Corporate travel is making a comeback. Is your airline positioned to take advantage of this growth?
Seats. The front-of-the-plane seats. High-yield seats. Did you know that your airline’s most lucrative customer segment — corporate business travel — is expected to bounce back this year and start filling up more of these seats? Not just in any one region. Growth is forecasted around the world. Albeit slow and steady growth, it will grow.
A recent Business Travel Show survey of 178 corporate travel managers in Europe found that more than one-third plan to increase their travel budgets. In North America, an American Express report notes that steady demand and airline capacity discipline are combining to drive greater revenue oppor- tunities for carriers. Asia/Pacific’s and Latin America’s momentum looks to continue as well. While the growth may differ by region, the business traveler is on the move in 2013.
But how can corporate travel stage a comeback when there are some significant challenges facing corporate travel today? Challenges such as:
- The United States companies awaiting the “fiscal cliff” (the pop-culture term used to describe what took place tax-wise at the end of 2012 when the terms of the U.S. Government’s Budget Control Act of 2011 went into effect).
- In Europe, multi-nationals are having trouble doing business in Europe amid the economic uncertainty across the continent.
- Security concerns in Mexico.
- Companies have invested in technology solutions, such as videoconferencing, that reduces the need for travel.
The good news is, where there are challenges, opportunities arise.
We look to other countries in the world that are flourishing such as China, India, Brazil, Russia and Indonesia whose economies are posting double-digit growth and their companies have dollars to spend on business travel. In fact, research shows that China’s business travel spending outlook has an 11.2 percent compounded annual growth rate for 2011 through 2015, right in front of India at 10.8 percent.
And when business travelers experience roadblocks intra-Europe, they go elsewhere internationally to get business done. Many take advantage of the Visa Waiver Program (VWP), which currently enables nationals of 37 participating countries to travel to the United States for business stays of 90 days or less without obtaining a Visa. And there are other similar programs available in other countries.
Even though companies have invested in technology solutions such as videoconferencing that are supposed to reduce the need for travel, nothing can totally replace the power of face-to-face interaction to close commercial deals. Corporate travel is still the main way to get business done in ways that virtual meetings are not able to provide. However, these are all scratching the surface of corporate travel growth. There are other factors that back up the reports of growing corporate travel.
Airlines Filling Premium Seats
This year, corporate travel is expected to bounce back, and airlines can count on filling up more of their premium seats. According to recent research studies, China’s business travel spending outlook has an 11.2 percent compounded annual growth rate for 2011 through 2015, just in front of India at 10.8 percent.
Airports around the world are improving their infrastructure to make way for the millions of new travelers coming in and out of their terminals, and the majority of upgrades target the corporate business traveler. Whether it is building a brand new airport, adding a new terminal or renovating existing terminals to enable technology upgrades such as:
- Wi-Fi availability,
- Extra power outlets,
- Embracement of mobile capabilities,
- More-efficient check-in procedures at the ticket counter, kiosks and security queues.
All are helping corporate travelers get in and out of the airport and down to business quicker. And when corporate travelers are waiting at the airport, there is plenty of space with lots of light, comfortable chairs, a wide selection of food and drink, and affordable amenities (such as sleeping pods and LED televisions), which make waiting at the airport not so much of an overcrowded and stressful experience, but something they will want to experience again.
Speaking of embracement of mobile capabilities, this advancement makes travel so much easier on the corporate traveler. With the introduction of 3G, 4G and 5G speeds, corporate travelers can manage everything right in the palm of their hands. Typically, shopping travel and handling cancellations/rebookings have been conducted by calling an agent or a few keystrokes on the business traveler’s laptop. Mobile has afforded corporate travelers itinerary management in the palm of their hands so they are able to utilize free mobile apps, such as TripCase® Custom Messaging, that take the stress out of travel and gives travelers confidence by notifying them of important items like gate changes as well as providing terminal information instantly.
So with encouraging data and positive economic trends, you should start to believe that corporate travel is making a comeback and your airline should take steps to realize revenues from this growth. But before we talk about measures, have you taken a recent look at corporate travelers? Today’s corporate travelers are tech-savvy and mobile. They are in control of their travel destiny. They want:
- Seat upgrades,
- To arrive on time,
- To use automated tools that support efficient and fast travel.
TripCase — Changing The Way You Travel
TripCase is a Web and mobile travel management platform that monitors trips and anticipates travelers’ needs. Travelers will receive critical flight alerts, weather delay updates, security notices and other valuable information when they need it most — at no cost!
In a nutshell, corporate travelers want a positive travel experience. They want airlines to reward their loyalty and embrace the use of new technology so when their business meeting ends early, they can get a seat in business class on an earlier flight with just a few taps on their smartphone.
They also want airlines to calculate all of their points and miles instantly to see if they have earned a free bag check. And with new technologies gaining popularity today such as paperless, facial, fingerprint and voice recognition, corporate travelers expect airlines to embrace these methods as well.
Successful airlines that want to quickly take advantage of corporate travel growth should look to providers with proven solutions to retain their current corporate traveler and win new corporate travelers, resulting in new revenue generation.
Corporate Discounts For Loyal Customers
With so many air choices, airlines must compete to win their customers’ business. When there is a loyal following, airlines should grant some “perks” to thank them. But who should get the perks? There are large volumes of fragmented data that can help airlines gain new insights and drive better decision making at all levels and in conjunction with airports and air carriers.
“Airlines should also be aware that a growing number of corporate travel programs have ratcheted up their own data analysis, taking a deeper look about what percentage of traffic they fly on their primary and secondary carriers,” said Michael Brophy, marketing communications manager for GetThere™, a leading corporate booking technology provider. “New analytical technologies have enabled more transparency between travel managers and their airline sales representatives. Carriers that acknowledge this reality and work closely with corporations on programs that meet mutual objectives stand to gain the most in 2013 and beyond.”
Marketing Information Data Tapes (MIDT) can provide this insight as it is raw booking data from global distribution systems as produced by subscribers around the world. This raw data contains all transactions against a PNR with 16 elements such as agency identifications, booking class, origin and destination, and much more to help identify where the most loyal corporate bookers make their purchases. MIDT is a fulsome data source for objective traffic data and can be used for calibrating forecasting models used in network planning or accurate demand forecasts. The best part is that sales and marketing departments can use it to identify new market opportunities for passenger /revenue growth and learn about top agency points of sale and move market share.
If raw data isn’t your thing and you would like a streamlined dashboard application, a tool such as Sabre® AirVision™ Marketing & Planning is a good option. It is a fully integrated commercial-planning solution that offers decision-support within planning and scheduling, pricing, revenue management, revenue integrity, revenue accounting, business intelligence, cargo, and onboard catering and provisioning. Another option is PRISM, which offers commercial planning software that helps airlines realize and maximize the value of the contracts between an airline and its corporate customers. The solutions assess historical traffic patterns and other key points of interest to help manage agreements with corporations that travel across the airline’s network.
While many companies have experimented with videoconferencing as a way to cut travel expenses, in-person meetings are critical in closing business deals. Corporate travel is still the main method of conducting business, which is one of many reasons the business segment for airlines is on the rise.
Reward Your Customers
A free bag check or seat upgrade goes a long way with corporate travelers and the use of industry standard Electronic Miscellaneous Documents (EMD) enables carriers to reward loyal corporate travelers from an accounting standpoint, ancillaries down to the specific passenger, date and flight. Once an airline has acquired meaningful data and a reward strategy in place, it will be able to offer à la carte products and services across each distribution channel, both direct and indirect. The presentation of a consistent rewards message across all distribution channels is key to building corporate customer loyalty and establishing a market presence. Additionally, the airline that is able to reward both the corporate traveler and its travel management company (TMC) will reap the biggest benefits.
Marketing is more important today than ever. What better marketing tool to extend your brand globally, differentiate your brand and efficiently connect with corporate travelers than the TripCase app? TripCase is an award-winning consumer mobile- and Web-based trip management application that can retrieve global travel itineraries via smartphone and computer. Corporate travelers are also able to connect to the GetThere corporate booking tool for in-policy shopping and booking of air, car and hotel. TripCase is booking-path agnostic and enables travelers to manage pre-departure activities and trips from any booking source, such as supporting a carrier’s online check-in and passing the traveler’s information through to carrier check-in while eliminating the need for travelers to manually re-enter data in multiple places. TMCs prefer TripCase because it supports English and non-English messaging to travelers by travel agencies, corporations and travel suppliers that can precisely message travelers at any time during the travel chain. This includes notifying a corporate traveler when an upgrade is available, if there are any special offers for ancillaries on board or any discount offers at the airport 1 to 2 hours before boarding. There is even an option to message travelers post trip with offers for their next trip.
Given the nature of travel, airlines utilizing some or all of these tools will eventually reap the rewards of corporate travel growth when it bounces back. Through the use of tried-and-true tools and market research, airlines can expect to see their lucrative seats at the front of the plane slowly but surely filling back up.