Travel Management Companies Try to Keep Pace with Today’s Changing Business Traveler

This sponsored content was created in collaboration with a Skift partner.

Today’s business travelers are changing how they book hotels. Mobile devices have transformed how they purchase and manage their trips while on the road, driving demand for more intuitive, simple-to-use digital travel tools. On top of this, many are embracing new types of travel services like alternative accommodations provider Airbnb. Both of these changes have something in common: they are encouraging more corporate travelers to avoid company-issued travel tools in favor of consumer channels.

For the travel management companies (TMCs) that serve business travelers, this shift presents a potential problem. What are the main factors impacting the hospitality booking preferences of today’s business travelers? And what can TMCs do to improve their experience, limiting the need for users to book outside of policy?

A new report from Expedia Affiliate Network, titled “Business Travel Trends: How TMCs are keeping up with the corporate traveler,” offers some answers. The report, which combines findings from a December 2017 study by Skift and Expedia, executive interviews, and data from an earlier Egencia business travel survey, highlights growing rates of hotel booking “leakage” (booking outside of approved policy) among business travelers.

According to the findings, 68 percent of business traveler respondents booked more than half their corporate trips using non-approved consumer channels. Most did so in order to get better direct rates (47 percent), or to get better online travel agency rates (38 percent), or to book at a specific hotel property (36 percent). Availability of business-friendly alternative accommodations was also a factor: 27 percent of respondents said that adding more alternative accommodation inventory would make their companies’ booking tools easier to use.

“Corporate travel behavior is evolving and for TMCs to keep up, they need to offer both autonomy throughout the booking process, as well as an increasingly personalized service. By offering a better solution and more choice, business travelers will be more likely to book in policy, which will increase compliance and improve duty of care – major concerns in corporate travel today,” said Ariane Gorin, president, Expedia Partner Solutions.

What should TMCs take away from these behavior shifts as they try to rethink their own booking tool offerings? One insight is to expand the range of available hotel options, something that can be done by mixing and matching providers to get the best hotel supply. Incentives may offer another potential opportunity to increase compliance, allowing companies to reward travelers who use the approved booking services more frequently. That said, some corporate travel consultants believe incentives need to be considered carefully, as this approach can also backfire.

TMCs should also look for ways to offer companies and their employees more efficient, mobile-friendly, and easy-to-use booking tools in the future. Almost half of business travelers in Skift and Expedia’s survey (46 percent) wanted to see improved travel booking tool functionality, with enhancements such as the ability to make changes to existing reservations (37 percent) and new or improved mobile booking features (31 percent) as key fixes. Thankfully, TMCs, with their strong technology credentials, deep industry relationships, and global scale, have an opportunity to help push current tools forward. Whether that involves building new tools from scratch, deployment of new technology like artificial intelligence, or simply being smart about strategic acquisitions of user-friendly travel products, there’s a variety of potential solutions.

“The travel sector is seeing incredible tech innovation,” said Expedia Partner Solutions’ Gorin. “In Expedia Group’s consumer business, teams are constantly testing and learning in order to improve and optimize our websites and apps, and business travelers expect the same seamless user experience they find in leisure travel. As a result, corporate tools that don’t deliver lose out.

As the results of Expedia Affiliate Network’s report suggest, consumerization is slowly but surely working its way into the corporate travel sector. It’s a trend driven by the changing habits of business travelers, who increasingly demand more flexible, cheaper, easier-to-use company booking tools. How TMCs will respond to these demands, while still balancing the need to provide safe and cost-effective services, will have a significant impact on the fate of the industry in the years ahead.

Download a copy of Expedia Affiliate Network’s latest business travel report today to explore the full survey results, along with additional insights.

This content was created collaboratively by Expedia Affiliate Network and Skift’s branded content studio SkiftX.