By Cherry Wang, Country Manager, UK & Ireland, Homelike…
Business travel accommodation is undergoing drastic changes as the sector moves into a new era focused more on travellers’ wellbeing and health. One of the biggest shifts we’re seeing is the significant reduction in budget spend of traditional customers.
The Global Business Travel Association (January 2021) reported that 90% of travel managers and procurement professionals think their companies will spend less on travel in 2021 vs 2019, with an average budget decline of 52%.
Visible change in corporate travel
The way companies are considering how they view business travel and its importance is also changing. Care and attention to the health and safety of employees is becoming a higher priority than the need for face-to-face contact. Key changes include:
Travel policies – More attention into which trips are really necessary for the company and the potential return on investment/risk
Corporate COVID policies – Duty of care is now one of the top elements for TMCs and corporates, with the increased usage of tracking tools and COVID update data
Employee welfare – Employees physical and mental wellbeing has become a top priority, with more autonomy for the travellers to decide whether or not travelling is safe and necessary
What does this mean for businesses, employees and the accommodation sector?
Businesses will need to be increasingly flexible in their approach to staff and work locations, and understand that some workers may be more inclined to travel away from home if it can be more of a ‘workation’, where they can take their family along too. More hospitality operators are ready and willing to cater for this growing demand; with accommodation providers already introducing subscription-based offerings to appeal to remote workers and digital nomads. In the same vein having a ‘home away from home’ is something business travellers are looking for. This is where apartment rentals trump hotels as they are able to provide all the comforts of home including a deskspace, fast internet and kitchenette, making serviced accommodation and the extended stay sector much more in demand.
Business travel is also keeping alive the accommodation sector in core cities, driven by those who moved away from core cities during the pandemic to secondary cities or even rural locations.
The future:
2021 is likely to still be a year filled with travel uncertainty with continued focus on flexibility, digitalisation and safety / duty of care. We will see a number of on-going changes to the corporate accommodation;
- Digitalisation: Utilisation of technology to manage bookings, the guest experience and budgets with sophisticated APIs connected to travel management systems.
- Flexibility: given the pervasive uncertainty around regulations and restrictions bookings will remain flexible, with companies needing to ensure traveller insurance policies cater to the ever-changing needs of their employees
- Blurring of business and leisure travel: As more and more people mix business and leisure travel, we’ll likely see changes in the way businesses are built and operated.
- Demographic of business travellers: the business traveller will change beyond white collar workers to those working in entertainment, construction / infrastructure, medical industries.
Accommodation providers will have to be flexible and nimble in their approach to a new era of business travel and accommodation – putting the needs of customers above growth and profitability. This should in return mean greater choice, flexibility and pricing for corporate bookers and managing travel budgets.
Cherry Wang is the Country Manager for the UK and Ireland at Homelike.
