Key takeaways from Business Travel Trends and Forecasts

BTN Group’s first Business Travel Trends and Forecasts conference in Asia Pacific, which took place in Singapore at Swissotel The Stamford on 17 July 2023, attracted 85 corporate travel managers and procurement professionals during the one-day conference.

Themed “Business Travel Trends & Forecasts”, the event covered topics such as business travel forecasts; the evolution of airline distribution and its impact to APAC; how to reset travel buyers’ data management strategy; overcoming hurdles to business travel innovation; and maximising travel buyers’ relationships with their travel management companies (TMCs).

M&C Asia highlights key takeaway points of discussion: 

Data outlook vs the reality on the ground

IATA has forecasted an upward recovery trend for APAC in 2024 where travel is expected to even exceed 2019 by 3%, and hotel RevPAR recovery is largely due to demand-driven factors. However, the short-term growth outlook for APAC will be muted.

Inflation has peaked in APAC and other regions but it will remain elevated this year, said Michal Nhu, senior economist, head of global hotels forecasting, CBRE. “We are still forecasting technical recession in the first quarter of 2024 and the second quarter of 2024 (in the US). CBRE expects interest rates to peak by this year end after another round of Fed interest rate hikes in Q3 2023.”

Nhu added that whilst RevPAR exceeded 2019 level in nine out of 15 key markets in Q2 2023, occupancy recovery is still lagging and there will be a slower hotel supply growth as compared to 10 years ago.

Varun Mehra, senior consultant, CWT Solutions Group, displayed a range of airline average segment prices (ASP) across the region, highlighting the steep increase in airfares for intercontinental regions. In China, this was US$1,958 in 2023 compared to US$1,083 in 2019. In Singapore, it was US$2,209 and US$1,700 in the same period respectively.

With the changing workforce, Mehra recommended that TMCs should “right-size their programme” and relook at their platform of suppliers and reduce leakage in compliance.

Constant battle between price and sustainability

Corporate travel managers grapple with the dilemma of choosing cheaper airlines for cost savings, which may involve non-direct routes and increased carbon emissions. Buyers also acknowledged that it was not easy to balance this even with the emergence of sustainable fuel.

Besides sharing transport through apps that help employees track if they are in the same location, another suggestion was to create a pre-approval booking platform where employees are directed to a page on their online booking tool to see how many trees would be destroyed if they flew a certain route.

Such measurable and education techniques are effective, said, Brenda Quek, Asia-Pacific Travel, Meetings and Events Program and Engagement leader, EY.

Airline NDCs gain traction, but integration still a challenge

NDCs (New Distribution Capability) from airlines are gaining traction, with 90% of the audience agreeing that consuming NDC-piped content is a necessity for TMCs. Currently, out of the 350 carriers in the market, some 80 carriers have NDC content. The challenge lies in effectively integrating fragmented information and enhancing platforms to utilise such content optimally.

Emphasising duty of care

Ensuring greater duty of care and measuring carbon footprints effectively become essential considerations for businesses in today's competitive travel landscape. “There used to be a clear distinction between leisure and business, but now, even with higher prices, (leisure) people are still travelling and now you are competing with leisure travel,” said Mehra.

Rising focus on employee wellbeing

The focus of TMC programs is shifting from cost reduction and compliance to prioritising employee wellbeing, which should also become a component of the Request for Proposal.

Behavioural management is crucial to understand how to retain talent and in turn, drive the most savings for employees who travel a lot. This could come in the form of a report and being able to see “a dashboard” to notify travellers who are burning out.