In terms of what’s expected for corporate travel trends in 2015, travel managers are expecting prices rises in most major areas of corporate travel but companies are unlikely to increase their travel budgets. American Express Global Business Travel Asia general manager David Reimer has predicted that although companies may change their travel policies in 2015, their overall travel budgets are likely to remain flat.
Domestic flight costs are unlikely to change, but international flight costs are more difficult to predict. In November 2014 the Amex Global Business Travel Forecast expected that international flights would fall by 3% in 2015, but at least two reports since then have predicted price rises of around 2.2%.
As the global economy recovers, the demand for hotel rooms is also likely to increase. Several destinations around the world, including Sydney, Hong Kong, Singapore and Tokyo, are already experiencing occupancy rates over 80%. In Australia, high occupancy rates – especially in Sydney, Melbourne and Perth – are expected to push hotel room rates up by 2-5%.
Meeting the budget
Most companies realise now that travel helps lift revenue, so rather than cutting travel to meet flat budgets they’ll be looking at ways where they can save money in flights and accommodation. There are several ways that companies can save money on travel in 2015 and, in the process, shape travel policies which will motivate employees to make their time away more productive.
Flight savings
Most large companies save on travel costs by having deals with airlines and by only purchasing business class seats on long flights. On paper, more savings could be made by switching travel to discount airlines. However, expecting employees to catch late-night flights from remote airports and then turn up to work the next day can have disastrous consequences on employee retention and productivity. To avoid this, companies can still make significant savings on airfares in 2015 by encouraging employees to book flights early, in groups, and with corporate discounts applied.
Accommodation savings
Companies have more room to move when looking at their accommodation budgets than in terms of transport. Employees often choose a hotel of their choice, but in 2015 companies are more likely to suggest that employees stay at company-preferred accommodation, which may only be an extra block or two away from the office.
Booking channels
Online sites and apps will dominate as the main channels for making travel bookings in 2015. Despite rising hotel prices, companies can save money in 2015 by taking advantage of corporate discounts. Many mid-size companies allow employees to make their own travel plans online, but all these independent bookings mean that the company may be missing out on corporate discount programs.
In 2015, savvy travel managers will provide user-friendly mobile sites and engagement programs to encourage staff to make the most of corporate discounts.
Meeting employee expectations
Over 50% of business travellers will be Millennials by 2020. Compared to Baby Boomers and Generation X’ers, Millennials have higher expectations about what the company should pay for while they’re away and are more likely to splurge on the company account. They also do more research online before they book, and expect more services from providers. More than half of Millennials would use peer-to-peer services such as AirBnB and Uber, which is significantly more than the uptake from older employees. In 2015 and beyond, travel managers will need to source out travel deals which cater for this growing demographic.
Modifying employee behaviour
More and more companies will use game strategies to engage their employees and modify their travel behaviour. Gamification strategies can be used for team building, productivity enhancement, training, health and wellness, sustainability and innovation. These contests and games can be effective tools for shaping travel behaviour and encouraging productivity.
About the author
Codie Beard is the Marketing Manager for Meriton Serviced Apartments, an Australian-based and operated company supplying alternate accommodation option to traditional hotel rooms. Since launching the brand in 2003, Meriton has positioned itself as one of the leaders in the Australian serviced apartments/hotel industry. Codie’s innovative and strategic approach allows him to produce marketing campaigns that have continually helped to grow the business throughout the existing locations, and to gain a foothold into Meriton’s new and upcoming locations. Reach him at codieb@meriton.net.au.
