top of page

Travel Management 3.0: The Professionalisation of Travel Management

Global business travel is predicted to see a 38% increase during 2022. By the end of 2024, volumes will have recovered to $1.41 trillion - pre-pandemic levels. But whilst spend may be recovering, it’s far from being business as usual.[1]


Remote working continues unabated, and organisations are now incorporating Working From Home (WFH) into HR policies. "The return-to-office date has died," Stanford University economics professor Nicholas Bloom recently told the BBC. "Endless waves of Covid have led most CEOs to give up, and instead set up contingent policies: if, when and how to return to the office."[2]


30% of the UK workforce is now working remotely at least once a week and new roles are increasingly based remotely.[3] Remote opportunities accounted for under 4% of all high paying jobs before the pandemic. Today, they account for more than 15%.[4][5]


The pandemic forced organisations to review their travel programmes, with some resulting changes set to apply for the immediate future. 71% of travel managers say their policies became stricter in the pandemic, although 61% expect this to be temporary.[6] 20% of travel managers say their programmes are now high touch compared to 9% pre-pandemic.[7]


Changing traveller needs and behaviours, travel-related risks and organisational objectives add up to a hugely different landscape, which means the travel manager’s role has also changed, and the next evolutionary phase in travel management companies’ value proposition has begun.


In this paper we will examine each of the factors enabling the professionalisation of travel management, and what lies ahead for travel managers.


The new workplace and how we travel

Despite predictions of a shrinking business traveller population making fewer but longer trips, the post-pandemic reality is that remote working will have two big impacts on travel managers.


First, they could find themselves dealing with a much larger traveling population than in the past. which will bring its own management challenges. Second, they might find themselves responsible for policies and decisions not previously in their job descriptions.


As the lines blur between commuting and travel, travel programmes may have to absorb some additional costs like parking and lunch for employees traveling in from out of town, or even local employees coming into the office on a non-regular basis.


Further evidence that WFH is here to stay comes from large companies that originally announced work-from-anywhere policies since backtracking, proving that ‘anywhere’ doesn’t mean anywhere after all. Travel managers will find themselves working closely with IT, HR, payroll, and other functions as organisations work out what works best in the new, new normal. [8]


The ability to work from home has changed the way we travel. WFH encourages more travel because workers of a greater need to collaborate, build team relationships and engage with others face to face. According to Deloitte, people who wish to combine work with play, known as ‘laptop huggers,’ will take two to four trips a year, compared with one to two for those who do not.[9]


Value of human connections

It’s all too easy to justify less travel in terms of cost savings and enhanced employee wellbeing, but the reality is we don't just travel for the sake of traveling. We travel to meet people and do business.


Organisations know that video conferencing enables employees to travel less but other areas of the employee lifecycle engagement need face-to-face interaction for which travel is unavoidable. From inductions and integrating yourself into a business as a new starter to collaborating effectively with your manager.


Pre-pandemic, onboarding new starters was straightforward. Now, employers need to teach their employees how to establish networks and relationships effectively. Educating existing employees on how to integrate a new team member remotely is vital to getting off to the right start. Plus, laying the foundations of new connection strategies that new employees can adopt ensures they can form relationships more easily. Employers also need to understand the true impact of remote working on employees’ wellbeing, both individually and collectively.


Although placing a financial value on human connection is impossible, we have to move away from thinking of business travel as purely an expense and instead consider that value in the context of why it's important for people to get together.


Bleisure

At a conference previewing the megatrends shaping travel in 2022, Kayak Chief Executive Officer Steve Hafner said, “When you work from anywhere, that means more leisure travel. If you’re liberated from an office, you can go to a lot of other places.”


The American Hotel & Lodging Association’s 2022 State of the Hotel Industry Report found that 89% of global business travelers wanted to add a private holiday to their business trips over the next 12 months.[10]


Few businesses’ travel and expense policies deal with ‘bleisure’, and if a traveller books a trip for business purposes and wish to combine that with leisure activities, then who pays - and how? Along with questions around insurance cover, and partners and children joining trip, organisations have a few considerations to unpick to make bleisure a reality for their employees.


Re-defining risk

The definition of risk has changed. Pre-pandemic, risk was categorized by trip duration and destination. Risk now begins with the employee’s willingness to travel.

Thanks to Covid, travel-related risk tops the 2022 priorities of employers, travellers, and travel managers alike. Risk now begins with practicalities like vaccination status, underlying health conditions or and their intended destinations.


Empowered employees now have a choice of whether to travel, especially on marginal journeys like a four-hour round trip for a single, one hour meeting. All are factors influencing attitudes towards travel which travel managers must consider.

Government ministers and civil servants aside, during the pandemic, it was easy for organisations and individuals to be compliant with the rules. Now, the brakes are being taken off, pent-up demand to attend events and engage face-to-face is being released, and risk is transforming once again


Business travel security will increasingly challenge IT functions in the same way as remote working security has done since 2019. Instead of packing phone and work laptop before heading to the airport, thanks to rising industrial espionage, and legal changes to downloading data at airport security lines, wiped laptops and burner phones may become mandatory. At the Beijing Olympics, athletes and staff were urged to bring only burner phones.[11]


So, regular communication pre, during and post-trip is critical. As a TMC, we also want to know that the steps we have taken to enable them to do those jobs also provided an enjoyable experience.


Flexible policies

Research published in August 2021 showed that flexibility, such as choosing transportation, accommodation and travel dates was business travellers’ most pressing need post-pandemic.[12]


With duty of care and wellbeing now a key consideration, some travel managers have gone from having a very restrictive policy to telling their travellers to do what they think is right; to ‘do the right thing.’ The problem with this approach is travellers need to understand what the right decisions are.


Companies have begun to empower their travellers to make the decisions that are right for them. As a result, policies are being reviewed and relaxed to the point of some companies stating, ‘do what’s right’. Some organisations still articulate expected behaviours but having to make the right decision without guidelines means travellers have no benchmarks against which to evaluate those decisions. So ‘doing the right thing’ can make travel more stressful, especially for new starters or infrequent travellers.


It’s the TMC’s responsibility to enable travellers to make informed decisions by providing a framework of guidance. Travellers want to feel safe and supported.


Travel Managers needs

Over the last two years, travel managers have taken on complex extra responsibilities, from disruption management, traveller guidance on Covid travel restrictions and changes to EU travel rules, to extensive new levels of reporting. Not to mention managing a return to travel that meets duty of care and sustainability goals.


During the pandemic, travel managers came to the forefront of strategic decision-making. Post-pandemic, corporates will have to consider whether to manage travel through a nominated Travel Manager or through a combination of people across different areas such as HR, governance, risk and data security. Strategically, travel managers need to consolidate this elevated status. To that end, the Institute of Travel Management (ITM) has launched a campaign to help buyers seize the opportunity.[13]


Meanwhile, there are a lot of unknowns out there and it’s our job as a good TMC to guide our clients through all the uncertainty. Historically, customers had around 80% of their volume contracted via preferred programmes. Now, the opposite applies. Volumes have dropped significantly, making it harder to negotiate and tougher still because few, if any customers are able to forecast their requirements with any accuracy.


Many travel managers recognise the limited value of 2020 and 2021 travel and meetings spend data, so instead compare against the last full year of ‘normal’ data in 2019, with known volumes and a more ‘restrictive’ view of managing travel to a new world where companies are having to re-write what they do and how they do it.


A good TMC will plug those gaps, negotiating fixed rates in core locations, taking advantage of Consortia rates or using dynamic programmes like our Accommodation First for locations where volumes are lower. Accommodation First gives Agiito customers access to rates in over 1,700 hotels in 600 locations which can be used to support negotiated programmes or until there is a better understanding of future demand.


A new value proposition

The pandemic threw a spotlight on the true value of the TMC being the layer of value we added to what was available in the marketplace. The GDS could not provide any information around Covid-secure hotels, so at Agiito we worked with our supply chain to develop our Covid-Shield ratings of hotels providing suitable support for guests.


We function as a filter so the traveller or the travel manager doesn’t have to assess multiple providers. Concisely, the bulk of the TMC’s value lies in the providing appropriate solutions compliant with the client company’s objectives and business needs.


The ability to strike the right balance between technology and personal service differentiates good TMCs from the not-so-good. The race to commoditise travel through automation in recent years has been replaced by a recognition that any system is only as good as its content and functionality.


The pandemic showed that the landscape can change quickly, and corporates need an intermediary that deals in facts relevant to each customer in terms of sector, policy, destination, and products. Agile TMCs, with the ability to respond quickly to market conditions to are trusted by their customers to know what traveller and guest experiences will be like. People and technology, relevant to each customer, is the killer TMC proposition.


TMC payment models

TMC pricing models are gradually changing. In 2020, the Business Travel Association called for the sector to develop an innovative approach to TMC pricing to replace a system that has been in place for over twenty-five years.[15]


The BTA called for clarity on pricing and transparency around pricing models: transaction fees, subscription fees and management fees and announced an industry-wide consultation, the outcome of which remains unknown.


The dominant model pre-pandemic, transaction fees worked for both travel buyers and TMCs whilst people were travelling but does not remunerate TMCs for the behind-the-scenes work required on a booking. Corporates prefer them because costs are allocated directly to budget centres and mitigates the need for central travel budgets.


Netflix-style subscription models ensure TMCs get paid for the services they provide but many corporates do not have centralised budgets. Another option is to charge subscription fees per traveller, with various levels for frequent and ad hoc travellers. The downside for corporates is potentially higher costs and added complexity.


Management fees are simple in concept but harder to manage. Once again, the lack of centralised travel budgets is an obstacle. Mix in hybrid versions of these models and the need for clarity becomes greater still.


Much will depend on which TMC services corporates place the highest value upon because they get a clear ROI, like account management, management information, programme negotiation and optimization. TMCs wants to cover all their bases and protect their income, so the future may be to menu price the services that remain relevant regardless of demand fluctuations.


The next RFP

Many travel managers will spend 2022 finding out what their future travel looks like, whether they need a TMC and, if so, how effective that agent is. The questions they ask of any prospective provider will centre on how they would service current market trends.


Many travel managers contemplating a change of TMC only have historic data to call upon, so they don’t know the problems they're asking the new agent to fix. This is why so few corporates have gone to market since the pandemic. They don’t know what the new normal is yet.


The coming months should see travel managers learn enough about their business to understand the problems they face in the new normal. The questions they pose to the TMCs should demand answers to challenges, around risk, cost reduction and sustainability. Overall, the questions will be based on a hierarchy of organisational needs.


Businesses whose needs have not changed since the pandemic are far and few. For most, an understanding of how those needs have changed will determine what they're looking for in a service provider. The relationship between corporate and TMC is not purely transactional; it is the provision of professional services.


Conclusion

Travel management now spans a vast array of ancillary services, especially those related to risk. From traveller tracking to Trees 4 Travel.[16] We expect to see the range of TMC services expand further, tailor-made to each customer’s specific needs, interconnected and delivered via channels specified by the customer.


TMCs are more consultative than transactional, providing advice and solutions to address gaps. That means being open to ideas and fresh thinking. The market may be full of consultants cut adrift from TMCs or implants, but there is no substitute for the breadth of knowledge, expertise, and technology solutions available from TMCs like Agiito.

 
bottom of page