Senior travel buyers and suppliers discussed the major factors influencing managed travel, during ITM’s annual conference at the Celtic Manor resort in Wales.
Airbus travel buyer Geoff Allwright pointed out that air traffic has grown 85 per cent since the 9/11 terror attacks, and that more than 32,000 new aircraft would come into service in the next 20 years. Average load factors, he said, rose from 63 per cent in 1980 to 79 per cent in 2014.
Changes impacting business travel include new start-up carriers in growing emerging markets, further alliances and mergers, investment in infrastructure and product, and more bypassing of the traditional distribution chain.
Claire Marsden, senior supply chain manager at facilities management giant Sodexo, said key factors in the hotel sector include rise in average daily rates (ADR) – the UK saw a 20 per cent rise in the last four years – and the effects of mergers. She cited the example of the combined Marriott/Starwood group now controlling 60 per cent of hotel rooms in New York – which has seen a 32 per cent ADR rise in four years.
Another challenge for travel buyers is the influence of loyalty schemes – Marsden said 43 per cent of ‘millennial’-age travellers are members of a hotel loyalty programme. She predicted a key trend for this year will be more ‘unbundling’ of hotel services, following the airline model of selling ancillaries.
Concur executive vice-president Scott Torrey highlighted Hilton’s latest HHonors advertising campaign, which he said is the largest in its history. Its message urging consumers to book direct – ‘stop clicking about’ – he said, is “not subtle”.
BCD senior vice-president Chris Crowley told delegates that a range of changes are impacting business travel, including demographics – 50 per cent of the workforce will be Millennials by 2020, mobile payment technologies and the formation of “communities based on preferences”. He said these and other factors mean “the traveller’s expense profile will be the most important profile in business travel”.
Follow BBT editor @Travelbizpaul for all the latest updates from ITM 2016.