FCM Business Travel Outlook 2018

business travel outlook
Travel News 28 Dec 2017

Poor economic growth prospects in South Africa are ironically driving an appetite for business travel across the border and particularly in Africa where South African companies have invested in 41 of the 53 remaining states on the continent.

In 2018, although the economic picture remains bleak, with improved air access across the continent expected, more open visa regimes and opportunities in a range of sectors, from financial services to communications, business travel ex-South Africa will continue its significant contribution to economic growth and business performance.

To drive cost savings, deliver efficiencies and improve the productivity and wellbeing of business travellers, who drive this business performance, a renewed focus on travel technology, traveller friction and turning big data into smart data will be key.

Enterprises will need to strategically analyse the data they have at their disposal to identify real exceptions and make concrete changes to enhance their ROI on the investment made in business travel.  In 2018, the mantra will be to convert big data into smart data.

South African companies will be under pressure to weigh the potentially negative effect that frequent business travel can have on the productivity and retention of staff, leading to traveller friction.  More consideration will be given to a traveller-centric programme – one which looks at ways of reducing the wear and tear experienced by travellers when they’re on the road for business – vs a cost-centric programme, where the only consideration is the price.

Business travellers in South Africa are becoming increasingly savvy. They want to use the same technology they use in the personal lives for business, and they demand services and products that are going to make them more productive on the road. They’re willing to pay more for time, comfort and convenience, but not for good service – that will be a given in 2018.

Adoption of technology tools designed to simplify life for corporate travellers by blending artificial intelligence with the expertise of a real travel consultant will increase in 2018 as business travellers seek platforms that can ‘move’ at their pace, help them to be more productive and eliminate the inconvenience. Self-service technology with support for more complex transactions at the touch of a button will be a key area of development in 2018.

Let’s look at FCM Travel Solutions top 3 trends in a little more detail:

 

1. Traveller Friction

 

travel frictionAn increasing focus for 2018 will be on traveller friction, which argues the merits of a traveller-centric programme that boosts employee wellbeing and job satisfaction over a cost-centric travel programme to achieve better business performance and higher ROI.

Traveller friction, defined by Clara CEO Scott Gillespie as far back as 2012, is the wear and tear that frequent travellers experience when they’re on the road. “It is caused by too many nights away from home; too many time zones crossed; too many sleepless nights in a strange bed; too many wake-up calls at 4am to catch a 7am flight,” explains Gillespie. This wear and tear results in lower traveller productivity and worse, resignations, both of which have serious repercussions for business performance.

“Companies increasingly understand that business travel and business performance are intrinsically linked,” says FCM Travel Solutions South Africa GM Euan McNeil. “The less traveller friction experienced by a business traveller before, during and after the trip, the more productive the journey and the greater the return on investment from that trip.”

The industry is learning more about the true costs of travel and that lets progressive travel managers bring this issue forward, backed by data, and puts them in a position of taking a more strategic view of their role. It may be the only way for travel managers to add strategic value to their firm. FCM Travel Solutions plays an important role in tracking and identifying road warriors based on nights away from home using exclusive reporting systems where you can easily identify which of your travellers are out of policy and at risk of burn out.

“Our focus as a TMC in 2018 is to improve our clients’ travel experience by delivering traveller-facing technology like Sam:], our 24-hour travel assistant designed to simplify life for corporate travellers by blending artificial intelligence with the expertise of a real FCM travel consultant,” explains FCM Travel Solutions South Africa GM Euan McNeil.
Artificial intelligence with the introduction of virtual assistants and chatbots is an interesting area of travel technology development which will be further enhanced in 2018. Travel companies have been using AI for some time to improve searches and handle simple customer transactions so that consultants can focus on more complex transactions. In the world of corporate travel, AI has the potential to anticipate traveller needs, personalise the user experience and reduce traveller friction. 
This rapid pace of technological development will continue in 2018 and beyond as the seamless integration of technology and the human touch becomes increasingly vital.

 

2. Managing Data

data management

 

You can’t manage what you don’t measure – that’s the adage that’s been bandied about in the past year and will be a major focus in travel management in 2018.

The term ‘Big Data’ gets a lot of airtime in travel and so it should – the benefits for travel companies, corporates and business travellers are vast.

From improving the customer experience and greater personalisation to strategic analysis of a travel programme and improving operations, used properly big data not only provides a thorough understanding of a travel programme, it can deliver insights to help you define how that programme needs to change to improve business performance.

“The industry has evolved from collecting data and generating a standard range of reports on a corporate’s current travel scenario, to understanding the predictive analytics to shape a travel policy,” explains FCM Travel Solutions South Africa GM Euan McNeil.

Our forecast for 2018 is that corporates will no longer be content with basic reporting alone. Rather, they will want data to identify real exceptions so that concrete changes can be made to their travel programme to achieve business goals. The key for corporates in 2018 will be to convert big data into smart data.

T&E spend is one area of data collection and analysis that companies could be leveraging better. Corporates can gain a holistic view of their T&E spend via one tool like FCM Connect, which delivers programme reporting and data analytics.

It’s a holistic solution, corporates can use the analytics delivered by this tool to simplify future booking processes such as pre-trip approvals, profile management and traveller tracking. What’s more, the expectation from corporates in future will be to allow other areas of the business to share relevant data, including the accounts department for example. The tool provides for this.

 

3. Airlines to change distribution channels

 

airlines to change distribution channelsWe are seeing the introduction of the International Air Transport Association’s New Distribution Capability (NDC) standard. Simply put, it is a mechanism through which airlines can sell and travellers can buy ancillary services and products from airlines, for example, an extra bag, lounge access, seat reservations, etc.

FCM Travel Solutions anticipates that in 2018, major airlines adopting NDC and making available their ancillary products to the end consumer, or via travel agent booking platforms.

“The mainstream introduction of NDC will provide travellers with personalised offers and services they may not have known existed. Travellers will be able to do more transparent comparative shopping between airlines, including for example comparing seat size, price and food offering. They’ll be able to select the most appealing travel option, based on product quality, service level, schedule and price, or whatever it is that they value,” explains Euan McNeil.

As IATA rolls out NDC, airlines are re-evaluating the platforms through which they sell their products and services. Traditionally, through the travel agent channel, this has been through the GDS (Global Distribution System).  GDS systems also support corporate online booking tools.

Traditionally, airlines have viewed the sale of air tickets through GDS platforms as an expensive way of distributing their product. So, in the past two years, airlines like Lufthansa and British Airways have begun to levy a surcharge for any air tickets that are sold through the GDS and GDS-powered platforms like online booking tools. This means that if you book a British Airways flight through a travel agent or your online booking tool you would incur an additional cost of £8 (R150) on each segment, e.g. Johannesburg to London, or London to New York.

Unless… your Travel Management Company has negotiated an exemption agreement with the airline that is levying the surcharge. Flight Centre Travel Group,  recently announced that its customers will now be exempt from the British Airways and Iberia surcharge following the signing of a multi-year agreement – that’s a saving of R600 on a British Airways flight between Johannesburg and London, for example, and a R1200 saving on a British Airways flight between Cape Town and New York.

 

Conclusion

Travel agents, like FCM Travel Solutions, will add real value to the corporate and business traveller by delivering technology that anticipates the needs of business travellers and corporate customer, meeting more strategic needs such as cost-savings, introducing business efficiencies, interpreting travel-related data and ensuring the safety and security of the end traveller, as much as possible, during the business trip.

Travel bots will enable TMCs to combine human service with technology to create a more advanced level of customer service and to cut costs. FCM believe that travel bots, such as Sam:], have been developed to provide an additional interface for travellers, which will complement but never replace the skills and insights of the TMC. The travel expert will always have a key role to play when it comes to managing business travel for large corporations.

In today’s digital world, every company must be a tech company, even those traditionally reliant on call centres and human interactions. With bots, TMCs are able to scale personalised service in a way never managed before. Tasks such as checking flight information, routine booking, changing traveller information and even checking weather in your target destination are perfect for the chatbot. But the human steps in when you miss a flight to your daughter’s wedding. While the bot may help you rebook, it’s the human-to-human sympathy when you call a representative that will give a brand it’s customer service cred.

The corporate travel environment will continue to be challenging, but the right tools are in place to emerge even more successful in 2018.