Corporate travel continues its post-recession recovery. Business leaders’ confidence in the economy is rising, despite uncertainties in the global geopolitical environment, and they’re recognizing the value business travel brings to their organizations. Their willingness to invest in travel is good news for industry payments professionals.
Mobile Technology Continues to Shape Corporate Travel
When it comes to industry spending—and this includes dollars spent by suppliers, travel companies, technology providers, and corporate travel programs on various digital initiatives—the development of mobile capabilities remains a priority. No longer a novelty or a “nice-to-have,” revenue-supporting mobile functionality is a necessity in business travel market.
The Phocuswright study uncovers that mobile functionality/enhancement is the top technical priority for corporate travel programs, ahead of expense management functionality/enhancements, fare tracking and rebooking solutions, rewards or incentive programs, social networking tools, and open booking. This doesn’t come as a surprise, as the flexibility and productivity boost gained through using mobile tools are significant, whether apps are being used for researching, booking, collaborating, or transacting.
The Quest to Deliver a “Customer Experience” Drives Growth
Growth in corporate travel spending is also being influenced by trends outside of the mobile arena that suppliers and travel companies, in particular, are leveraging to make their products and services more attractive to the business travel manager. These trends fall under the umbrella of “promoting a customer experience,” and include:
- Traveler satisfaction: Searching For A Customer Experience in the Payments Industry
- The sharing economy: Why Travel Sharing Services Are Here To Stay.)
- Bleisure travel: The Trends Behind The Rise of Bleisure Travel
Growth Via Payments Tech
And in the payments space, technology will continue to impact organizations’ travel budgets and internal processes for years to come. Investments will be made in solutions that make it easier to manage and pay for travel and realize positive ROIs on travel programs. Electronic payments are being adopted as a convenient and secure way to pay for business travel, and virtual card payments, specifically, have helped corporate travel managers and OTAs streamline their bookings while optimizing cash flow and avoiding FX mark-ups and cross-currency fees. See 3 Reasons Virtual Credit Cards Will Become A Leading Corporate Travel Payment Option in 2016 for deeper insights.
Two recent industry studies reveal the state of the marketplace and predict ongoing, yet moderate, growth through 2017.
- Phocuswright’s S. Corporate Travel: Market Sizing and Trends shows that gross bookings for U.S. managed travel are on the rise and will increase from $110 billion in 2014 to an estimated $120 billion in 2017, a 9% rise over the four-year period.
- Global Business Travel Association Foundation’s GBTA BTI™ Outlook – United States 2015 Q4 estimates S. business travel spending will grow 3.2% in 2016 (reaching $299.9 billion) and 3.5% in 2017 (to reach $310.4 billion). Analysts note that prices, not transaction levels, will likely drive most of the increase.