The Business of Travel

rss

The Official Blog of the Global Business Travel Association


Week in Review

This week in business travel news, Inc. covered the latest GBTA study, in partnership with American Express, showcasing the Millennials' secret weapon for winning over businessSuccessful Meetings also covered the study, writing about Millennials embrace of business travel with a majority of the group saying technology can never replace face-to-face meetings to get business done.

In hotel news, USA Today's Road Warrior Blog talks with several industry CEOs about competing in an era where if you don't rank high on TripAdvisor, you don't even register with travelers. The Economic Times writes about the boosted confidence for hotel chains in India on the heels of a GBTA report forecasting double-digit business travel spend growth for the region in years to come.

According to IATA, more business travelers are opting to fly economy over premium air travel amid continuing fears over the state of the economy, reports Hotel Marketing. This dovetails with a story from Travel Daily News reporting that passengers today prefer deep discounts over comfort.

USA Today's Bill McGee reports on passenger dissatisfaction with airlines. He asks how many passengers may choose not to fly as discontent grows? He also cites a GBTA study on travel mishaps showing on average these mishaps such as airline disruptions can take nearly 11 hours to resolve and cost companies $1,154 in missed work. IATA wants to improve your experience at the airport, according to Travel Daily News. IATA called for a deeper partnership with governments to improve the passenger experience of security and facilitation processes.

Seven weeks after implementing a €16 surcharge on any tickets purchased outside of its websites, services centers and ticket counters, Lufthansa is facing a backlash, according to Travel Pulse. Rich Thomaselli cites a global GBTA poll showing 42 percent of travel buyers say they have decreased their bookings with Lufthansa since the surcharge went into effect. Reuters also covered the poll reporting that Lufthansa says the impact has been neutral so far.

Finally, I leave you with business travel hacks to make your next trip more fun from Examiner.com.


Millennials Want to Travel More for Business

A new study released today from the GBTA Foundation, in partnership with American Express, reveals that Millennials are significantly more likely to want to travel more for business than Baby Boomers (45 percent to 26 percent, respectively). In addition, a majority of Millennials (57 percent) believe technology can never replace face-to-face meetings to get business done.

The study dug deeper to find out how Millennials feel about many things related to business travel.

Airline and Airport Amenities
When it comes to airline and airport amenities, Millennials, not surprisingly, have different desires than Baby Boomers. When asked to select one amenity all airlines should offer, Millennials care more about free Wi-Fi on flights than Baby Boomers (30 percent compared to 17 percent) and are less likely than Baby Boomers to want free checked bags (34 percent compared to 47 percent). They are also much more likely to book a flight offering free Wi-Fi than Baby Boomers (49 percent compared to 39 percent).

AmExwave3_DesiredAmenitiesAirline

At the airport, Wi-Fi is again paramount for Millennials, with 54 percent looking for free Wi-Fi compared to 44 percent of Baby Boomers. In fact, it is even more important to them than getting through security smoothly. Business travelers overall rank getting through security easily (52 percent) top among airport amenities. When you break it down by age group though, only 35 percent of Millennials compared to 59 percent of Boomers find this important. As most Millennials are only familiar with business travel post-9-11 travel procedures, the current practices may not seem as laborious to them as older travelers.

AmExWave3_DesiredAmenitiesAirport

Hotel Habits
When booking hotels, it is very important for business travelers to be close to the place they need to visit for work (87 percent), however, all things being equal, three quarters (76 percent) also say they are more likely to stay at a hotel offering free Wi-Fi than at one that does not. When looking at other hotel features, Millennials are much more interested in having access to a pool or fitness center than Baby Boomers (53 percent compared to 40 percent) while access to a business center is more important to Baby Boomers (56 percent).

Corporate Cards Over Personal Cards
Business travelers overall are more satisfied with using a corporate card (77 percent) for expenses on the road than their personal card (62 percent) and Millennials show the greatest preference for using corporate cards rather than their personal ones.

Social Networking
Younger business travelers are much more likely to use social networking for a variety of purposes when traveling for work than their older cohorts. Whether it is to meet up with friends (46 percent compared to 31 percent of overall business travelers) or colleagues (33 percent compared to 24 percent) or to research company reviews (37 percent compared to 28 percent), Millennials much more often turn to social networking sites for making plans and decisions when on the road for work than business travelers overall. AmExWave3_SocialMediaByGeneration

Understanding the wants and needs of Millennial business travelers can help both travel buyers and suppliers to create a more satisfactory business travel experience for this newest group of road warriors. Stay tuned for another post on the GBTA Business Traveler Sentiment Index™, in partnership with American Express, to learn more about how business travelers feel about their travel experience and how those feelings affect their actual behaviors related to travel.


Government Shutdown More Than Just Political Theater

In a couple short weeks, we will face a political standoff over the debt ceiling and the prospect of yet another government shutdown a few weeks after that. An op-ed from GBTA ran on The Hill’s Congress Blog this week about the lasting and real impact this is having on the economy.

TheHillCongressBlog

I know the Trump 2016 reality show and the Republican search for a Speaker are what’s captivating viewers right now, but here’s a preview of the Fall political “blockbuster”: fiscal cliff II: the sequel. We’re just two weeks or so away from a political standoff over the debt ceiling increase and a few more weeks before the prospect of yet another government shutdown.

For some this is just political theater, but it has a lasting and real impact on the men and women who work in the government and the economy as a whole.

When a shutdown occurs, it has the potential to affect everything from airport security screening (TSA warned of possible delays in 2013) to passport delays (in 1996 more than 20,000 U.S. applications went unprocessed). But that’s just the obvious.

The real and lasting impact is the time, money and effort lost on contingency planning. Over the last few months, government agencies have had to plan for a shutdown, which means cancelling or postponing travel plans and general disruption.

Head over to the Congress Blog on The Hill’s website to read the full article.


Extended Stay Accommodations: Satisfaction, Preferences & Challenges

Earlier this month, GBTA released a study on extended stay accommodations in partnership with WWStay. It looked at usage patterns and preferences finding differences across generations and genders when it comes to U.S. international business travelers and also covered how extended stay accommodations fit into travel policies. This post looks into satisfaction, preferences and challenges for extended stay.

An overwhelming majority of business travelers (91 percent) are very satisfied or satisfied with their lodging experience on their last international trip of 5 days or more regardless of what type of lodging was used. Major differences are revealed however, when looking at satisfaction levels by type of extended stay accommodation, with much higher satisfaction levels at extended stay hotels (94 percent) and corporate furnished accommodations (87 percent) compared to accommodation rentals (74 percent).

WWStay1

The high satisfaction is not surprising, considering the hospitality industry invests heavily to ensure their customers are pleased with their visits. Satisfied customers create both the potential for a return visit and a positive review that could entice a new customer.

With nearly half of U.S. international business travelers staying at an extended stay accommodation for a business trip in the past year, we wanted to know why they preferred non-traditional hotel accommodations. The top reasons are fully equipped kitchens (45 percent), amenities (40 percent), the residential feel (36 percent) and cost efficiency (34 percent).

WWStay2

Many of these U.S. based international travelers, however, noted that they have challenges booking extended stay accommodations. The top challenges are minimum stay requirements (29 percent), limited number of accommodations (21 percent) and lack of guest reviews (20 percent). It’s no surprise in today’s sharing economy that reviews from previous guests would be important. Length of stay is also often dictated by the company, not the individual traveler, so a minimum stay requirement may keep them from booking.

WWStay3

To keep growing demand for extended stay accommodations, companies that provide them should address the challenges noted by becoming more flexible with minimum stay requirements, providing an up-to-date website listing amenities and guest reviews, and increasing the supply of extended stay accommodations available.

To learn more about this study’s findings, you can join a webinar on November 18.


Delivering Sustainability Results with Supplier Partners

Sustainability in Action… So far in my sustainability series posts we have talked about the principles, opportunities and benefits from creating a ‘Responsible Travel Program’. Let’s now look at a real-life example of how working with your suppliers can deliver a great program, and a significant return on investment.

autodesk

Autodesk is a global leaders in 3D design software. Headquartered in San Rafael, California, they employee over 7,800 staff, which includes over 3,500 travellers.

‘A company that has sustainability in their DNA’

Their first sustainability report was published in 2008. Since that time they have put in place a strategic plan including corporate carbon reduction targets, established wide ranging ‘Green Procurement’ best practices, employee engagement initiatives and much more. They have consistently disclosed details about their performance, in order to provide information to investors, analysts, customers, employees, etc. There is also a desire to share their approach, and encourage other companies to borrow best practices and ideas in the knowledge that Autodesk faces many of the same challenges they do.  

The Plan for Business Travel?

In 2012, as part of an ongoing effort to reduce their environmental impact, Autodesk challenged its Preferred Travel Suppliers to help “green” a traditional travel program and help contribute to an overall company target of 35 percent reduction in carbon emissions by 2018. A company preferred car vendor accepted the challenge. The program had four components to Autodesk sustainability success:

  • Increase usage of alternative fuel vehicles to 17 percent
  • Increase utilization of vehicles with a 28+ MPG average to 90 percent
  • Contribute to a total company reduction in CO2 emissions by 35 percent
  • Full utilization of On Demand EVs at Autodesk Corporate HQ locations in California.

Implementation:

Implementation of the program, developed by their U.S. Travel Manager, included:

  • Engaging and working closely together with their primary car rental vendor
  • The car rental company brought in their sustainability team
  • Metrics were reviewed to identify where potential reductions could be made
  • Key cities were challenged to pilot a Hybrid car program
  • Employee engagement and education program was devised and implemented
  • Annual CO2 reduction reports were developed to track progress
“Implementation of the program at Autodesk was simple and painless. Autodesk has a culture that embraces sustainability – it’s in our DNA. The key is to engage our supplies to ensure cars are available and then to socialize the results with our employees.” -Mark Papale.

Employee Engagement and Incentives:

In an effort to foster strong engagement in the travel program, the company offered incentives to employees to reduce their own environmental footprint:

  • Discounts on electric vehicles commuting (to purchase an EV vehicle as well as 12 charging stations that were installed at 111 McInnis)
  • Discounts on hybrid vehicles
  • Biking and public transit incentives

Results?

As at March 2015, all four initiatives are on track to smash the 2018 targets.

‘On track to lower CO2 and travel costs!’
  1. Increase usage of alternative fuel vehicles to 25 percent
  • Over 800 hybrid vehicles were added to the fleet
  • All monthly rental transactions for vehicle car classes driven, upgrades taken by employees and green vehicles rented, as well as average MPG by car make/model are audited
  • Total cost of for fuel charged to renters decreased by 39 percent
  • This can be directly attributed to hybrid rentals as less fuel is needed for the average trip
  1. Increase utilization of vehicles with a 28+ MPG average to 83 percent
  • Limits were put on the booking tool - travellers allowed to rent hybrids first and then rent mandatory mid-size or fuel efficient vehicles
  • Utilization increased in vehicles with Avg. 28+ MPG, from 35 percent to 83 percent between year-end 2012 and the end of Q1 2015
  1. Lower total CO2 emissions by 35 percent
  • Autodesk has reduced its total emissions by 27 percent over its 2008 baseline.

The goal is to have 100% adoption by Autodesk employees by 2018.

These efforts to reduce Autodesk’s business travel incentives are part of a suite of other initiatives to reduce Autodesk’s overall environmental footprint. These include a commitment to power Autodesk’s business with 100% renewable energy and transportation incentive programs for employees to reduce their own footprint. To find out more, see Autodesk’s Annual Sustainability Report

An inspiration to us all!!

GBTA members can read the full case study on Autodesk on the GBTA Hub.

Stay tuned for my next post in about two weeks. If you can’t wait until then and want to learn more now, visit our Project ICARUS website.

I welcome your views and comments. Please feel free to comment below or email me at bharrop@gbtafoundation.org.


Travel Buyers Show Strong Support for Current Distribution System

On September 1, the Lufthansa Group implemented a €16 per booking surcharge on travel purchased anywhere other than its websites, service centers and airport ticket counters. This morning we issued the findings from a new global survey conducted by GBTA and its European partner network showing 42 percent of travel buyers surveyed have decreased bookings with Lufthansa since it implemented this surcharge.

Additionally, 93 percent of those surveyed are currently not considering the option to book directly on Lufthansa’s site and 39 percent are seeking alternative carriers. Only 2 percent of travel buyers surveyed said that they would book directly with Lufthansa to avoid the €16 fee.

We believe that the booking surcharge strategy has effectively backfired. The resulting actions demonstrate the high value that travel buyers place in the existing distribution network. The efforts by Lufthansa to fragment the distribution system by artificially adding cost is not working.

As the voice of the business travel industry and the corporate travel buyer, GBTA believes that the surcharge is a direct price increase to managed travel programs with no corresponding benefit. It could also ultimately lead to decreased price transparency if carried out by not only Lufthansa, but other airlines in the industry.

*GBTA’s survey of global traveler buyers was conducted online between October 14 and 19. In total 434 travel buyers representing an estimated $44B in global buying power participated in the survey.*


BRICs No Longer a Bloc for Business Travel Growth

This morning we released findings from GBTA’s BTI™ Outlook semi-annual forecast reports on Brazil, China, India and Russia, sponsored by Visa, Inc. Our VP of research, Joe Bates, is also presenting the results this week at ITB Asia in Singapore. In the latest round of forecasts, we found the BRICs are no longer acting as a bloc when it comes to business travel.

BRICbti2015H2

China and India business travel will continue to grow at double digit rates over the next two years, a clear indication of the resiliency and strength of both economies. Despite recent economic turmoil, China business travel spending is projected to grow at 11.2 percent in 2015 and 10.7 percent in 2016. China is poised to become the global leader in business travel by mid-2016, with business travel spending forecasted to increase by more than 60 percent from 2014 to 2019.

Additionally, strong momentum powers business travel growth in India, projected to be 11.1 percent in both 2015 and 2016. This is a reflection of an improving business climate under Prime Minister Narendra Modi, as well as the high levels of domestic economic activity.

On the other hand, domestic business travel in Brazil continues to weaken as unemployment has hit a five-year low, consumer spending continues to slow and the Brazilian Real has been devalued. Russian business travel growth faces serious headwinds as well. In total, GBTA expects business travel spending in Russia to fall 17 percent in 2015 to $17.5 billion USD.

A decade ago, it looked like these four nations would develop in lockstep, with high rates of growth across the board. But their paths have diverged sharply as a result of the unique political and economic situations in each country. China and India continue to be business travel juggernauts, a reflection of the underlying strength of both economies even in a tough global economic environment. Brazil and Russia, on the other hand, face growing economic turbulence, turmoil and uncertainty.

Stay tuned for future posts from our research team digging deeper into the forecasts for each country.


Companies Must Address the Glaring Gap in Ground Transportation Policies

American business travelers are masters at understanding the planes, trains and automobiles that we all rely on.

We know just when to arrive at the airport so we can make it through security and walk onto the plane. We know which train is likely to be on time, and which one is always delayed.  And we know how to avoid the lines at the rental counter.

But there is a new service, which many business travelers find convenient and even innovative, but have little understanding of its impact on our business, our safety and the duty of care that travel providers must provide to their travelers.

This service is transportation network companies – or TNCs for short. These are the popular ride-sharing companies that connect consumers with drivers through mobile applications.

In our personal lives, we can all make our own judgments about whether these services are safe, have adequate insurance and do deep enough background checks and driver training.

When it comes to our businesses, we don’t have that luxury. According to a recent survey conducted by GBTA – 29 percent of companies have evaluated the pros and cons, and have made thoughtful decisions about whether these services are appropriate for their employees.

Five percent of companies have made TNCs their preferred ground transportation alternative, while 24 percent have policies specifically prohibiting their use.

GroundTransportStudy_TravelPolicy

But that leaves approximately 71 percent of companies where TNCs are an acceptable option, but while these companies are reimbursing employees who use TNCs, many may have informal, ad hoc or no policies in place regarding TNCs. That creates a glaring gap that puts businesses and travelers at risk.

In the same survey, we asked travelers and travel buyers (those who set companies’ travel policy), what are the most important factors that go into making a decision about what kind of ground service to use.

Both groups — in numbers upwards of 80 percent — said travelers should feel safe; the vehicles they use should be safe; and pick-ups and drop-offs should be on time. This makes total sense – safety first, followed close behind by the ability to get where you need to be, when you need to be there.

GroundTransportStudy_DecisionFactors

But when we looked deeper at the data, we discovered a blind spot, directly related to duty of care responsibilities.

  • Only half of travel managers and business travelers are aware that TNCs may be exempt from regulations and vehicle inspections.
  • Just three-quarters of them are aware that TNCs have less driver training and requirements than other options.
  • And nearly two-thirds know that TNC drivers typically have less insurance coverage than other providers.

When this information is taken into consideration, seven-in-ten travel buyers indicated that they are “very concerned” about the safety of TNCs for their business travelers, and half of business travelers feel similarly.

So what should businesses and travel buyers do to address this gap?

Rather than have informal and ad hoc procedures in place, businesses should do their due diligence, determine what’s right for their company and put a formal policy in place.

That will ensure that their company is protected in the event of an accident, or worse. And most importantly, it will help ensure that their employees are safe and secure.

As an academic matter, most people in the travel industry are impressed with the innovative technologies and service that TNCs provide. And many travelers find TNCs to be a convenient option.

For businesses, however, convenience is not enough. Businesses have to think through impacts on a wide range of business critical activities – from safety and security, to liability concerns, to legal and financial implications.

Ride-sharing services are no longer a novelty. The businesses today that do not have a formal policy in place regarding TNCs should give serious thought to the pros and the cons that these services create, and put a proactive policy in place to protect their business and their employees.


Airfares Drop Due to Plunge in Oil Prices, But Rising Fees Negate Savings

The GBTA Foundation released its quarterly U.S. business travel forecast last week. It included a projection that average airfares have dropped to $379 this year, down from $392. This is a long anticipated drop for consumers due to the collapse in global oil prices. BTIBlog1

I talked about this phenomenon with Fortune’s Chris Elliott who wrote that while airfares are falling, it may not feel that way. This is because at the same time we are seeing airfares fall, we are seeing record revenue for airlines from ancillary fees – hitting more than $6.5 billion in 2014, and that is just for baggage fees and reservation change/cancellation fees.

BTIBlog2

The average business traveler and their travel buyer are likely noticing a continuation of expanding fees for various ancillary services from early boarding privileges and extra legroom to WiFi and on-board food. They may also see hikes in fees they are used to like baggage and change fees.

Profitable airlines are no doubt a good thing for our industry, especially when airlines reinvest that money not just to benefit their shareholders, but to benefit the consumer experience. Still, any time expenses for business travelers go up, it puts pressure on companies who are trying to stretch their travel dollars as far as possible. Looking long term, any increase in the cost of doing business, such as business travel, will lead to increases in prices for the goods and services these companies produce. This presents a challenge for everyone and will certainly be something to keep an eye on.


Week in Review

This week in business travel news CNN reported on the increasing bleisure travel trend looking at the new breed of traveler who is mixing business with leisure. They turned to GBTA’s ranking of the top 15 business travel markets to see where travelers are “splashing the cash” on these trips.

Top15_2014

Bloomberg covered the GBTA Foundation’s latest U.S. business travel spending forecast showing business travelers in the U.S. are taking more trips but spending less leading to slower growth rates for business travel spend. Bill Hethcock of the Dallas Business Journal writes, the softening in international outbound travel could mean DFW airport’s quest to add international connections could face headwinds. Chris Elliott at Fortune looks at the prediction of falling airfares compared to the rising airline revenues from ancillary fees and explains that while airfares are falling, it sure doesn’t feel like it.

Q3USBTI2015pic_OutlookSpendingandTrips

Airports are creating hotel complexes in an effort to become destinations themselves, according to The New York Times, while hotels in New York City are renting luxe coworking spaces in their lobbies writes USA Today.

JetBlue says it will be the first U.S. airline to offer free high-speed WiFi on every flight reports the USA Today Road Warrior Blog and Ben Mutzabaugh, also of USA Today, writes that there may be help on the way in the battle to fit your bags in overhead bins thanks to a new option called “Space Bins” from Boeing.

Chris McGinnis covers a GBTA report on booking behaviors for the San Francisco Chronicle showing travel app usage is surprisingly low. CWTpic2

Traveling to China? The New York Times tells you how to protect your devices and data.

Finally, Tnooz shares three wild ideas for the travel industry by 2020.