a challenge rather than a death sentence.

Tech Giveth And Taketh

Face-to-face meetings are rising. Corporations had a rude awakening when they tried to make their salespeople do a lot of networking or sales presentations by phone or Skype. It’s just not as effective as meeting with someone in person. This trend will surely contribute to the increase in travel and opportunities for you to gain that business.

Your ability to cater to the instant gratification generation is another factor that will make your business sink or swim. Live chatting has become extremely important to a lot of the people who book online. 79% of businesses that offer live chat see a positive impact on sales, revenue, and customer loyalty. “Be aware your clients are looking to be responded to immediately and not have to make 15 phone calls to get there,” she said.

Educated Predictions

So what does the future of travel look like? “I really have no idea,” D’Anzieri said. “It’s just changing too fast for me to know. Technology is ever evolving, the traveler mindset is evolving with the technology, and for the most part, they can’t do without it, or they don’t want to do without it. The shared economy is not going away. Payment options are changing, and educated traveler options are growing.”

To keep up with these changes, you should understand how technology affects the travel space, how your clients are using it, and how they feel about it. Keep looking for technologies in your market to enhance the client experience and internal efficiencies.

Don’t stop differentiating yourself. Travel agents, believe it or not, are on your side. They’re looking to help you grow your business because it helps them too. Keep them in the know and make sure they understand you and your future plans.

Finally, create alliances — not only with your clients, but within your industry. But you already do that at LCT Shows…right?   

[email protected]

Related Topics: business travel, business trends, corporate travel, duty of care, How To, industry trends, Lyft, passenger safety, research and trends, technology, TNCs, Uber, webinar

Lexi Tucker Senior Editor
Comments ( 1 )
  • Anthony

     | about 2 years ago

    Educating your customers is the key to teaching your customers the dangers of suing a taxi app. Such as the latest horrific story from dec 2017 when a female british embassy employee was murdered by her uber driver with a long criminal history (he should have never been allowed to drive anyone) The strong example is a random driver that could be in the clock for over 10 hrs waiting for that taxi app customer "your self" Homesafety.... do you really want a random person to know your away on vacation?

More Stories
Despite concerns about potential disruptors, travelers contniue to embark on new adventures (Photo via Pexels user Matthew Barra)

Luxury Travel Will Surge In 2020

The results of a recent survey reveal an overall positive outlook, despite concerns about political and economic stability.