When TMR asked executives at several large corporate agencies about their outlook for next year, they said their crystal balls include steady if not strong increases in travel overall, an enhanced focus on duty of care, investments in mobile and big data, and a growing meeting sector.
Here are the trends they spoke about:
1. Steady growth, though perhaps slower than in the past.
At Travel and Transport, a mega-agency in Omaha, it’s “steady as she goes,” says CEO Kevin O’Malley. While acknowledging that there is a bit of “general nervousness” among clients, he sees steady growth from the agency’s corporate customer base, though perhaps less than in recent years.
Mike Cameron, CEO of Christopherson Business Travel in Salt Lake City, said the agency added 100 new corporate clients in 2015, adding, “We are fortunate that many of our clients are located in states with strong economies; for example, Utah and Colorado were both recently ranked as two of the best five states to do business in by both Forbes and CNBC. This provides some nice tail wind for us.”
International travel continues to expand, said Steve Cline, president and COO of Adelman Travel in Milwaukee, despite events overseas, “because many corporations are expanding their businesses abroad.” In response, Adelman is rewriting travel policies to be more international travel-centric. Also, a global account management staff has been incorporated into the organization to assist international companies to consolidate their travel programs around the world.
2. Prices continue to rise.
With consolidation the buzzword among global suppliers, hotel rates and airfares are expected to rise as well, Cline said. However, Adelman has previously seen travel decline during presidential election years, which sometimes has generated discounts from suppliers to encourage travel.
Kevin Hamilton, EVP of sales for Conlin Travel in East Lansing, MI, said the agency sees a positive 2016 for the world economy, bringing an increase in air fares of a few percentage points, assuming stable oil prices. Hotels will see a 4%-6% rise in average global hotel rates. But competition will mean just a moderate increase in car rental rates.
3. Focus on duty of care.
Risk management “is a big emphasis for corporations,” Cline said, and corporate customers are incorporating new policies and technology to help monitor employees’ location in case of an emergency, especially when they travel abroad. Adelman sells its clients a tool called Concur Risk Messaging that identifies where travelers are around the world and allows the company to send text messages directly to travelers regarding travel alerts and alternative travel arrangements if needed.
4. Investing in technology.
Mobile and big data are still where the most significant investments will be in 2016, says O’Malley. Travel and Transport has a proprietary mobile platform and is “investing heavily in ways we can use it to make travelers’ lives easier and to make applications more appealing to use.” The agency also is reacting to “frustration” among clients who complain about having to go to disparate sources to aggregate data. “They are looking for help so they can discern patterns as well as do predictive analysis,” he noted.
Cameron said his agency built and released two new technologies in 2015: Travel Approval (obtains and tracks approvals from booking to traveler to manager); and Hotel Attachment (offers travelers options in compliance with travel policy.) There is more in the works in the areas of: hotel spend management, travel manager actionable intelligence and traveler engagement.
Hamilton said Conlin Travel is aiming for “a sharper focus on increasing value to partners and becoming more traveler-centric,” including “bringing in new technologies in mobile, sms messaging, tracking, and duty of care.”
5. Attending to meetings.
Meetings are a growing sector for Travel and Transport, O’Malley said, and so the agency is better aligning its meeting procurement with its transient travel sourcing in an effort to seek efficiencies.
Adelman Travel also is focusing more on meetings and incentives, and hoping to boost its group business through internal growth as well as new partnerships and acquisitions, Cline said. Adelman has added expertise in this area to broaden the variety of meeting services and incentive trips it offers corporate accounts.
Said Cameron: “Our acquisition of All Seasons Travel two years ago included a first class meetings and incentives team. Our sales in this area are growing rapidly because of that.”
At Conlin, where 15% of business is groups, meeting, and incentives, Hamilton also sees volume rising at a steady pace.
6. New products for the new year.
Travel management companies are competing to introduce new and better products. For instance, Adelman recently launched a co-branded corporate credit card in partnership with US Bank that is integrated into the agency’s back office and reporting tool. It also has integrated with Concur Expense’s automated expense-reporting system. Now the agency can look at booked data vs. expensed data to identify areas where travelers did not follow the company’s travel policy, make recommendations to corporate customers on policy changes, and manage the complete travel and entertainment cycle for clients. Cline said that having travel data, expense data, and data charged under the corporate card system within one reporting tool “is a key differentiator for us.”
7. Recruitment efforts come to the fore.
Recruitment will be an issue for all agencies next year, as the search for talent gets more and more difficult. Conlin is taking charge of its own destiny as a program designed to recruit and hire recent four-year college graduates, which began testing last year, ramps up.