How do you define what is constantly changing? Easy, just add a “2.0”, a “3.0” and a “4.0” when the time requires.
The corporate travel industry has undergone massive change over the last few decades, and in many ways, it’s earned its current iteration - “corporate travel 3.0”. The name sounds sophisticated, but it’s not all that descriptive.
So what is corporate travel 3.0, and what differentiates it from the 2.0 and 1.0 versions before it?
Corporate travel 1.0, as the name implies, was an industry in its infancy, where the global distribution system was just finding its feet. 2.0 can be considered managed travel’s tech awakening, where location tracking, automated expense reporting, visibility into noncompliance and consolidated booking tools gave travel managers capabilities like never before.
Yet some believe we have entered corporate travel 3.0, where the industry is as much about the traveller as it is about the tech.
Below we explore this “new age” of corporate travel, outline how the traveller may have reclaimed centre stage, and discuss the challenges this presents to providers, managers and the travellers themselves.
From 1.0 to 2.0: Corporate Travel Comes of Age
Before we dive into the current state of play in the corporate travel industry (and where it’s going tomorrow), we have to understand how it has evolved in the 21st century.
According to Andrew Menkes in Business Travel News, the industry’s coming of age came with the catastrophic events of September 11, 2001 in the USA. He outlines how at that moment, businesses made the startling discovery that they had essentially no visibility into where their travelling employees were, and if indeed they were safe.
“The events surrounding 9/11 had a severe and long-lasting impact on our industry,” he writes.
“Hundreds of thousands of corporate travellers could not be located on 9/11 because they did not book their passenger name record - or part of the PNR, specifically the hotel piece, via the TMC, so there was no way to know where they were staying.
“As a result, travel managers enlisted senior management support to require (as part of travel policy enforcement) that all bookings be made by the approved online booking tool or TMC.”
Just as 9/11 transformed the way everyday citizens travel (after all, not even the TSA existed prior to the attacks), it changed the way employees travelled on business. Technologies like location tracking, risk management, emergency messaging tools, and significant visibility into employee spending all became requisite for travel managers to keep employees safe. And with these technologies came advances across the board for corporate travel, in areas like expense reporting, bookings and policy analysis.
Corporate travel entered its 2.0 stage, and all eyes were on employees booking through approved channels. Safety and budget depended on it.
Corporate Travel 3.0 is Owned by the Traveller
According to Arlene Coyle, travel managers began to fall behind the evolving demands of their travellers, and were suffering for it.
“In the managed travel world, we are still looking at business travel through the shrewd eyes of compliance, policy and expense,” she said.
“Simply, I believe there is so much more to travel than the expense. If all the players in the ecosystem - from TMCs to airport, to technology providers, hospitality players, and even eateries and destination services - were all to focus a little bit more on what the traveller wants, or is likely to want, I suspect we may be able to put the fun back into business travel and create happier corporate citizens.”
We’ve seen businesses investing more trust in their employees in efforts to keep their road warriors positive and productive while travelling. We’ve also seen businesses encourage leisure diversions while travelling on business, in an effort to reduce some of the stresses involved in international travel.
Yet according to Andrew Menkes, this trend towards “unmanaged travel” is an unsustainable and potentially dangerous movement.
“I challenge any company to let me know if they allow employees to buy their own office furniture based on their likes and dislikes. We are taking a step backward and bypassing protocols and technologies that were developed at a cost of hundreds of millions of dollars,” he writes.
“This will increase travel costs, increase productivity costs and lose valuable data, from both a risk-management and a supplier optimisation standpoint.”
Corporate Travel 3.0: Finding the Middle Ground Between Experience and Expense
Menkes believes that businesses can’t afford to allow their employees to travel unchecked.
“What we need is Managed Travel 3.0, a world where booking via the approved channel and booking preferred suppliers at a company’s negotiated rate is mandatory in order to be reimbursed,” he says.
However, travel managers need to find a balance between encouraging positive employee experiences overseas and ensuring compliance with travel policy. After all, employee overspending constitutes as much as a third of a business’ travel and expense budget. Whether the key to overcoming this challenge is actually relaxing control over employee spending is uncertain.
What is clear is that travel managers need a holistic, streamlined and flexible travel management platform to respond to challenges as they emerge. Facilitating bleisure travel and allowing employees to personalise their journeys is only sustainable with detailed analytics and visibility into expenses.
For more information on the trends that are redefining business travel, download your free eGuide, '5 Corporate Travel Trends to Watch in 2017' below: