Although the pandemic has likely forever altered the way businesses choose to interact with their employees, business partners and other entities in geographies other than their own, business travel isn’t likely to die out entirely.
“There was a lot of traveling for leisure over the holidays,” he said in an interview with PYMNTS.
Indeed, the passenger throughput released by the U.S. Transportation Security Administration (TSA) found more than 9.2 million passengers traveled by air during the 10-day holiday stretch in 2020. For the first time since the pandemic began, there were three days in a row in which more than 1 million passengers traveled each day.
As Meir predicts, if leisure travel is any signal, business trips could bounce back just as quickly as they sank. Yet the way that businesses book, manage and pay for their trips is likely going to change. More corporates are getting comfortable with video conferencing as a secure alternative to physical travel, but executives have also preserved their preference for in-person interaction. And, with market uncertainty continuing, organizations are likely going to be particularly diligent on how they spend their money on the business trips they do take.
Localizing A Global Approach
Collaborating with a third-party travel management company (TMC) can bring the kinds of efficiencies that corporates seek in an effort to optimize their trips, secure competitive rates and cut costs.
When corporates decide to go-it-alone with their business travel strategies, collaboration with key vendors on a global scale is far from feasible, Meir said, particularly when it comes to seeking and optimizing inventory.
“You don’t have visibility, and you don’t have control,” he said, noting that it is not realistic nor beneficial for a company to establish individual commercial agreements with every travel supplier in every jurisdiction. Beyond the initial booking of travel, such an approach also creates friction when it comes time for payments, as each jurisdiction also has its own VAT requirements, and each supplier may have its own methods of transmitting invoices and payment data, creating a reconciliation and accounting headache.
Beyond the basics of booking and paying for travel, Meir noted that businesses without a modern TMC are also failing to secure opportunities for cost-saving measures. TMCs like TravelPerk can support free changes or cancellations to trips, for example, as well as implement sophisticated analytics technologies to offer predictive insights into potential factors that may require changes to an itinerary.
“Flexibility is extremely important for savings,” he said.
A Closer Look At Costs
With cash flow so tight, businesses need to take an intelligent approach to their travel spend if and when they decide to resume trips. Turning toward third-party solution providers is once again a beneficial strategy, according to Meir.
On the payment side, TMCs can consolidate purchases and spend data onto a single invoice, ensuring that the burden of compliance in areas like VAT is placed on the TMC. At the same time, a unified invoice significantly cuts down on administrative burdens in the accounts payable (AP) department.
But a single solution may not be enough for companies that need to cut costs and gain greater visibility into spend. Meir said that TravelPerk’s strategy of collaborating with third-party solution providers, including expense management FinTechs, is another way to drive value for businesses by ensuring businesses can access best-of-breed solutions and functionality.
The tactic of combining a holistic TMC platform with third-party offerings is likely to grow increasingly valuable for corporates not only in the areas of payments and expense management. According to Meir, as the business travel segment braces for a rebound, organizations will be prioritizing other facets of the landscape, including employee safety and flexibility. As such, there will be plenty of opportunity for technology companies in the business travel space — including TMCs, expense management platforms and more — to implement new services that can integrate with other tools in the travel and entertainment (T&E) toolkit.
Businesses’ needs are growing more complex. From the need to understand behavioral trends in travel destinations like use of public transport, to mitigating the risks of one jurisdiction’s COVID-19 exposure risk, firms are not going to be throwing cash toward business trips without ensuring all needs are met.
Meir said the corporate travel technology industry must brace for not only a return of travel spend, but a surge in more demanding business end-users.
“I would encourage everybody in the industry to get ready for an above-average second half of 2021,” he said. “I would get ready, in a positive way, for lots of volume. Whether you do expense, payments or travel, get ready.”