As more people dig out their suitcases to return to the skies, what challenges do business travellers face in 2023? And how can we better support them along the journey?
If you look at 2022 travel statistics, June of last year is when we really saw the world start to reopen and the number of tickets sold departing Australia skyrocketed tripling from January to May 2022 and held steady for the rest of the year.1
The entire travel industry is still feeling the pressure of such demand – and working hard to adapt to shifting customer expectations. Global capacity was 9.2% lower in January 2023 than the same month in 2019 2. And the limited number of available flights are at full capacity, and airports are buckling under the sheer volume of people transiting to visit family, go on holidays or take care of business.
Travel management companies (TMCs), who have been integral in supporting corporate travellers experiencing frequent cancellations, delays and schedule changes, are struggling to find enough consultants to keep pace. Meanwhile, customers are continously frustrated by travel uncertainty. They expect seamless experiences across the board – and aren’t afraid to look outside traditional channels to find what they need. And they’re more security conscious than ever.
“Businesses today will need to focus on creating efficiencies, reducing costs and increasing data accuracy to navigate the new normal in travel,” says David Newington, APAC Commercial Director for AirPlus.
What does the new normal look like?
With more than two decades of experience and insight into the travel industry, David says travel will become a more refined version of what it was pre-COVID. Here are five ways he says travel has changed since 2019.
Businesses venture outside preferred travel networks for better deals
With increasing demand for non-traditional accommodation such as villas, serviced apartments and Airbnb, hotel groups have started acquiring alternative accommodation providers to offer their customers choice. For AirPlus, diversification was about creating seamless experiences for its customers.
"For AirPlus, diversification was about creating seamless experiences for its customers. It’s no longer enough to pay for air tickets or hotels alone. We have to provide a holistic experience that matches each step of a customer’s journey from the moment they walk out the door right until they get back home,” explains David.
Safety is important – but it’s difficult to manage
While health and safety has always been at the forefront of business travel, it’s never been more important than it is today. Booking within approved networks is key to keep travellers safe financially.
“People want the same level of flexibility they had before, but with better services and the comfort of being covered by the company in case anything goes wrong,” notes David.
And with increasing prices and fewer flight options, travellers are often looking outside of their networks and travel policy.
“As a payment provider, we capture data for every transaction and can provide in-depth daily reports. Armed with this information, organisations can decide how they can expand the services offered within their policy – keeping their people safe while controlling their costs,” David says.
Corporates are travelling less, especially internally
Business travellers have different priorities than those flying for leisure.
“For a corporate traveller, a delay can remove the entire rationale for going. If you arrive four hours late, you might miss your meeting altogether.”
The cost of some international routes increased by up to 60% since 2019. In Australia, intercontinental fares increased from an average of $2348 in 2020 to $4839 in 2022 4. And with far fewer seats and flights available, it’s not surprising that fewer people are taking business trips. Especially when it comes to travelling between offices.
“Pre-pandemic a big proportion of our clients’ travel was between their offices. Now they question if the trips are necessary. There's an expectation among our customers those trips between internal offices will be used only to enhance culture and bring teams together, as well as deliver actions towards company objectives – but they are no longer unrelated,” David says.
Increased adoption of digital wallets and contactless payments
Australia was already ahead of the world when it comes to digital wallets and contactless payment, and COVID has only accelerated adoption of the technology. And it’s the same for corporate travellers.
“Digital wallets are used for everything in APAC. Business travellers expect to be able to pay for their hotel, an Uber, and other costs during the trip – and allocating those expenses on the fly. Workers don't tolerate going back to their desk and having to type expense reports anymore.”
And with increasing cyber security concerns across the region, businesses want to be confident their data and information is safe from attacks. This requires the right technology and form of payment that can capture data needed for reconciliation and expense management, while providing the highest level of security.
“When a single-use virtual card gets issued, payment goes directly to a merchant. It can only be used for that merchant for that transaction, providing a high degree of security,” David says.
Navigating the challenges ahead
Skyrocketing business costs coupled with a potential recession means managing travel budgets will be a significant challenge for corporates in 2023. Many may consider restricting or restructuring their travel policies to help navigate the chaos of travel.
“Businesses want the flexibility and low cost online tools provide. But they also want a robust support structure behind them to deal with cancellations and delays,” David says.
This means travel agents will need to invest heavily in technology that caters to every aspect of a trip, from booking and authorisation to capturing data and reporting. And that includes payment.
“They’ll need a payment partner that can integrate directly into their business, allowing customers to provide the right form of payment for the right transaction, online or offline,” explains David. “A partner that enables customers to take advantage of all a TMC offers."
Security and compliance will become priority
More companies will move towards virtual cards to not only capture data and improve efficiencies but also help manage increasing security concerns.
“Security is a constantly evolving landscape, so the less data that you have to transmit, the better. And it is affecting corporate travel, particularly in the APAC region,” explains David.
Personal identifications laws in China govern the amount of data that can be transmitted to third parties and across borders. India has introduced on-soil requirements, which prohibit companies from transferring data outside of India. As travel is international by nature, this could cause issues for multinational organisations.
“These companies have to partner with service providers that have the right type of compliance in the right market. Partners need to also offer consolidated reporting on where businesses are spending, where they're travelling, and how they can achieve greater savings and policy compliance.”
This is another area where AirPlus can help. The payment system provides compliance in all available markets as well as a centralised system that gives companies daily access to data and reporting. Businesses can track transactions easily – even multiple cancellations and re-bookings.
In uncertain, fast-moving times, with many travellers experiencing delays or disruptions, near real-time access to accurate data is incredibly important. As is offering people flexibility and seamless experiences – allowing them to simply book and go. These will help drive policy adherence, while also keeping people safe and the business in control.
1 AirPlus Business Travel Index Data
2 OAG, COVID-19 Air Travel Recovery, Global seats data, 23 January 2023
3 AirPlus Business Travel Index Data