Corporate Travel after Crisis: A Reset for 2022

Current corporate travel landscape in China

Recent research has shown that the passenger volume for domestic air travel in China has now recovered to approximately 95% pre-COVID levels; land transportation such as rail and car hires, as well as accommodation namely hotel occupancy have recovered fully or even exceeded pre-COVID levels, which is a clear indication of strong traveller confidence in domestic travel.

While there has been a slow and steady rise of confidence in international travel, the volume of international flights is currently 5% pre-COVID level due to regulations and restrictions. There was a significant fare price drop in 2020 but it has picked up quickly since then. Domestic air fares are only around 15% cheaper than pre-COVID levels; the land transportation and hotel prices have also fully recovered. International flight fares, though, are still multiple times higher than pre-COVID levels due to border restrictions and limited supply.

People have returned to work in office since May 2020. Even when there were several waves of infections thereafter, they were always contained successfully within one month, with only designated areas lock-down instead of country-wide. On the travelling front, all travellers now have to show their health QR code when travelling domestically. The health code has 3 colour status – green, yellow and red; and they correspond to your travel arrival record from low, medium and high-risk areas respectively. Areas with new local infections are usually defined as medium and high-risk areas. As long as you are not exposed or do not pass by those areas, and you come from a low-risk city, your code remains green. Otherwise you will have to obtain your PCR negative record ideally within 7 days to reduce your chance of quarantine. China has had a significant success in their vaccination programme in Asia. As of July 2021, it has achieved its target of vaccinating over 40% of the Chinese population and more cities have also started to ask travellers to present their vaccination records before entry.

Mainland China has also built its first travel bubble with China Macau earlier this year, and the Chinese authorities are actively looking at establishing more travel bubbles in the region. Potential travel bubbles include Mainland China-Hong Kong (part of the reason because of the growth and focus on development of Greater Bay Area) or Mainland China-Singapore (where the vaccination programme is also well advanced).

Additionally, COVID-19 has driven further companies’ focus on sustainability, more and more companies have expressed their willingness to enroll into a sustainability programme with their travel partners. Carbon offsetting is a common initiative that most companies will choose to start with, and they are also moving very quickly beyond that as well. 

New realities and customer behaviours

There are differing opinions about whether or not corporate travel will rebound fully after a year of zoom calls and virtual conferences.

In our recent survey with our clients across a broad range of industries in China, 70% indicated that while video conferencing suffices for most of their work; on the flip side, 60% of respondents did list exemptions where virtual conferences does not work well, such as extended training, large conferences and sales pitch. We are also seeing more companies adopting a hybrid model where key participants in the same city join the venue physically in person while participants from other cities or region join virtually.

For domestic travel, we have seen an uptake in driving or rail bookings to nearby cities where flying is not the only option (there is a view that land transportation is safer than flights, as airports still have inbound cases from time to time).

COVID-19 has caused many companies to tighten their belts; so corporate travel policy has also evolved significantly throughout the pandemic. For example, there are now more layers of approval procedures or stricter criteria by allowing travel for external or essential meetings only. Travellers are also in need of more pre-trip planning and advice before each trip to understand the quarantine and entry policies of their destination. Travel managers and arrangers have increased their focus on safety and risk management (also commonly known as duty of care). 82% of the respondents indicated traveller wellbeing and safety as the greatest concern: they need to have a crystal-clear view oversight in the hygiene and safety protocols of airlines, accommodation providers and land operators.

Post-pandemic survival kit

With the evolved corporate travel landscape and new norms of the post pandemic travel requirements as backdrop, there are three core pillars of transformation that will contribute towards a travel management company (TMC)’s success in China beyond the pandemic. They are technology, service models, and integrative payment solutions.

Technology

China has been at the forefront of digitalisation even before COVID-19, thanks to the boost of e-commerce over the past decade in China. The pandemic has accelerated this trend further in many sectors including corporate travel, as more customers begin to look for agile and flexible tech solutions. Examples include one-stop and seamless experiences across multi-access devices; enhanced user experience on mobile platform; always available assistance, be it via chat robot or instant live interaction with a travel consultant whenever there is a complex issue that travellers are unable to sort out by self-service on an online booking tools (OBT) and want a quick shift from online to offline process; AI powered reporting and calculation of savings so that travel managers can access and consolidate in an efficient manner, any ad-hoc reports they need.

Besides cost saving, more attention has been paid to traveller safety and wellbeing as mentioned earlier; so travel managers need a risk management dashboard to be able to track all travellers and their routes, and send messages by one click if needed. Sustainability modules that can link corporate travel data to carbon emission would also be critical to help companies fulfill their corporate social responsibility (CSR) duty. Last but not least, a TMC’s system needs to remain as open as possible to allow for integration with clients’ expense management systems, office automation (OA) and HR systems etc. TMCs need to become a part of the client’s ecosystem in helping them to further drive their overall digitalisation progress.

Service models

While tech innovation helps to free up travel consultants’ capacity on arranging simple and point-to-point travel, we also see that travel consultants are now more needed than ever for complex and multi-segment travel planning. A dedicated service model will have more longevity in the post-COVID era compared to the traditional call centre model as travellers may not want to repeat the same story again and again or reach out to multiple teams for air and land combined bookings (especially if it is a complex itinerary). Instead they want a single contact point who knows them well – an experienced and reliable travel consultant to keep them feel safe throughout their travel, especially when borders reopen and travellers restart their business travel in the complex post-COVID world. Therefore, a service team’s ownership, productivity and sense of belonging is a crucial component in building trust with travellers. Of course, there are different TMC players in the market –  some have dedicated or personalised service models while others focus on call centre model, but we see a trend that those with call center model are now enhancing their VIP service offering to specifically take care of travellers with complex itineraries.

Integrative payment solutions

On top of tech innovation and service model, a financially strong and secure position with operational stability is also going to contribute to the TMC’s success in a reset world. We have unfortunately seen the bankruptcy of several travel agencies over this pandemic and corporates now have an added concern in losing their TMC partners overnight. This is where we have to be very clear about a TMC’s core business proposition: provision of service and not banking. Therefore, payment solutions like UATP, pre-paid land products or omni-channel online payment portals will need to be cleverly incorporated to strike the balance here. These solutions can help to take away the pressure of working capital from TMCs while adding value to corporate travel programmes by streamlining internal processes, increasing transparency as well as providing enhanced and real-time data instead of waiting for monthly statements for reconciliation.