Back on the Road! Will Business Travel Be the Same Again?
By ITB Community and Bertrand Saillet, Managing Director, Asia at FCM Travel
ITB Community had a conversation with Bertrand Saillet, Managing Director, Asia at FCM Travel, to discuss the challenges and opportunities as corporate travel finally resumes. With more markets opening up as they get far ahead on their vaccination programme targets, what does this mean? Will border controls and other restrictions still remain? What are the new rules that accompany this new state of corporate travel?
1. There is so much anticipation about the return of corporate travel. Please walk us through what is happening right now and how travel management companies (TMCs) are planning to get travellers back on the road.
This is a million-dollar question and it really depends on where you are in the world. One thing I can say for sure is business travel is not dead! I know there has been a lot of articles in the press about how much of business travel is going to come back and it is still very uncertain but what we do know is that when a country or continent is safe to travel to, business travel comes back very strongly.
The example of China is a good one. Our level of domestic volume in China is higher right now than it was pre-COVID. So definitely, when the environment is safe, people travel again for business.
The greater concern is more about border control, regulations around travel and also the complexity. It is fair to say that if there is quarantine, or many tests and processes to go through, this becomes obviously very bad for corporate travel because people want to keep it as easy as it can be in this current environment.
So, if you look at the situation in September 2021, Europe has picked up a lot during the summer, and now we are seeing a lot of bookings coming in for corporate travel, bookings until the end of this year which is very encouraging. The USA has also picked up massively domestically, not yet internationally as that is going to depend on the transatlantic route, and potentially with Asia which we are expecting to see in the coming months. There is also the re-opening of the intra-America network, where Canada is re-opening their borders to America, and expecting reciprocity.
Asia-Pacific is lagging behind the USA and Europe because every government has been extremely conservative when it comes to risk management, and there are a lot of border controls, quarantine measures to prevent the spread of the disease. In September, Singapore started re-opening international travel with the announcement of its Vaccinated Travel Lanes (VTL) arrangement with Germany and Brunei. This is first route in the region that allows people from each country to enter without quarantine on both sides which is obviously very encouraging for corporate travel. It did extremely well and we sold a lot of flights on that route.
Its success led to a slew of VTL arrangements with other destinations globally including the USA, other European markets, as well as destinations within Asia-Pacific including South Korea, Malaysia, Thailand and Australia, many of which has had their vaccination ramped up to a level where the governments found it acceptable to open up their country. The recent development of Omicron may have placed a setback on travel’s recovery and added uncertainties to the timing of a broader return to travel. While some companies are adopting a wait and see attitude on further development of the new variant, there are others who remain optimistic about the return of corporate travel.
2. The good news is that TMCs say travellers are optimistic about the return, with the caveat being as long as it is a safe one. What are the challenges of duty of care and what is the best way to manage it? Also, what are the upcoming trends you foresee at this current stage of recovery?
One thing that is key to duty of care is access to information. And this is something that every corporation around the world is asking for right now. We hear this a lot from companies—I want to know what is happening right now, in real time, in terms of rules, regulations and risk management, to make sure that my travellers can travel from point a to point b, in a safe manner with all the documents they need, to get across the different touchpoints.
Secondly we need to make sure that the travellers themselves know what they are doing, and that they have access to technology along the way. This gives them access to information on-the-go which shows that the company is taking care of them. It is also critical to work with a travel provider who is pushing the relevant information at the right time and making sure that everyone is safe.
Finally, it is about tracking and making sure you know exactly where your travellers are, what they are going through, pushing again the information that they need to know in each country.
It is all about this trio package right now—information, on-the-go technology and tracking to make sure you know where your travellers are.
So those are the key elements you need to ensure are covered in your travel programme or need to go over with your travel provider right now.
3. Corporate travel policies will need to be updated, perhaps even rewritten, to allow not only for COVID protocols but also the new hybrid way of working. In this regard, what aspects of corporate travel do you think will be most altered? What are some new corporate travel opportunities that will open-up?
Managing a corporate travel programme has always been complex. You need to take into consideration a lot of different elements—cost, strategies towards your vendors, everything you need to provide your travellers with. It can range from basic bookings all the way to technology solutions that make their lives easier.
Obviously around the basic policy element, that centres around what me, as a traveller am supposed to do, following the rules of the company. What we see more and more is that companies are asking for more clarity. And COVID has reinforced even further, the need to get well-documented policies which can be the foundation and core for everyone in the company to get through travel.
That is why offering the opportunity to outsource their travel management is a great value because travel management is complicated, it is evolving very fast. A lot of companies do not necessarily have the funding or the budget to have an in-house travel manager who will be fully dedicated. Sometimes the task could fall on a support staff who just needs to get the policy setup and shared with the rest of the company. That is why more and more TMCs are providing outsourced travel resource offering where companies can say ‘we need you to help us define this’ and then the job is done and that is what they pay for. This is something we see happening a lot in the near future because this is a big demand of a lot of corporations around the continents particularly Asia-Pacific.
4. Consolidation in the corporate travel space is already happening with recent deals. Are we going to see more of it in the near future when corporate travel plans for a comeback?
There are two levels of consolidation going on. The first is global corporations, who might have had a very fragmented programme in the past with a lot of different providers. But because of the complexity of COVID-19, many of them have had to rationalise their approach to travel policy, their rules across their programme. For example, if you want to provide your travellers with a consistent approach to duty of care responsibility, how can you do that when you have different providers along the way?
Therefore, consolidation is happening within global corporations where they are trying to rationalise their programme under one roof and integrate their buying under one (or two) TMCs, depending on the size of the company.
Secondly, this has an impact on local travel management agencies in many markets where it becomes more and more difficult for them to survive in this highly competitive field, as a lot of investment is required when it comes to technology, resources. The large global TMCs tend to expand and become bigger players as a consequence of that. I think this is a trend that we will probably see moving forward for a certain period of time because right now, we are at a crossroad where the pandemic is approaching stabilisation. Therefore, I think we will see a lot of consolidation continue to happen in the years to come.
5. Consumers are indicating a heightened interest in sustainability in all forms—environmental, economic, and social; and travel companies are differentiating their brands by taking the action on sustainability. How should TMCs demonstrate their sustainability credentials and what can they do to support corporates on this journey?
Sustainability is going to become the alpha and the omega in any company strategy, regardless of whether you are in the travel industry or in any other industries. Sustainability is going to drive a lot of decisions and strategies in the business moving forward which I believe is a very positive development.
When it specifically comes to the travel industry, we have been seeing for a very long time that travel is a big contributor to the carbon footprint or emission. There is a lot of work that is currently being done around that. I also want to insist that sustainability is much wider than carbon emission and that includes working with communities, making sure we focus on diversity in the workplace. It also includes the basics like what are we doing with our offices and flexible workplace policies, that includes commuting to work which obviously contributes to carbon emission as well. So a lot of those factors are being taken into consideration right now.
One thing for sure is that this is becoming a top priority for many CEO’s agenda. We have to work on very clear targets when it comes to sustainability so we can deploy an execution plan that will deliver on those targets.
One thing that we have a responsibility for as a TMC is not only to look at ourselves and build up our own strategy when it comes to sustainable directions, it is also about helping our customers to be more sustainable themselves.
We want to give them recommendation, help and support around their travel programme in particular, to offset some of their footprint, track it appropriately and make sure that they have an ecosystem of partners that they can work with. We want to make sure that they are very safe and well-covered in this area, so that they feel we are supporting them to achieve their goals.