Challenging year ahead for corporate travel: BTS report

The results of the sixth annual Business Travel Show forecast suggests 2016 could be a challenging year for buyers with budgets increasing at a slower rate, half of buyers worrying about rising travel costs and compliance, new distribution methods and traveller wellbeing causing concern.

It’s not gloom and doom for everyone, however, as almost one-third (29 per cent) of buyers will have more money to spend in 2016, compared to 32 per cent in 2015. At the same time, a quarter expect budgets to drop, a 5 per cent increase on 2015.

The pressure on buying more for less seems to have lessened for 2016. 44 per cent of buyers will arrange more trips this year, a drop of 6 per cent on 2015, and 19 per cent will arrange fewer trips compared to 14 per cent last year.

76 per cent of buyers will have the same or more to spend on airline travel in 2016. For one-third, budgets will increase, the same as in 2015. One-quarter (24 per cent) expect budgets to shrink. Last year, just one-fifth had less to spend.

Other highlights include:

The use of low cost carries remains unchanged at 86 per cent.

In 2015, 26% booked more low cost flights, this year it rises to 27 per cent.

The number of buyers booking fewer business class flights increased again, from 38 per cent in 2015 to 42 per cent this year.

The number of buyers operating no time threshold for business flights dropped slightly from 33 per cent to 28 per cent.

ACCOMMODATION SPEND

One third of buyers will have more to spend on accommodation in 2016, the same as last year. The use of budget hotels dropped slightly. They now account for fewer than 25 per cent of bookings for three quarters (78 per cent) of buyers; down from 70 per cent in 2015.

TOP ISSUES FACING BUYERS

More than half of buyers (51 per cent) worry that travel costs will rise this year, which explains why cutting costs is their number one concern (moving up five spots since last year’s top 20). The following were given in response to an open question: What will be the biggest issue facing you as a buyer in 2016?

  2015/2016 2014/2015 2013/2014
  Cutting costs while maintaining quality Airline pricing – increases, lack of transparency and negotiation concerns NDC
  Increasing compliance Controlling costs and managing spend Travel management 2.0
  GDS content Compliance and enforcing policy adherence Data
  Risk management vs costs savings Increased hotel rates Sustainability
  Increasing hotel rates Traveller safety Meetings management
  Airline pricing Cost savings Mobile apps
  Supplier negotiations Ancillary fees Technological developments
  Securing value for money The role of the TMC Free Wi-Fi in hotels and on airlines
  Online adoption/booking Online adoption CSR
  Mobile apps Cost increases Terrorism
  Data and how to use it Balancing traveller needs while staying within budget Gamification
  Russia Online vs TMC pricing Relaxation of policy
  Changing traveller profiles Sustainability Airline bankruptcy
  Global purchasing responsibility GDS content Integration of social and travel tools
  Cost increases Supplier consolidation Ancillary fees
  Supplier consolidation Mobile technology & solutions Airline consolidation
  NDC Airline consolidation Risk management
  Discovering new destinations Availability and variety of low cost leisure tools Virtual meetings
  Last minute bookings The move towards traveller management Fuel increases
  Stakeholder management Stakeholder management Less reliance on TMCs

 

Buyers were also asked how they plan to change the way they manage travel this year:

 

1 Increasing use of online booking 53%
2 Increasing compliance 31%
3 Changing relationship with TMC 22%
4 Improved focus on traveller wellbeing and communication 9%
5 Use of data 9%

 

The Business Travel Show takes place at Olympia Grand in London from 24-25 February.

 

 

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