From a partnership with Lufthansa that will enable business travelers to book direct on LH.com to one with services like Lfyt and HotelTonight, Concur’s announcements made at this week’s Global Business Travel Associatoon (GBTA) Convention in Orlando are all part of changes sweeping the lucrative corporate travel sector.
First leisure travel. Now corporate travel. The disruption of the lucrative and well-fenced-off space of global business travel has begun in earnest. Traditionally the domain of the large TMCs *(travel management agencies), this sector is huge.
According to the GBTA (Global Business Travel Association) BTI™ Outlook – Annual Global Report & Forecast, sponsored by Visa, Inc, global business travel spending will hit a record US$1.25 trillion in 2015, a 6.5% growth over 2014. Growth will remain strong through 2019, with business travel projected to grow 6.9% in 2016, 6.0% in 2017, 6.4% in 2018 and 5.8% in 2019.
As expected, China will be the growth powerhouse, tipped to grow by 61% over the next five years. Another market to watch is India. Indeed, APAC currently owns the largest share of the business travel spend market with 39%, followed by North America with 27% and Western Europe with 24%.
The stakes thus are huge and online travel brands which have built their base from leisure travel are eyeing the corporate space. After all, a traveller is a traveller, whether she’s travelling for leisure or business and she cannot be expected to switch modes just because it is a “company trip”.
Earlier this year, Booking.com launched Booking.com for Business, which is geared for small businesses without managed travel programmes – a massive chunk of the market, particularly in APAC which is dominated by SMEs. Company managers or administrators can create Booking.com for Business accounts for free, book rooms for their employees, or send their staff invitations and they can book the travel on their own. The administrators can coordinate company bookings and review reports by department, team or individual employees. Employees using Booking.com for Business can also book leisure trips, but only their business travel bookings will feed into company reports.
Expedia Inc has its Egencia brand which is expanding aggressively into Asia, and is set to open point of sale in Singapore and Hong Kong. In 2014, the company announced it had broken the US$5 billion gross booking mark, hit near 90% online adoption rates of its proprietary online travel platform and grew its global presence to more than 60 countries – a six-fold increase since 2010.
Airbnb this month announced an overhauled corporate division – its Business Travel programme centers on a dashboard for corporate travel planners, as well as accounting that offers centralised billing, financial reporting data, and information on employee itineraries booked through the service. Airbnb told Bloomberg in this report that about 10% of its rentals come from business customers.
Corporate travel is breaking free due to the emergence of the sharing economy and on-demand services.
Uber is also increasingly being favoured by corporate travellers. In its second quarter report, the expense management system provider Certify found that Uber made up 55% of ground transportation receipts, while taxis accounted for 43%. It was the first time in Certify’s history that expenses for the ride-sharing service surpassed those for traditional taxis.
“It’s clear that the sharing economy is here to stay for business people,” Robert Neveu, CEO of Certify, said. The company, which gathers its data from users of its management systems, has also seen an uptick in the use of Lyft and Airbnb.
Amid these developments, three partnerships announced by Concur, the SAP-owned the maker of software for travel-and-expense management, atthis week’s GBTA convention in Orlando, Florida, should be heeded for the implications it carries for anyone vested in the traditional distribution system.
• A partnership with Lufthansa that will enable business travelers to book direct on LH.com. Reservations made via the new Concur TripLink integration will not be subject to the recently announced DCC fees. The partnership with Lufthansa enables travel managers to have full visibility into travel wherever it is booked, capturing blind travel spending, while allowing business travelers to book direct.
Concur expense data shows one in five air bookings are made directly with suppliers today with no control or visibility for travel managers.
• A partnership with Lyft and HotelTonight to meet business travelers’needs foron-demand services. Use of next generation on-demand and sharing economy apps is rapidly growing among business travellers. Last year Concur customers saw a near four-times increase in Airbnb bookings and a five-times increase in Uber rides.
Said Tim MacDonald, executive vice president of Travel at Concur, “Our data shows half of business trips are booked less than two weeks out, which fuels the need for on-demand travel apps.”
A 2015 survey of travel managers found that more than 50% say the booming on-demand and sharing economies are a top trend impacting travel programmes.Supporting this observation, Concur saw a 7x increase in amount of spend by Concur customers expensing Lyft.Also, data from HotelTonight shows that more than 40% of people who book with the app have used it for business travel.
• The launch of TripIt for TMCs, a new programme that creates visibility for travel management companies (TMCs) within TripIt. The programme allows travelers to reach their TMC directly—anytime, anywhere, on any device—to change their plans or get help during their trip. Adelman Travel, Christopherson Business Travel, FCm Travel Solutions, FROSCH, Travel Incorporated, and World Travel Service, Inc. participated as launch partners in the programme.
What does all this mean? Well, just as leisure travel has undergone massive upheaval the past decade, so will corporate travel.
