Corporate travel is a trip for work purposes and is different from leisure travel or daily commuting. Despite growing digital technology facilitating online meetings, the importance of one to one meetings, trade fairs, conferences, and events holds a special place in international business.
Global Corporate Travel Procurement Scenario
Owing to the technological advancements and an oscillating global economy, the corporate travel industry has been evolving tremendously year on year. These factors have majorly impacted the travel policies of all small and large businesses. China, France, Italy, the U.S, and the U.K account for the major markets that are sources of procurementfor corporate travel. The top five among them are China, Germany, India, U.K and the U.S.
Let us now analyze the three main constituents for corporate travel and how they have been affecting the corporate procurement market.
The pricing factors for airfares include segmentation based on various fare class codes like F, A, P for First Class and C, J, D for the Business Class. The fuel price is also one of the primary drivers for the increased cost of an airline ticket. The global rise in crude oil prices increases surcharges on business air travelers.
Currently, the hotel market for corporate travel is controlled by the suppliers, owing to a favorable supply-demand dynamics for them. A discounted rate provided by partnering with a travel agency has become a solution to the dynamic pricing. It has also helped the travel companies to enjoy more savings on bookings.
The corporate travel industry has readily accepted shared services like Lyft and Uber etc. in their travel policies. However, the car rentals have not gone obsolete yet. The market trends suggest that car rentals still continue to dominate the ground transportation mode especially in the U.S. and European economies.
Factors Influencing the Global Corporate Travel Procurement Market
Here are some of the factors that are affecting the procurement of the large business corporate travel market, both positively and negatively:
Increasing Use of Travel Technologies
The increasing use of Travel Management Systems in the companies has made it efficient to manage their bookings as compared to traditional booking. The advent of online booking tools, travel apps, digital wallets, and wearable technology etc. have enabled the corporate travel market to reach new travelers.
The Concept of Digital Interactions
Technology has also hampered the growth of the business travel market by introducing virtual and hybrid digital technology meetings. The concept of online meetings, seminars, and conferences, instead of traveling have negatively impacted the corporate travel market.
Uncertain Economic Conditions Globally
Although the crude oil prices have fallen, factors such as the increasing value of the U.S.D has encouraged high travel costs and rising market volatility. This has further led organizations to take cost-cutting measures.
The Growth of The Sharing Economy
The business disruption initiated by shared economy such as Airbnb and Uber have spread worldwide. Their affordable, efficient and convenient services have helped boost the corporate travel procurement market even more. Sharing economies have mainly helped the travel market to reduce overall costs.
The corporate travel industry is all about exploring ways to ensure a highly organized, financially viable, safe, time efficient and productive business travel. Corporate travel companies are actively looking for innovative solutions through comprehensive market research and trends analysis into the current economy to offer a more efficient and comfortable travel experience for their employees.