Business travel rolled with a whole lot of punches in 2016. Buckle up for next year.
The past year was full of mergers, surprise breakups, economic instability, political battles, and international upheaval — all of which shook business travel.
For the full year, a Global Business Travel Association forecast says business travel volume in the United States is expected to grow only 1 percent, while spending is projected to drop 0.6 percent.
While business travel spending is expected to increase 6 percent this year in Western Europe, spending growth in the UK is projected to slow to 2.4 percent in 2017. That’s due to the decision by UK voters to leave the European Union, a process that is likely to have significant implications for travel and work in Europe.
“The shock of the recent Brexit vote may finally be wearing off, but the true economic and political impact of Brexit on United Kingdom’s economy is still largely unknown,” a GBTA report said.
Skift asked several executives in the corporate travel sphere — travel management companies, technology providers, organizations, and others — about what affected their business in 2016 and what their biggest breakthroughs were this year. We also asked about their priorities and hopes for 2017; look for that story in the coming weeks. They responded by email.
Scott Brennan, president of the hotel business at Carlson Wagonlit Travel, described “the wave of populism sweeping through global elections,” also noting voter rejection of a peace deal between the Colombian government and FARC rebels. (A revised agreement was later approved by the country’s Congress.)
Egencia president Rob Greyber said that even though the results of the UK referendum and U.S. vote were surprising, he was more taken aback by “the depth of the polarization in our society today.”
“That’s something everyone must tackle in the coming years,” he said. “We have big questions and challenges ahead of us. We don’t always agree on what’s truth, but we will make better choices if we can talk and reason together.”
Others found the unexpected in news about their own industry. Steven Reynolds, CEO of hotel rate tracking tool tripBAM, wrote that he was surprised by American Express GBT’s purchase of technology firm KDS.
“Finally, a TMC making an aggressive move to stay competitive long-term,” he said.
Andres Fabris, founder and CEO of data aggregator Traxo, said he noticed an unanticipated number of companies giving employees more flexibility in how they book
“We expected this change to occur more gradually, but as technology has made the accessing that data much easier, companies are more open to flexible booking policies for their corporate travel programs,” he said.
For Greeley Koch, executive director of the Association of Corporate Travel Executives, the surprise came out of a study on modern business travelers. More than 45 percent of travel managers and buyers said there was an increase in travelers trying to maintain a work-life balance on the road.
“Business travelers are no longer willing to sacrifice their exercise regimens, sleep programs, nor diety preferences while traveling for the company,” Koch said. “This is a huge change in the basic travel profile. It is something that all companies are going to have to consider, and adjust to, if they are going to retain their traveling executives.”
Again, global events affected business travel and corporate travel companies in a major way. Terror attacks struck targets throughout Europe that had previously been considered safe, most recently a Christmas market in Berlin. Airports in Brussels and Turkey were the site of deadly bombings.
Dr. Myles Druckman, senior vice president and Americas regional medical director at International SOS, a medical and travel security services firm, said the attacks drove home the need to keep better track of employees. The low price of oil also reduced global travel for exploration and development.
Koch said Brexit and questions about the Chinese economy and Russian foreign policy all have had implications.
“Business and business travelers like certainty,” he said. “Uncertainty runs the risk of reducing business travel, and reduction in business travel mean reductions in the economy.”
Koch said Trump’s election could be significant for domestic and international air travel if the President-elect delivers an infrastructure plan that is heavy on investment in large projects.
Industry consolidation was another big issue that corporate travel companies had to face, namely Marriott’s acquisition of Starwood — but also smaller deals like HNA’s purchase of Carlson Rezidor Hotel Group.
“Starwood/Marriott merger was the most talked about event in 2016,” Reynolds said. “Corporate travel managers are very concerned that the merger will have a negative impact upon their negated rates in 2017. Such hotel supplier consolidation is a strong positive for Tripbam, as companies look for alternates to save money on hotel spend.”
And some companies said acquisitions or integrations in their own businesses had the most impact.
Travelport built on its acquisition last year of mobile company MTT with the creation of a new digital organization, Travelport Digital. And Egencia completed its integration of Orbitz for Business, which started after parent company Expedia acquired Orbitz in 2015.
A couple of trends popped up in corporate travel innovation: Hotel focus and mobile technology.
Carlson Wagonlit Travel, for example, created a standalone hotel division this year. Egencia’s Greyber said his company is “constantly iterating, changing, and pushing for more” when it comes to its hotel business.
At Travel Leaders Corporate, chief sales officer and president Gabe Rizzi said the travel management company had “a laser focus on refining our mobile trip enhancement and flight notification technology.”
Druckman of International SOS said mobile check-in and employee monitoring has become critical.
“More modalities and simpler functions to deliver information in a timely manner has been important,” he said.
Koch said another piece of technology — artificial intelligence — made big gains in 2016 that could lead to automation of mundane travel management tasks in the near future.
“This will free travel managers to pursue more strategic issues,” he said.
One other big issue that he sees would likely be welcomed by travelers: keeping their needs and desires central.
“Though we have been exploring the issue for the past three years, traveler centricity — the concept that shifts more control of travel options to the business traveler with the expectation of greater performance — is clearly the way of the future,” he said. “The most successful business travel managers are already including business travelers in the procurement process and experiencing substantial gains in traveler performance and savings.”
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Photo credit: The lobby of a Marriott is shown in Wisconsin. Marriott's eventual acquisition of Starwood was a big story this year for corporate travel. Keith Ewing / Flickr