WHILE corporate travel is returning, it is coming back differently. So, exactly what are the shapes corporate travel is shifting into, and how are corporate travel agencies adapting to service the new face of business travel? Sabre carried out a survey of travel agents and Travel Management Companies (TMCs) across APAC, which revealed these 10 key takeaways:
New priorities and partnerships
The majority of corporate travel agencies (84%) have changed their business priorities as a result of the pandemic. Agencies are now focused on optimizing costs and efficiencies, while meeting customer and business demands with fewer employees.
As recovery escalates, TMCs are laser-focused on priorities to capture this and grow their business. Just under two-thirds (62%) of respondents said they were focused on adjusting and/or adopting new revenue models over the next 12 months. 58% said a top priority over the next year was the integration of new technologies, while 56% said a key focus was to establish new partnerships with travel providers, cementing the importance of collaboration among industry players to accelerate recovery.
Technology adoption
To meet these new objectives, corporate agencies are investing in new technology. Four-fifths of respondents have adopted new solutions to manage Covid-19-related risk within the past two years. And, of those who haven’t yet invested in new technology, 42% say they plan to do so within the next one to two years. Of those who have already invested, two-thirds have adopted travel risk management tools, while 44% have invested in automated workflows, and just over a third have invested in virtual payment tools. 90% said adopting new solutions had moderately, significantly or extremely significantly benefited their business. Those planning technological advancements are looking at the same effective solutions.
The rise of internal corporate travel
It goes without saying that the majority of respondents (73%) said the re-opening of borders is the biggest driver to the recovery of business travel, followed by the lifting of further Covid-19 restrictions (64%). However, respondents also pointed to the rise of new corporate travel trends as key instigators of recovery and growth.
Half of respondents predicted that a rise of internal corporate travel will create recovery opportunities. As much of the world continues to work remotely, bringing team members together to enhance corporate culture is more important than ever, and the travel industry has an opportunity to facilitate that. Given that travel is still stymied in certain geographies, 45% pointed out the importance of emerging corporate travel markets, while respondents also said improved risk management policies from TMCs and agencies are necessary for business travel confidence.
Strong optimism and an increase in bookings
While leisure travel led early recovery, Sabre booking data shows a strong upwards trajectory of corporate travel activity, and this picture is also borne out by travel agencies and TMCs in APAC. More than two-thirds of respondents overall (agencies and TMCs) said they had seen an increase in bookings from corporate clients in the months from May to July. And, TMCs are describing an even more positive situation, with four-fifths saying they have seen an uptick in bookings over the same time period.
The big question is: When will corporate travel fully recover? And, there’s certainly a lot of positivity in the market, with more than four-fifths (82%) of respondents saying they expect at least a return to pre-pandemic levels within the next 12 months. 44% are predicting more business travel than in 2021, while 15% are actually expecting a corporate travel boom greater than pre-pandemic levels within the next year.
Recovery is varying from market to market
While most corporate travel sellers who are seeing a rise in bookings are reporting increases of not more than 30%, there are a notable 14% who say their corporate bookings have gone up by more than 50%. Industry recovery is happening at different speeds across the world, and there is no exception to this when it comes to corporate travel recovery in APAC. In Southeast Asia, 50% of respondents have seen an increase of between 31% and more than 50%, while most respondents in North Asia said their increase was between 0-30%. Notably, with travel restrictions starting to ease, Japan reported an increase of between 21-30% in bookings and a quarter of agents there saw an increase in bookings between 31-40%,
Corporate travel policies are easing and spend is increasing
Nearly three-quarters of agencies say corporate travel clients have changed their travel policies to adapt to a Covid-endemic world. While these policies were focused on restricting trips and travel spend in the earlier days of the pandemic, in the previous three months, respondents said the situation has improved and corporations are ready to send their team members out on the road (or in the air) again.
Survey respondents said the top three changes they have seen since the start of the pandemic are stricter policies on the justification for business travel, mandatory vaccinations before travel, and new budget constraints for corporate travel. However, within the last three months, corporate travel sellers are seeing a much more positive picture emerge. 55% say Covid-19 corporate travel restrictions are now easing, and 38% say total travel spend is increasing.
Switching to low-cost carriers (or vice versa)
While recovery continues apace, cost still remains a key corporate travel consideration, and many companies are making a switch to low-cost carriers (LCCs) for airline bookings. Just over two-thirds of those who took part in the Sabre research said they had seen a moderate or significant increase in LCC bookings. Global and international corporate travel sellers in particular noted a switch from full-service carriers (FSCs) to LCCs. In North Asia, the trend was particularly marked, with 42% indicating a switch from FSCs to LCCs.
Of those who said the LCC share of their corporate travel volume had increased either moderately or significantly, a third said this was guided by company low fare policies while 31% said it was down to traveller preference and 27% said LCCs offered more flight time options. However, there was also a portion of corporate travel sellers (24%) who noted a decrease in bookings with LCCs, largely as a result of ancillary fees and because they want more LCC content on Global Distribution Systems.
Restrictions to recovery
Corporate travel is returning, but some respondents are concerned about barriers to full recovery. Survey respondents ranked virtual/hybrid meeting formats as the biggest barrier holding back corporate travel recovery. This was followed by stricter company travel policies, and inconsistent government Covid-19 measures.
Information and flexibility are key
While the desire to travel remains high, so too does the complexity and confusion that has reigned throughout the pandemic. As a result, corporate travellers place high priority on information and flexibility. Corporate-facing agents said the top new demand they were seeing from clients in the past three months was for information on country-specific entry requirements. This was followed by flexibility in re-arranging travel schedules and information on duty-of-care resources, such as emergency and medical contacts while on a business trip.
Hygiene matters, but so does sustainability
No one ever wants to get on a plane or stay in a hotel that looks less than clean. But, travellers now equate cleanliness with health more than ever before. When listing the top personalization demands from corporate clients, respondents said only choosing airlines and hotels that meet stringent hygiene standards came out on top. The next priority was for transport add-ons such as taxi services or car hire. Interestingly, now that recovery continues to gain momentum, sustainability is also top of mind. Respondents said sustainable travel options were the third most important when personalizing a trip for corporate travel clients.
For, a more in-depth look at Sabre’s corporate travel trends research, go to: An increase in bookings, a switch to low-cost carriers, and a focus on new technology – Sabre survey reveals the shifting shape of corporate travel « Sabre
*Sabre surveyed 572 TMCs and corporate travel agencies over a 5-week time period to September 2022.
