Five corporate travel trends to play out in 2023
There may have been a minor softening of demand for corporate travel in the final quarter of 2022, but it wasn’t enough to put a dint in the industry’s pace of recovery. With all areas of the industry blasting into the new year full throttle, 2023 is shaping up to be an interesting year for travellers and suppliers.
According to the FCM Consulting Global Quarterly Trend Report Q4-2022, North America will still be leading the charge on airline capacity recovery in the first quarter of 2023, sitting at 101% of 2019 volume. Airfares are also staying strong with global international business class fares in 2022 on average 15% more than 2019. Discount economy class fares were on average 12% higher in 2022 than they were in 2019.
What else do travel buyers need to consider when planning travel programs this year? Based on the latest FCM Consulting Global Report Q4-2022, here’s five of the key trends expected to take off during the next 12 months.
Enhancements for the traveller experience
After a year of recovery, getting things back in order and up and running, travel industry suppliers are finally coming up for air. Suppliers will be breathing new life into the traveller experience in 2023 - looking at ways to make travel options more personal and tailored. The ‘traveller-first’ mentality will filtrate through the corporate travel experience from new distribution channel (NDC) content from airlines to more personalised hotel experiences driven by smart technology and traveller-centric travel programs designed to keep travellers happy, healthy and comfortable.
More energy spent on managing travel budgets
With forecasts indicating airfare and hotel costs will continue to rise, corporates need to make sure they’re spending their money wisely. This means working with your TMC to find opportunities to save or at least contain costs. Corporates will be encouraged to look at their buying behaviour, processes and management of everything from air and hotel contracts to air credit management and out-of-policy expenses. A good starting point is to check whether you’re buying best fare or rate of the day and if your travellers need to be travelling during off-peak time rather than high-peak periods when travel costs more.
Changes for air and hotel contracts
Airlines and hotels have been forced to reassess their contracting arrangements following the pandemic. As a result, the contracting environment has well and truly shifted. Airline contracts have changed, so make sure you’re reading the fine print with regards to items such as:
- Spend thresholds
- NDC requirements
- Non-performance penalties
- Change requests.
In the hotel space, FCM Consulting has seen a 45% increase in the use of Non-Last Room Availability (NRLA rates). With demand for accommodation on the up and hotel occupancy in most countries (except Mainland China) sitting at or above 80%, It’s important to keep an eye on your contracts. Otherwise you may end up paying rates up to $30 more, depending on the hotel and city.
Corporates pick up the pace on sustainability
If you haven’t already started talking about how to include more sustainable travel options in your travel program, now is the time! FCM Consulting recommends aligning your emissions tracking to your business targets and setting goals that go beyond carbon offsetting. Think of your travel program from end-to-end including the actual traveller experience to see where your people can make even the smallest of changes to make a positive difference to your green count. Examples include hiring more electric vehicles, using hotels or airlines that offer locally sourced produce and sourcing from suppliers with strong corporate social responsibility (CSR) or environmental social governance (ESG) values.
Events are back in town
Planning for events in 2023 and 2024 is well and truly underway. Trends in the event space will see corporates host more sustainable events, utilise integrated technology to engage and connect guests from the sign up to the after party. Think on-demand, mobile, omni-channel communication and content to cater for in-person and virtual guests as well as a strong emphasis on diversity, inclusion and equality.
“After the chaos of the pandemic, a new era of uninterrupted and more personal travel is ahead for corporate travellers,” FCM Consulting APAC General Manager Felicity Burke said. “Suppliers now have the space and energy to focus on the traveller experience again and I think that will present some exciting and different opportunities for business travellers.”
