Skift Travel News Blog

There’s a reshuffle taking place, as corporate travel agencies battle it out against each other for business coming out of the pandemic. Now TripActions claims it has secured one of its biggest enterprise customers to date, poaching the consumer goods giant from a major rival.

The startup said it has been selected by London-headquartered Unilever, which has nearly 150,000 employees in 77 countries, to “modernize and optimize” its travel program.

Rival American Express Global Business Travel recently revealed it had secured JP Morgan as a new client, while the CEO of Australia’s CTM claimed it had returned to profit thanks in part to winning customers from its rivals.

TripActions said its selection was linked to Unilever’s “future-fit” program, which is designed to help its employees “adapt to the impact of evolving technologies and ways of working.”

Unilelver, which has 400 brands, also wanted to make its employees more aware of their carbon emissions when traveling, TripActions claimed.

“Unilever is committed to ensuring that our employees are empowered with the right technology and lean processes that help them to thrive in this highly digital future of work,” said Mithlesh Singh, Unilever’s global travel process, employee experience and transformation manager.

Australia’s Corporate Travel Management has managed to convert the recovery in global business trips into a small profit, after more than two years of tough trading conditions.

It was boosted in particular by winning large accounts off rival agencies, according to CEO Jamie Pherous, and three pandemic-era acquisitions, the most recent being 1000 Mile Travel Group, an all-share transaction worth $1.3 million carried out last month.

The Brisbane-headquartered agency reported a 2022 full-year profit of $41.4 million on an underlying earnings before interest, taxation, depreciation, and amortization (or EBITDA) basis. That’s for the 12 months up to June 30, 2022, and follows total transaction value of $3.51 billion — more than three times the $1.12 billion recorded in 2021. Revenue was $269.1 million.

In 2021 it made a loss of $5 million, on an EBITDA basis.

New Wins

Speaking during an earnings call on Tuesday, Pherous said new clients were contributing to its results, with those clients having moved from its competitors, rather than previously having had unmanaged travel programs.

“We’re winning a lot of business and most of it’s off peers,” he said. “A lot of peers are in difficult positions and can’t reinvest in technology or people at the moment.”

In its 2022 first half, which covers the six months to Dec. 31, 2021, it won $3.27 billion of new corporate business. That amount equates to how much those companies spent on travel during 2019.

“We’re one of the very few (agencies) that can demonstrate we can convert recovering activity into revenue and profit before tax,” he added.

The CTM boss also played down any concerns over staffing levels. It recruited 950 employees in the 12 months, and more than doubled staff in its recently acquired Helloworld division from 125 to 285 people.

Pherous also said that CTM had an “out of the box” recruitment strategy.

“We’re finding people from outside the industry, and put them through our academy. Our senior executives talk about their youth and exuberance,” he said. “We’re nearly at the resources we need. We think it’s critical, we’re not in that race to barter and bargain for staff.”

This is the main event. Of course the Global Business Travel Association has held previous conferences in San Diego before at the city’s waterfront convention center — but never after such a drawn-out downturn.

The association did manage to squeeze its annual convention in last year, in Chicago, but mostly minus the European contingent who were barred from traveling to the U.S.

So it’s back at full pace, with an expected 4,500 delegates here over Aug. 14-17 (down on the usual pre-pandemic 7,000, but this year organizers claim 1,000 buyers.) The mood is mostly optimistic, with delegates surprised at just how little airline and airport disruption there was, and happy to be able to network again; it’s the first time for many people in years.

But again, unlike previous conventions, has there ever been so much uncertainty about what’s ahead? There’ll be some more clarity on Monday, with the association publishing its Annual Global Report & Forecast 2022-2026.

In the meantime, here’s a few questions.

Is This Still a $1.4 Trillion Industry? This was the amount spent globally on business in travel in 2019. That figure is still quoted by travel companies in presentations and still seen as a universally accepted benchmark. But it’s time to update that. The real answer is no one really knows, not just because the pandemic disrupted travel over the past couple of years, but because it’s yet to settle down into measurable patterns, thanks to that hard-to-define mix of business and leisure travel, remote working and “company retreats.” It may take years.

Spending was forecast to have halved to $694 billion in 2020, based on its 2021 release of the Outlook, with slow growth until recovering to above more than $1.4 trillion in 2025.

The fact is it could be way more than $1.4 trillion. We’ll have some more concrete figures when we get our hands on the 2022-2026 forecast, published Rockford Analytics, on Monday. In particular it will be interesting to see the methodology. Which links to the next question…

Is a Recession Coming or Not? This convention brings together suppliers and travel buyers. It’s the ideal setting to test the mood regarding future booking levels. In a recession, marketing and travel tend to get cut the deepest. So how are those forward bookings looking? Are the tech companies, who are already slowing or freezing hiring, cutting back further on travel spend? How are budgets shaping up? Airlines and hotels may be reluctant to share such information, but corporate buyers may have some clues. Of the 1,000 travel buyers in attendance, they’re representing 555 companies, of which 324 are new for this year’s convention.

Will Company Retreats Go Mainstream in 2023? With remote working and vacant offices a fast-growing trend in 2022, will offsites, onsites, retreats and the like make up for any shortfall in traditional business travel. Pampering retreats don’t come cheap for the more global organizations, so offer airlines a valuable source of revenue. The internet is rife with LinkedIn-style guidance on how they should run their retreats, and how often, but hopefully travel managers from the bigger firms like Cisco and PayPal who are gathering over the coming days in San Diego will offer some clarity.

Corporate hotel booking platform HRS has bought PayPense, as it pushes further into expense management.

Terms of the deal, announced on Thursday, weren’t disclosed, but the acquisition follows its purchase of billing company Itelya in 2021.

Staff at Germany’s PayPense will officially become HRS Pay employees when the acquisition formally closes in August.

Interestingly, HRS now describes itself as a “global corporate travel and payment technology platform.” HRS, which stands for Hotel Reservation Service, said buying PayPense enhances its “growing compilation of efficient corporate payment offerings.”

PayPense is used by companies to let employees use digital payment technology to pay for all work-related purchases. That helps ensure compliance to budgets while also capturing relevant data for auditing, steering and even sustainability metrics, the company said. Using supplier and localized data, PayPense can capture carbon emissions of individual expenses.

“With the full integration of PayPense, our complete end-to-end spend management platform provides unmatched visibility of level-3 data, multi-category invoice digitization, and superior VAT reclaim automation — all available globally via any payment provider,” said said Kurt Knackstedt, chief growth officer at HRS Pay.

Taxi tech company Uber has just recorded its busiest quarter, with gross bookings reaching an all-time high of $29.1 billion in the three months to June 30, 2022. That number’s up 33 percent on the same period last year.

However, losses prevail. Uber posted a net loss of $2.6 billion, with a $1.7 billion net headwind relating to its equity investments, mostly tied to the revaluation of its Aurora, Grab and Zomato stakes. The net loss also includes $470 million in stock-based compensation expense.

For its first quarter it reported a net loss of $5.9 billion, so the momentum is there, particularly from its business travel division.

Overall, trips during the quarter grew 24 percent year-on-year to 1.87 billion, or 21 million trips per day. Revenue grew 105 percent to $8.1 billion, compared to the 2021 first quarter. There was a slower pace of growth for its food delivery unit though, where gross bookings grew 7 percent year-on-year to $13.9 billion.

That may be because fewer employees are ordering takeaways, and instead jumping in an Uber to get to the office. Uber for Business revenue almost doubled in the quarter, growing 105 percent year-on-year to $8.1 billion.

Managed Uber for Business, its “actively managed” portion of the business through Uber’s account managers and sales team, represented 29 percent of Uber for Business’s gross bookings, compared to 25 percent in the second quarter of 2021.

“We’re really selling to significant enterprise customers out there, both in the tech space and the non-tech space,” said CEO Dara Khosrowshahi during an earnings call on Tuesday.

“A lot of these enterprises, some of them are going back to returning to office, some of them are not … the champion use case that we’re seeing with U4B is essentially the business traveler getting out on the road again. And obviously, a sales call over Zoom is one thing, but if the salesperson comes in to see you in person, it gives a different impression and we’re seeing our U4B clients invest in getting their teams on the road.”

Airport traffic was also recovering, growing 139 percent year-on-year, and 49 percent on the first quarter.

The results came out just a day before it launched Uber Travel in the UK, which includes a tie-up with Omio.

In June, Uber for Business said it was taking steps to make it easier for travel managers to nudge their organizations into more sustainable modes of transport, including price-matching Uber Green trips against UberX.

Airports can do no right at the moment, caught between passengers baying for blood and airlines that just want to fly people.

On Friday Frankfurt Airport became the latest hub to cut flights in a bid to ease delays and cancellations.

But London’s Heathrow, which is the UK’s biggest airport, is under fire for taking action it hopes will improve operations.

As Emirates rejects its passenger cap, one UK-based association has called Heathrow’s plan an “outrage.”

“The Heathrow passenger cap is an outrage for business and leisure travelers,” said Clive Wratten, CEO of the Business Travel Association. “The arbitrary daily passenger number has been selected done without consultation with airlines and the wider travel community. This is a betrayal of all UK travelers, leaving airlines, travel management companies and travel agents to pick up the pieces.”

He called for Heathrow to be more “transparent about their problems.”

Two UK government bodies, the Department for Transport and Civil Aviation Authority, have also requested John Holland-Kaye, Heathrow’s CEO, provides a “credible” recovery plan to get the airport back to business, according to reports.

Meanwhile, the Global Business Travel Association is putting pressure on the European Commission to address staff shortages.

It argued “business travel momentum” was being threatened because the current six-week background checks required for employees working at airports and in the airline sector was causing a bottleneck. 

“Staff shortages are having a significant impact on travel programs and are threatening to affect the speed and trajectory of recovery of the business travel industry,” said Catherine Logan, regional vice president, Europe, the Middle East and Africa. “The Global Business Travel Association is calling on the European Commission to prioritize and expedite the needed safety background checks to help alleviate the pressure at airports.”

The UK has already accelerated national security checks for new airport employees, but will that be enough for Heathrow? Passenger numbers are set to soar in a couple of weeks when families begin their summer vacations, which could compound an already complex situation.

Australia’s Corporate Travel Management has bought 1000 Mile Travel Group in an all-share transaction.

Terms of the deal were not fully disclosed, but on Friday CTM issued 106,336 fully paid ordinary shares to Zazi Pty Ltd, in its capacity as trustee of the Zazi Investment Trust, as part consideration for the acquisition of 1000 Mile Travel Group.

This element values the deal at more than $1.3 million.

Founded in 2015, 1000 Mile Travel Group is a network of independent travel experts who handle corporate, group, cruise and leisure bookings.

CTM said the acquisition will help it expand its “independent consultant footprint” in the small and medium enterprise market in Australia, the UK and North America — a region where it’s been heavily investing over the past two years.

CTM snapped up U.S.-based Travel and Transport for $195 million in September 2020, months after acquiring Texas-based Corporate Travel Planners.

Closer to home it recently bought Melbourne-based Helloworld Corporate for $127 million.

The deal comes at a time when travel management companies are desperately seeking to recruit more consultants to cope with renewed demand for business trips.

“Our business was established to meet the needs of the independent corporate travel business owner market, and our business model has grown from strength to strength,” said Ben Ross, 1000 Mile Travel founder and managing director. “That model has never been more in demand than it is in the post-pandemic environment, and we’re excited to take the next step of our growth journey with CTM.”

CTM founder and managing director Jamie Pherous added the agency was “well-placed to expand the 1000 Mile Travel model into our largest markets of North America and the UK.”

Software giant Microsoft, a close collaborator of technology firm Amadeus, is moving its employees over to its Cytric online booking tool, which they will now use to plan, book and change business trips.

This deal follows a similar client win with Accenture, with the consulting giant also a close partner in helping Amadeus integrate deeper into Microsoft’s 365 platform, including Teams and Outlook.

Microsoft will roll out Cytric to a selected group of employees first, with the initial phase including the rollout of Cytric Easy and the integration of Cytric Travel into Microsoft 365.

“This milestone lays another foundation block for integrating technology into the travel booking and in destination experience,” said Eric Bailey, global travel director for Microsoft. “We want to simplify every aspect of business travel for our employees, Cytric does this with its intuitive user experience.”

In 2020, Microsoft spent was $44.2 million on flights in the U.S., down 85 percent from its $275 million 2019 volume, according to a BTN ranking, which noted its booking tool was SAP Concur in that year.

Amadeus announced the global strategic partnership with Microsoft in 2021. It includes migrating to cloud technology, as well as exploring new products and solutions, including leveraging its Xbox gaming console’s virtual reality capabilities to explore the metaverse, and potentially adding travel features to LinkedIn.

Rudy Daniello, executive vice president at Amadeus Cytric Solutions, added Cytric would help “push the boundaries of what the corporate travel sector has seen until this point.”

In 2020, Amadeus rival Sabre announced a partnership with Google.

American Express Global Business Travel, Shell and Accenture have teamed up to launch Avelia, a so-called book-and-claim platform designed to help businesses buy sustainable aviation fuel.

The book and claim model allows companies to pay for the fuel, and claim the benefits, even if it’s not available at their departure airport. The fuel is instead fed into another aircraft in an airport where available.

The goal is to drive down the costs of a fuel that’s between two and eight times dearer than conventional jet fuel.

“Once book-and-claim is approved by industry bodies as an acceptable form of emissions reduction, Avelia could enable airlines and companies who choose sustainable aviation fuel to authenticate, record and report the associated emissions reduction benefits of the fuel towards their voluntary environmental, social, and corporate governance reporting, regardless of where in the world the fuel is used to fuel a flight,” the company said.

The model is also used when purchasing “green electricity” and has been described as one of the most suitable solutions by the European Union. “It balances the fuel’s technical potential, the administrative burden for the aviation industry and fundamental EU Emissions Trading System requirements, like fraud protection,” according to one study.

Drop in the Ocean

The road to decarbonizing business trips is a long one, however. It’s still hard to tell if there’s any meaningful impact. The fuel is still very expensive, and as a pilot program, Avelia will initially offer one million gallons of the fuel, which it claimed was enough to power almost 15,000 individual business traveler flights from London-to-New York.

Overall this pilot wants to demonstrate the credibility of the book-and-claim model. Avelia was developed by Shell and Accenture, with the support of the Energy Web Foundation, but wants to tap into the buying power of Amex GBT’s 19,000 customers.

Will they pay the premium?

“Sustainable aviation fuel is a key enabler of decarbonisation in the aviation industry, and it’s available today. However, it’s currently scarce and costs more than conventional jet fuel,” said Jan Toschka, president of Shell Aviation. “Avelia will help trigger demand for sustainable aviation fuel at scale, providing confidence to suppliers like us to further increase investment in production, and in turn helping to lower the price point for these fuels.”

Amex GBT recently formed an alliance with Shell to help increase the supply of sustainable aviation fuel.

Shell has committed to purchasing the environmental attributes equivalent to 100,000 gallons of the fuel over the pilot phase. It said it would increase that as soon as more of the fuel is available, as it wants to abate 45 percent of its corporate travel emissions through sustainable aviation fuel by 2030.

Sustainable aviation fuel can be made from plant or animal material, and can reduce lifecycle emissions by up to 80 percent compared to conventional jet fuel

“We’re calling on all companies to join us and share the costs and benefits of sustainable aviation fuel across the travel and aviation sectors,” said Paul Abbott, CEO of Amex GBT.

United Airlines and United Airlines Ventures last week announced they were buying at least 300 million gallons of sustainable aviation fuel from utilization company Dimensional Energy over a period of 20 years. United aims to be a “100 percent green net zero” by 2050, without the use of traditional carbon offsets.

On Sunday, Qantas Airways and Airbus said they would invest up to $200 million to accelerate the development of a sustainable aviation fuels industry in Australia to help meet the airline’s goal of lowering carbon emissions.

Despite the euphoria around the return of international business travel, a data analytics firm has predicted a gloomier outlook.

GlobalData has said it is unlikely to recover until at least 2026.

It’s singled out the complexity of business travel, which it said still faces several added layers of complexity that affect consumer behaviour, purchase decisions, and general operations.

“Despite some encouraging signs of revival for the overall travel industry in 2022, the business travel sector is witnessing a slower-than-expected recovery, particularly regarding international travel,” it reported.

Those challenges will persist over the next four years, it said, adding that another prominent disruption was the rising cost of living fuelled by the ongoing energy crisis, due to “low energy reserves due to the pandemic and the current geopolitical situation between Russia and Ukraine.”

These increased energy costs are putting further pressure on businesses that are seeing operational overheads soar, with the result that business travel is no longer a priority for companies, it claimed.

Its Tourism Demands and Flows Database also found that international business travel fell by 78.4 percent in 2020, before falling a further 7.9 percent in 2021.