Business travel has always been an industry subject to constant change.
The travel and tourism industry has rightly prided itself on its ability to adapt to new circumstances and requirements, adopt innovative technology and working methods and pioneer new approaches to making the life of the business traveller more efficient, safe and productive.
However, in recognising that ability to be fleet of foot and welcoming to business travel trends, it’s also important to highlight the many significant challenges which travel managers have had to face and will continue to confront in maintaining high standards of global business travel.
How has business travel changed over the past few years?
It would be difficult to identify many – if any – sectors of the business world which have been unaffected by the pandemic.
But for the business travel industry and, particularly for international business travelers, the impact of the global health crisis has been genuinely unprecedented.
By its nature, the corporate travel market and the business trips which it enables, depend on the ability to move freely across cities, countries and continents.
That ability was, of course, severely limited at the height of the pandemic and, even now, restrictions remain due to the continued threat which the COVID-19 virus poses to global health.
That was highlighted again at the beginning of 2023 with the introduction by a number of European countries, including the UK, of COVID testing for passengers arriving from China.
It was a move which signaled how swiftly the corporate travel industry can be affected by events beyond its control and emphasised how important it is for travel management companies to be aware of the threat of similar health crises in future.
Besides the complexities with these health risks, we have seen various other changes off the back of the pandemic, some of which are listed below:
Depleted capacity of resource in airports, airlines & hotels causing problems with travel delays.
Frequent cancellations & adjustments to travel schedules due to the capacity issue.
Disruption is no longer limited to peak times, making it harder for business travellers to plan their business trips.
A need to overhaul travel policies.
Increased focus on sustainability.
On the plus side, the travel industry’s response once the worst of the pandemic had passed demonstrates how resilient the business travel sector is despite the challenges it faces.
At the same time, the pandemic is just one of many external events which has had – and will continue to have - a significant impact on travel companies and corporate travelers and on the way in which business trips are organised.
In the last year alone, further upheaval has been created as a result of unanticipated events such as the Russian attack on Ukraine, the cost of living crisis and the huge rise in energy prices. Not to mention various cyber attacks on SAS airlines and multiple rail & airline strikes which has led to capacity caps at numerous airports.
Added to that, the UK’s departure from the EU continues to create issues for business travellers and for the industry’s ability to retain and attract the people it requires to match the growing demand.
All these factors have, to some extent, led to a scenario in which many corporate travelers are now seeing airports, airlines, hotels and car fleets on their business trip all affected by reduced capacity and resources as well as more frequent cancellations and schedule changes.
And, like many other sectors, the corporate travel industry continues to work diligently to become more sustainable and to find ways to service business professionals while also reducing its carbon footprint.
In summary, the world of corporate travel management has changed immeasurably in the past two years alone and there is nothing to suggest that the pace of change will slacken in the years ahead.
Is corporate travel still important for business success?
All the indications are that, despite challenging economic and geopolitical circumstances over the past few years, demand for corporate travel is showing signs of strong recovery for 2023.
While earlier predictions of a $1.4 trillion annual spend have now been revised, the Global Business Travel Association (GBTA) has forecast a $1.2 trillion spend for business travel in 2023.
The simple reason for that is that business travel remains absolutely essential because of its key role in reconnecting organisations both internally but, equally importantly, with external stakeholders in the commercial marketplace.
The enormous increase in remote working since the pandemic has been well documented and while many companies have now adopted a hybrid model which combines office and home working, it’s clear that, for an increasing number of organisations, working remotely is an option which many people want or expect and one which is here to stay.
However, making personal connections is invaluable in the commercial world and there is no replacement for a face-to-face meeting, whether the purpose of that is employee motivation and bonding, securing new business, closing a deals or assessing a potential new suppliers or customers.
In short, the business travel market and effective corporate travel management remains integral to economic growth.
Can we expect further growth for business travel over the next 12-months?
A recent poll conducted by the GBTA states three in four travel managers expect their company will make more business trips in 2023 and is expected to increase significantly compared 2022.
However, as we’ve already seen, forecasting likely trends in the corporate travel market for the year ahead, while always an inexact science, is even more challenging at present due to global economic and political circumstances.
That said, there are a number of areas in which clear trends are emerging.
The demand for more sustainable ways to travel is expected to accelerate in 2023, meaning businesses will be even more keen to demonstrate their commitment to sustainability. Travel managers will need to prioritise environmentally-friendly options when arranging flights & accommodation.
Businesses will need to be more conscious about investing in better & greener choices when travelling for business. This could involve choosing a more sustainable mode of transport, selecting accommodation that has a sustainability policy in place or it could even be as simple as having digitalised travel documents to cut down on the amount of paper being used.
In addition, many companies will have the option to participate in a carbon offsetting scheme, in order to compensate for their own carbon emissions produced via business travel activity. This can be done through either existing suppliers or separate green projects.
All in all, the world of business travel will have an increasing focus on sustainability as the year progresses.
Are Travel budgets Making their way back to 2019 levels?
Despite the challenges of recent times, business travel bookings and spending continue to make their way back to pre-covid levels. According to the GBTA, travel buyers have estimated that their companies' domestic business travel bookings have returned to 68% of their 2019 spend levels, which is up from 63% in Q4 2022.
However, companies that do not have an extensive travel budget, will have to come up with solutions to cut down on spend when employee travel is absolutely necessary for the business. Many businesses may look to send their employees on longer haul trips, with multiple layovers to make their trip more efficient, while reducing the number of travel bookings needed.
Ideally, your travel manager should be looking to assist you in formulating a clear, effective travel policy which provides your people with all the information and guidelines they need on expected costs.
Changes to business travel policies
Many businesses have adopted a hybrid-working approach since the pandemic, which has forced them to think about what their employees can, and can't claim back as expenses.
Savings made by businesses from employees working at home will require policies to be updated or renewed to include a new employee allowance.
Travel policies which may have been appropriate pre-pandemic may no longer be fit for purpose and, as corporate travel remains a key economic driver, it will be important for the business community and their corporate travel management partners to ensure that policies are updated accordingly.
Technology will become even more important for business travel
With online booking such an essential element of so much corporate travel, there are also signs that self-booking is increasing in popularity, particularly for younger business travelers who may be more comfortable with its use during the booking process.
In addition, your people don't want to be thinking about collating multiple receipts needed for an expense report while travelling on business. They want to be focusing on the reason for the business trip.
'Bleisure' travel: can employees mix business with leisure activities?
Along with a 44% increase in business travel airfares, which is expected to rise further in 2023, we can also expect to see a rise in bleisure travel with increasing numbers of business travellers using their time away from the office to accommodate leisure activities within their itineraries.
Remote working has been the driver of this. With employees able to work from virtually anywhere that has a good WiFi connection and charging points, travel can be extended by a few days or even weeks, depending on how far they have to travel.
For the best travel managers, safety will remain one of the top priorities in corporate travel.
The pandemic has emphasised the importance of employee security when travelling for business and other recent external world events have only underlined this further.
Marine & Offshore Travel are the core of Clyde's business
We have a 30-year track record of helping to move crews safely around the globe for some of the world's largest ship owners. As part of the Northern Marine and the wider Stena Group, Clyde live and breathe the Marine sector.
Our performance over the pandemic is testament to our expertise in this area, with one of our customers quoting that the industry average was 25% behind in crew changes in 2020; however, they were only 8% behind because they had Clyde as the trusted travel management company.
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We also work closely partner agencies across the globe to ensure we deliver the best marine and offshore fares, with the flexibility required for your company and crew.
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Want to know more about what to expect for business travel in 2023? Get in touch with our corporate travel experts today.