As travel demand returns, a new report from Accor uncovers some of the challenges and opportunities facing corporate travel decision makers as they reexamine the value of business travel in a post-pandemic world — and points to what they need to prioritize in 2024.
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Amidst financial and geopolitical uncertainty, business travel demand is increasing due to a robust return to in-person corporate and industry events — even though a full recovery to 2019 levels may not be possible until 2024, according to Skift Research.
As the market continues to level out post-pandemic, business leaders are seeking a new status quo that balances business needs with social and environmental pressures.
“Demand for business travel is back, with forecasts indicating continued increases in business travel spend,” said Karelle Lamouche, chief commercial officer, premium, midscale, and economy brands at Accor. “Business needs travel, and its value is undeniable, but the how and why of business travel has never been such an important question to explore. Understanding and evaluating the purpose of a trip has become more important than ever.”
This idea that purposeful travel is now key to the business travel value equation was recently explored by a panel of global business leaders and senior Accor executives at the company’s annual Masters of Travel advisory board meeting.
“Our Masters of Travel advisory board brought industry leaders from technology, law, energy, engineering, and pharmaceuticals together with Accor executives to create a future vision for business travel and corporate meetings, digging deep into the real value of travel, evaluating the demands it makes in environmental, social and governance (ESG), and understanding what businesses need to prioritize in 2024 and beyond,” said Sophie Hulgard, chief sales officer at Accor.
Key insights from the Masters of Travel event appear in Accor’s Business of Travel 2023 report, which provides a snapshot of the current state of business travel via new research and data analysis.
Understanding the Why of Business Travel
Business travel demand is coming back. A recent survey of Accor’s corporate clients revealed that their business travel expenses had declined by 24 percent compared to 2019, a 10 percent improvement over 2022. Meanwhile, a Deloitte survey projected that business travel spending will fully rebound to pre-pandemic levels by 2024. Accor data reinforces this forecast. The group’s recent client business travel study revealed 57 percent of respondents expect a travel budget increase in 2024 over 2023.
But while the financial value of in-person meetings is clear — Accor research shows that business professionals estimate 25 percent more revenue when meeting face to face rather than virtually — the question of return on investment must be accompanied by a question of purpose that goes beyond the financial bottom line.
“Understanding why you’re traveling, how it will benefit your client relationships, how it will affect the overall health of you and your company, and how it will impact the environment, are key factors for your corporate travel manager to decide whether you should be traveling,” Hulgard said. “Beyond return on investment (ROI), trips are being evaluated in terms of return on expectation (ROE) — so hospitality companies need to deliver against the expectations of the experience, which can vary greatly from company to company, industry to industry, and even trip to trip.”
Delivering Positive ROE (Return on Expectation)
The panelists at the Masters of Travel event represented a wide array of industries — including technology, energy, engineering, pharmaceuticals, and professional services — each with different expectations about the experience and the importance of employee satisfaction, cultural development, and corporate social responsibility (CSR).
“Our goal as a hospitality company is to meet and exceed all of those different expectations and ensure a return, whether we’re building brand loyalty with one employee at a small company or hosting a large conference for a major corporation,” Hulgard said. “Each company has its own definition of purposeful travel, but one shared expectation on the experience is traveler well-being and the need for hotel brands to delight the traveler.”
With travel stress at an all-time high due to external factors like flight disruptions, inflation, labor shortages, and longer queues, one way hotel brands can deliver a return on expectation is by training hotel teams to approach guests with empathy and communicate with emotional intelligence (EQ).
“We’re very focused on making sure every guest always feels welcome,” Hulgard said. “Fulfilling that promise means accommodating all types of requests and elevating the importance of neurodiversity within our training.”
Accor research shows corporate decision makers place “traveler experience” as the second most crucial consideration in 2024, after cost savings.
“More than ever, the well-being of business travelers should be the priority,” Hulgard said. “This is also where blended travel comes into play. Stay longer, do more, go down a gear. In short, think about what you want to achieve from your time and carbon output. If you stay longer, you can pack in more meetings and enjoy some purposeful leisure time, which is beneficial to your mental health and well-being. And why not add on a pleasure trip if it means one less flight?”
The advisory board concurs. One delegate commented on how cost- and time-effective blended travel is to an employer: “Work is paying for the trip anyway and the employee feels like they’re getting extra value. Morale is boosted at no extra cost — so it’s a win, win.”
Recognizing Social and Environmental Pressures
The client survey found that 54 percent of respondents put carbon emissions as their number one CSR priority, with “supplier sustainability performance for 2024 hotel sourcing and selection” ranked as highly important in their booking decisions.
“A growing number of companies are implementing company-wide carbon budgets,” Hulgard said. “Accor is an ideal partner because more than 70 percent of our hotels already have carbon measurement tools in place. In addition to the detailed carbon offsetting data travel managers are looking for, we can deliver reports on water consumption and other environmental and societal impacts.”
Earlier this year, Accor committed to supporting its 5,400 hotels in obtaining external sustainability certifications by partnering with Green Key and Green Globe. These third-party environmental certification bodies will help Accor reassure corporate travel managers who want all hotel brands in a group to follow the same standards.
“It’s all tied together,” Lamouche said. “With businesses trying to strike a balance between carbon and cost, productivity and purpose, it’s a time of great change and revaluation for the industry — change that we can lead. Today’s corporate decision makers are mindful of value, sustainability, and striking a balance between the time and well-being of employees. Purposeful hotel brands and travel managers can respond to this need and give business travel a new lease of life. Businesses can uplift revenue and reinvigorate teams, culture, and employee well-being through face-to-face meetings and purposeful travel.”
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