We’re all aware of how true predictions made during 2016 turned out to be. Every political pundit or economic expert was left with egg on their face after their forecasts amounted to little more than a string of words held together with hope.
But this is different.Click has its own team of experts who have looked into their years of business travel industry experience and knowledge, as opposed to staring into a crystal ball, to pull together a list of travel management predictions for 2017 – all of which are worth bearing in mind when crafting your travel management strategy for the coming year.
1. Increased adoption of NDC by airlines – Chris Vince, Director of Operations
This year will see most industries and organisations tightening their budgets and airlines are no exception, which is why it’s highly likely that more airlines will charge for ancillaries such as seats, food, baggage etc.
We can also expect to see an increasing number of airlines following Lufthansa’s example and adding a surcharge to any tickets booked using GDS as a way of promoting their own direct solutions.
This means travel management companies (TMCs) that rely solely on GDS content will not be able to offer such competitive prices or cost reductions as they might have previously. In turn, this should lead to increased adoption of NDC, with airlines working on developing their own direct connect retail solutions and innovative TMCs developing global aggregation systems that are fit for the future.
2. Increase in rail fares will lead to greater innovation – Mary Joyce, Head of Implementation
Towards the end of last year the Rail Delivery Group revealed that train fares were set to go up by around 2.3% in 2017 – the biggest jump in fares since 2014. This hike in prices will force many organisations to look for more innovative ways to control their train spend. One way in which they could do this effectively is to implement a dynamic travel policy.
A dynamic travel policy really can provide organisations with the best of both worlds in the sense that it affords the person booking a certain amount of choice, but concurrently controls costs, delivering the best value whilst providing a great user experience – which is why Click have pioneered the use of a dynamic policy for some time now.
3. Consolidation for more traditional TMCs – Jill Palmer, Managing Director
2017 is going to be a testing time for TMCs. The business travel industry has seen a real acceleration in growth over the last few years and this is set to continue, with technological innovation and traveller requirements changing faster than ever before.
An increasing number of more traditional TMCs will struggle to keep up with the pace, particularly the adoption of New Distribution Capability (NDC), and so will inevitably look to safeguard themselves.
One route that some TMCs will go down is that of consolidation and mergers, in a last ditch attempt to stay ahead of the market – something that we started to see towards the end of 2016. That said, it’s not a route that Click are looking to explore ourselves. We’ve always been modern in our approach to travel management, meaning that we’re best placed to adapt our offering as the demands of travellers and suppliers change over time.
4. Regional hotel rate increases – Chris Vince, Director of Operations
There has been much discussion about the stability of hotel rates and the general consensus is that while London rates are likely to remain stable, regional rates across the UK are still expected to increase. However this could, of course, vary depending on particular regions, with increases of between 2-6.9% predicted.
Another tip for the year ahead is to keep an eye on budget hotels, as they have recently undergone a makeover and have been forced to shape up. The budget hotel sector is growing rapidly and about 50% of all hotel openings this year will be by budget hotel groups.
5. Brexit will cause a search for greater cost reductions and promote online solutions – Vicki Williams, Director of Customer Solutions
Although Brexit is still a while away and no one knows for certain how things are going to play out, it’s safe to say that the ‘conscious uncoupling’ of the UK and the EU is sure to leave many organisations working to more restricted budgets and in an effort to spot areas in which further savings can be made, it’s highly likely that travel management will be reviewed.
Organisations who have previously used more traditional, ‘offline’ TMCs will perhaps be more receptive to the benefits of implementing an online solution: reduced fees, more content (and therefore more choice for travellers) and time saved through more efficient processes.
For some organisations, a stricter budget will lead to an honest evaluation of their current online booking tool to decide whether it really is producing the results that they require and if not, why? Perhaps they have a low adoption rate? Or the tool itself simply isn’t fit for purpose at a time when the business travel industry is changing so rapidly (i.e. it lacks the right breadth of content aggregation, live availability or a robust future plan for direct connects)?
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