According to the Global Business Travel Association (GBTA), the total U.S. business travel spend is forecast to increase 3.7% in 2016. In the Asia Pacific region, China is predicted to exceed the U.S. regarding total business travel spend. India is expected to have the greatest increases in business travel spend globally. The growth of global business travel spend is projected to break records in 2015, up 6.5% over 2014 at $1.25 trillion USD and is expected to expand 5.8% by 2019.
The following are pricing projections are for U.S. corporate travel broken out by supplier:
- Airfares are expected to increase gradually in most markets in 2016. Oil prices will be crucial in influencing airfares. If oil costs stay steady, the rise in fares should be moderate.
- Hotel rates will be driven up 4-6% on average globally by growing demand and decreased new supply.
- Car rental suppliers will raise rates due to competitive market conditions. However, companies with lower car spend may encounter rate increases of 2-4%. Larger companies will be at an advantage to see level or perhaps decreased rates, mostly if they switch suppliers.
- Meetings buyers will endure increased rates and reduced offerings. As demand continues to increase, supply will stay even. Availably will remain an issue while rates rise.
- Secondary expenses including food, car, and mobile services are being watched closely by travel managers. Suppliers that provide complementary amenities, free breakfast or other enhancement will be at an advantage
- Mobile Advances and Personalized Experiences. As technology continues to develop, travelers are escalating their reliance on mobile devices. A crucial part of business travel is having obtainable Wi-Fi, as well as ensuring devices will function internationally. Technological developments have allowed suppliers including airports and airlines to customize purchases based on preferences, which can be stored in profiles. This individualization is next progression in interacting with travelers and suppliers. Companies that can collect as much data as possible will be more successful with providing tailored services.
- Virtual Payments. Traveler managers have been increasing the use of virtual cards, which is helpful to maintain a uniform policy, secure payments, as well as stopping traveler mistreatment. Virtual cards can assist with user satisfaction while allowing for traveler flexibly.
- Traveler Safety. Duty of care will be significant in 2016 for those companies that have not addressed integrating it into travel policies and/or adding technology. Those corporations that have previously addressed risk management may need to assess new technologies such as traveler tracking.
- Sharing economy. Alternative ground transportation and accommodation options will continue to effect business travel. Attention will be on ground transportation rather than lodging, since it is not as complicated and does not involve traveler preferences. However, Airbnb is expected to continue to make efforts to expand its interest as a business travel alternative.
- “Bleisure” travel and changing policies. This relatively new term refers to combining a business trip with leisure travel and has become popular. Bringing family on business trips has become more accepted due to companies realizing this trend is an easy benefit that helps with employee retention, as well as alleviating some of road warriors’ stress. With younger employees often becoming business travelers, this incentive can also be used to appeal to new recruits. This concept is especially beneficial for international trips, where employees can get acquainted with locations, particularly important business details. As part of duty of care compliance, companies that offer these extended trips need to ensure it is added to travel policies and establishes definite guidelines. For the leisure portion of the trip, travel managers should consider booking, expense, and payment processes, and any limitations on locations or activities.