Corporate travelers will spend differently in 2012

December 20, 2011 | Online Travel

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2012 will call for a radical rethink of how companies manage travel, according to Hogg Robinson Group. As business around the world gets to grips with forecasting for the New Year in the midst of economic uncertainty, it is clear that all companies must embrace change to maximise their travel resources.

Stewart Harvey, Group Commercial Director at HRG, says: “The economic outlook is driving companies to seek new business and this means prioritising markets with the healthiest prospects for growth. As a result organisations will not necessarily spend more or less on travel in 2012, but they will spend differently.

“Clients will be looking for greater control over travel options in traditional markets through smarter travel and travel alternatives for internal meetings, such as video conferencing. Money saved can then be reallocated to allow greater focus on growing and emerging markets where the opportunity for new business is strongest such as China, India and Brazil.

As corporations look to control costs, HRG predicts most travel managers will be under pressure to look more closely at travel and expense authorisation before trips are made.

Stewart Harvey explains: “Businesses are aiming for a firm handle on costs through advanced authorisation, but there’s potential for bottlenecks if systems aren’t in place to facilitate smooth sign-off. Responsibility for authorising travel typically falls to line-managers but, as they too are likely to be travellers, we expect to see increased demand for technologies which extend across desktop and mobile devices. Mobile control is a high priority for our clients, and as such HRG has developed authorisation and reporting tools for smartphones as one way of helping them to be more effective.”

With corporations increasingly focused on accurate forecasts for total trip costs before travel is authorised, HRG expects the travel industry to once again come under pressure to provide greater transparency and standardisation for ancillary fees. Stewart Harvey comments: “When economic conditions are uncertain, the last thing businesses want are surprises, particularly when those surprises cost money. In addition to amplifying the debate around ancillary fees, we’ll also see more corporations using mobile technologies to reinforce travel policy among travellers.”

HRG believes demand for business travel will remain healthy in 2012, but expects suppliers to stay conservative in their outlook, controlling inventory and capacity in an endeavour to minimise exposure to risk. Stewart Harvey says: “There have been tremendous swings in travel demand over the last few years. The current economic situation makes it very difficult for industry suppliers to make firm predictions, so we fully expect them to err on the side of caution.”

Harvey explains: “As demand increases and capacity decreases, there are two primary challenges for clients - availability and access to the best price. Our value is realised when we work with clients to help them understand how and when they are travelling, and to identify opportunities through which they can make savings by changing existing travel habits.”