Chilled about flights but costly nights? With flat-priced air fares contrasting with rising hotel rates, it’ll pay to be prepared for an eventful journey this coming year.
BBT asked industry leaders for their predictions in 2016...
(Click here to see if experts' 2015 predictions were correct)
Name one development or trend you think will demand buyers’ attention in 2016.
Geoff Allwright, travel manager UK, Airbus Group
There will be more ‘add-ons’ to air ticket prices, including other carriers adopting something along the lines of Lufthansa’s Distribution Cost Charge (DCC), and traditional airlines charging for onboard food.
Gehan Colliander, head of global travel, The Boston Consulting Group
Business travellers are now shaping the corporate travel programme. We need more than ever to take into consideration the overall user experience and introduce optimal technology that delivers a personalised experience in line with the business needs; hence I believe mobile technology will be the critical buyer-trend in 2016.
Jafles Pacheco, global head of travel, Oerlikon
Lufthansa’s DCC charges and the numerous airlines, including Lufthansa, changing their fare configurations. It’s all becoming a big mess and creating a lot of uncertainty for travel arrangers, which increases the consulting workload for both travel managers and TMCs [travel management companies].
Marc McCabe, business travel lead, Airbnb
Two overlapping trends will be a big focus in 2016. The first is how to support travellers and their normal leisure booking patterns through their corporate travel, and the second is the sharing economy. TMCs know their attachment rates for accommodation are low. It’s time to come up with solutions that fit traveller preferences.
Scott Gillespie, CEO, T Clara
The utility, or perhaps the futility, of negotiating hotel rates. I base this on the general rise in hotel rates, the high workload associated with hotel RFPs [requests for proposal], and the emerging prevalence of hotel-rate shopping tools like Trip Bam. Managers will need to ask themselves if the old process is still worthwhile.
Matthew Pancaldi, global client management director, HRG
Increasingly, the best fares – particularly for short-haul travel – are available through spot buying. Using business intelligence to know when contracted fares make sense versus spot buying, and to ensure ancillary services are consumed appropriately, will require more innovative use of data.
Jo Lloyd, partner, Nina & Pinta
With the current global climate, I think we will see an increased focus on traveller security and duty-of-care. There will be the same risk management whether an employee is travelling to Paris or Caracas because nowhere is really ‘safe’ any more. The visibility required for risk management will drive greater compliance and a lower tolerance for booking off the grid.
Jon West, UK and Ireland managing director, HRS
Virtual credit cards (VCCs) will take over from traditional billback systems. Now that VCCs can be integrated into the booking process, booking, traveller and hotel data can all be reconciled on one statement, with a single VAT invoice.
Simon McLean, executive chairman, Click Travel
Anyone renewing their TMC contract in 2016 needs to ask potential providers explicitly what their strategy is for New Distribution Capability [NDC], because as airlines roll out NDC services they will likely levy Lufthansa-style distribution penalties on bookings made via the GDSs [global distribution systems].
Will corporate travel distribution change significantly in 2016? If so, how?
Geoff Allwright
No, not in one year. This is a dinosaur, and it will take years for significant changes. Removing power from the GDSs will be a good thing, but will take time.
Gehan Colliander
I don’t believe significant change will take place in 2016.
Jafles Pacheco
We are all waiting for the Lufthansa solution for direct-connecting its fare systems to the TMCs. If this really happens in 2016, it will be big.
Scott Gillespie
Travel distribution is like a cockroach: ugly and resistant to change. We will not see any material change in 2016. However, if Lufthansa’s GDS surcharge remains in place through the year, then there will be significant changes in the next few years as other network airlines’ GDS agreements come up for renewal.
Matthew Pancaldi
Changes will inevitably emerge, thanks to NDC. Airlines will start using multiple distribution channels, which will create the potential for channel deals and a growth in menu pricing.
Jo Lloyd
We will continue to see a steady shift towards travel providers exploring alternative distribution channels. Travel providers are watching the market response to Lufthansa’s DCC, but I don’t believe we will see their reaction until the second half of 2016.
Jon West
The last year has seen a steep increase in independent hotels being made available through managed distribution channels, with real-time bookability and availability. This will give TMCs the opportunity to bring the ‘open booking’ fraternity back into compliance, but managers will have to review their sourcing strategy and travel policy to accommodate this choice.
Simon McLean
We expect the influence of NDC to be light earlier in 2016, but the face of airline distribution will change as NDC connections come online.
Will travel buyers increasingly embrace or block sharing economy suppliers in 2016?
Geoff Allwright
Increasingly embrace. The biggest concern for corporates about sharing economy suppliers is insurance, and health and safety. I think some insurance companies will come up with policies to help us get around this issue. I also expect hotels to fight back by sharing rooms with each other. In a city like Bristol, hotels would work together to ensure all their rooms are full every night.
Gehan Colliander
The sharing economy has certainly impacted the hotel and ground transportation industries, with high usage by Millennial [aka Gen Y] travellers. Whether an organisation embraces or blocks such providers will ultimately depend on culture, size, geographic footprint and duty-of-care policy.
Jafles Pacheco
There’s still a lot these suppliers have to do in terms of price guarantees, insurance, security and so on to give travel buyers peace of mind to recommend their services. Just the other day I read about an alleged sexual assault on a sharing economy traveller, so no, for the moment I’m not recommending it.
Marc McCabe
Buyers should and will increasingly embrace it. They can empower themselves more by learning about and taking advantage of the opportunity of this new model. Airbnb has an inventory of over 1.5 million properties globally. Companies that can harness this will save dollars on travel while creating more meaningful travel experiences for their employees.
Scott Gillespie
Like it or not, travel buyers will be forced to embrace the sharing economy. Given that the two leading suppliers, Uber and Airbnb, are rolling out helpful corporate-oriented tools, buyers will have little ability to rebut their travellers’ demands.
Matthew Pancaldi
It depends on where companies are based and where their travellers need to visit. The key for travel buyers will be whether sharing economy companies can meet duty-of-care requirements regarding safety, security, insurance and liability.
Jo Lloyd
I’m not sure buyers will have much choice but to embrace it as many of their travellers are wholeheartedly embracing it for them.
Jon West
Most companies will require real time bookability and availability, plus there are safety and security standards to consider that other accommodation providers, including B&Bs, have to adhere to for the right reasons.
Simon McLean
Travel buyers really have to embrace the sharing economy now because, if they don’t, it will just manifest itself in leakage and expense claims. Expect a cautious approach though, as there is still an air of suspicion among buyers and regulators.
Click here to read the full feature from Amon Cohen on what lies ahead in travel next year.