Corporate travel feeling the pinch of new technology

Jakarta – With a quarter of all corporate travel transactions to be on mobile by 2017, it is clear that this travel segment is being influenced profoundly by new technologies and changing customer behaviour.

At the Travelport APAC Customer & Partner Conference in Bali, a key topic of discussion was the changes going on in the corporate travel segment.

Puneet Mahindroo of Four Seasons Hotels & Resorts, said the most discernible trend was the mixing of corporate and leisure travel by executives. Because it’s become so easy to plan and book leisure travel these days, executives were taking advantage of business trips to extend them to vacation time.

However Tommy Tan, managing director of Arrow Travel, had a different take, “Habits are changing. Technology has allowed for more and better video conferencing facilities. Corporate travelers now travel in and out of a destination faster and don’t spend as much.”

Tougher economic conditions all round have forced companies to knuckle down on costs. Travelers are being forced to adapt their purchasing habits due to significant budget cuts. More negotiations are being done to convert business class tickets to the more “budget friendly” economy section.

According to David Orszaczky of Qantas, availability and visibility of pricing is now crucial to capture this market. Purchasing decisions are made based on the balance of value vs profits.

The growing influence of OTAs was brought up during the panel. Most of the panelists agree that this new trend is significantly changing the space for traditional TMCs.

David Fraser of Flight Centre said, “OTAs allow for convenient consolidation of data for travellers. They facilitate the tracking of the purchasing process and their product offerings have gotten more comprehensive. This makes them very attractive and easy for users.“

While they agreed that most corporate travellers still rely on “human” advice and that TMCs still have a role in the market, the size of the “managed” market has significantly reduced from 90% to only 65% in the past 3 years, they said.

Customers are becoming more informed due to the ease of data gathering. This creates pressure on traditional travel agents to give the most updated information, which may not necessarily be in their capabilities.

Metasearch is another online trend that is having a huge impact on corporate travel.

On the whole, the panel agreed that the “unmanaged” segment of corporate travellers were the ones who use metasearch extensively. This group is highly “price sensitive” as Orszaczky said. Due to budget cuts, price transparency significantly affects corporate decisions.

John Chapman of Jet Asia emphasized that the advent of mobile technology has extensively affected the outreach of metasearch. While people may not purchase through metasearch, they do rely heavily on metasearch in their research/ information-gathering process.

To help traditional travel agents compete effectively with these online trends which are changing corporate travel purchasing landscape, GDS companies should provide travel agents with apps, systems and the software to effectively communicate with suppliers to give the most updated information.

Traditional travel agents need to innovate and have a better aggregation model to stay relevant. To Mahindroo, “the GDS used to be a transactional system, but now, GDS should be used in facilitation of information gathering as well as merchandising.”

“Content is still important, but good technology solutions equally play an important role for suppliers, OTAs and traditional travel agents to serve customers,” said Fraser. Source: WIT