1、v vvManaging Uncertainty in Business TravelAn American Express Global Business Travel CompanyIntroductionAn American Express Global Business Travel CompanyRising costs,supply chain issues,staff shortages and global economic instability are heavily impacting the industry.As a result,uncertainty has i

2、ncreased amongst travel buyers,arrangers and travelers themselves.So how can the entire travel ecosystem manage the rising levels of unpredictability being faced globally?Business travel undoubtedly remains a driver of growth.In a recent survey,American Express Global Business Travel found that 85%o

3、f US decision-makers surveyed said that business travel leads to higher profit and revenue.Alongside this is a strong desire from business travelers to take to the road once more,with 67%wishing to travel for business moderately to extensively.i In times of uncertainty,there is often a desire to ret

4、reat inwards and make cuts.However,looking at the above indicators,cutting back on travel budgets results in a more disconnected workforce,a lack of loyalty from customers,and reduced opportunities to connect with potential prospects.Even in these uncertain times business leaders and travelers alike

5、 agree corporate travel is here to stay.New challenges are giving rise to new trends and ways of working.Using the data and research available,industry experts are seizing the opportunities created through uncertainty and re-shaping business travel.Old ideas are being revisited and new ways of worki

6、ng explored.Effective management of uncertainty can make or break a travel program.As we brace ourselves for a chapter of volatility,travel managers and the wider industry need to re-evaluate their positions and adopt new strategies of agility and flexibility.An American Express Global Business Trav

7、el CompanyRising Energy Prices1According to a survey by the US Travel Association,84%of business travelers expect to attend conferences,conventions or trade shows in the next six months.ii Confidence levels are up,and people have a renewed desire to travel and reconnect face-to-face.So,what are the

8、factors that are causing new challenges within the business travel industry,and what does this mean for travel demands across corporations?Five Major Challenges Facing the Business Travel IndustryRising fuel prices are already having a major impact on recovery for the airline sector.According to a r

9、eport by McKinsey,fuel costs are roughly 120%more,on average,than they were in 2021.iii The Unfiltered State of the Travel IndustryThe Unfiltered State of the Travel IndustryIn the past,the increase in fuel costs has been passed on to travelers,which is likely to happen again.Although this has impac

10、ted demand negatively to corporate travel previously,in the words of Matthew Parsons,Corporate Travel Editor at Skift,“pent-up demand seems to be trumping any worries that businesses might have over rising travel costs.”ivWith few companies placing price caps on travel,costs are set to rise,even if

11、levels of travel turn out to have plateaued for the time being.Looking beyond the skies,fuel prices are beginning to change travel patterns on the ground.There is an increased interest and consideration for electric vehicles.Hertz recently purchased 100,000 Teslas,making it the largest electric vehi

12、cle rental fleet in North America.These new demands and interests could be tied to the intense pressure corporate organizations are now under to manage their carbon footprints,but the interest equally correlates with increasingly high fuel prices.The uncertainty of rising prices cannot be disputed;i

13、ndications are that travel expenditure is increasing,leaving travel managers faced with the challenge of permitting or restricting travel.The focus is now on the return on travel investment.An American Express Global Business Travel CompanySupply Chain Challenges and Labor Shortages2It is no secret

14、that the entire business travel eco-system is suffering from a shortage of trained,skilled staff right now.From baggage handlers at airports,to travel consultants at Travel Management Companies(TMCs),almost every stage of the travel journey has been impacted.As the graph below shows,airport employme

15、nt in the US is still trailing pre-pandemic levels.vi Many skilled staff have left the travel industry for good.Over 62 million jobs were lost in the global travel and tourism market in 2020.This is an overall decrease of 18.5%.vii Replacing talent on that scale,in such tight timeframes,has proved o

16、verwhelming for the industry as a whole.While the industry searches for,recruits and trains new talent,key areas will continue to be impacted.One of the most visible of these is the airline industry.From January to July 2022,a total of 128,934 US flights were canceled,which is an 11%increase compare

17、d to the same time in 2019.viii But cancellations are not the full story.When you take into consideration an additional nearly 1 million delayed flights,it is easy to see the severity of the supply shortage on business travel.The good news is that these cancellations and delays are finally starting

18、to improve according to the Federal Aviation Administration(FAA).Acting FAA Administrator Billy Nolen claimed,“We can see overall delays are down The airlines are working to right size their network.”ix In the meantime,business travelers battle with ongoing uncertainty around the punctuality,and eve

19、n viability,of their flights.Internation air traffic0-10-20-30-40-50-60-70-80-90-100Apr 2020US international air traffic and airport employment still trail their pre-pandemic levelsPercent change in US intenational air travel and airport employment from 2019Apr Apr Jan 2021Jan 2022JulJulOctOct10%An

20、American Express Global Business Travel CompanyThe US GDP shrank by 0.9%from April June 2022 and is the second quarter of economic shrinkage.x Things are equally as unsteady in the UK,which recorded negative economic growth for Q2 and Q3 of 2022.xi Over in France,growth is now expected to slow from

21、an estimated 2.5%this year to 1%in 2023.xii It is a similar story in Germany whose economic recovery has been hampered by an embargo on Russian oil.The German economy is projected to grow by 1.9%in 2022 and 1.7%in 2023.xiii Historically,inflation,rising global commodity prices and economic slowdown

22、go hand in hand.But it is also worth noting that these periods,often last on average 1.25 years.xiv Businesses are already preparing for the economic slowdown and are not sitting around waiting for official announcements.They are busy building resilient operations now,that will thrive in the good ti

23、mes and the bad.For business travel,economic uncertainty often results in short-term travel bans,as companies try to cost cut and manage cash flow to meet budgets.However,with pent-up demand still not being met,the signs are that this time around reactions could be different.More than three-quarters

24、 of the respondents to the GBTA survey said they expect to travel more for work in 2023 and 85%of business travelers reported they need to travel to meet their business goals.84%of corporate finance executives were confident their travel spending will increase next year compared with 2022.xvThe glob

25、al economic slowdown will naturally have a knock-on effect in the business travel industry.Predicting travel costs is as challenging as ever because the global market is extraordinarily volatile.Financial decisions will differ from business to business,country to country,as unique sets of circumstan

26、ces are navigated.Geopolitical instability has long been a major cause of uncertainty when managing travel.The ripple effect of geopolitical disruption,and the uncertainty that comes along with it,should not be underestimated.Despite other global conflicts existing prior to the current European conf

27、lict,Global Rescue has recently reported that 60%of travelers expressed some level of concern about international travel.xvi This uncertainty and concern is reflected in an increase in the uptake of security evacuation protection,as travelers attempt to mitigate risk.Alongside this,there are practic

28、al issues that geopolitical instability can cause,such as flights being rerouted due to airspace closures,or elevated traffic and security measures in neighboring countries due to high numbers of refugees.All of these ripple effect issues can cause both unpredictability for travelers and potentially

29、 result in longer,more expensive journeys.Understanding the impacted regions and where disruption is likely to occur,outside of the directly impacted conflict zones,can help manage uncertainty and mitigate the risk of delays and cancellations.Economic Slowdown3Geopolitical4An American Express Global

30、 Business Travel CompanyTraveler Sentiment5The increased uncertainty generated by the above issues,and the service challenges across the whole trip experience,are filtering through into traveler sentiment,presenting companies who expect travel as part of their“business as usual”operations with a dil

31、emma.“Even the most seasoned travelers are experiencing a period of adjustment,as the world around them continues to shift,”explains Paul Tilstone,Managing Partner at FESTIVE ROAD.“We simply cannot assume that someone who was once happy to travel frequently on business,will feel the same way.”Theres

32、 no question that well-being is at the top of the C-suite agenda right now.The Great Resignation taught the business community that employees are no longer willing to tolerate jobs that leave them in a constant state of stress and fatigue.xvii With travel disruption on the rise,organizational leader

33、s need to check in with their road warriors.Business trips are starting to overwhelm employees,with many complaining they are carrying the burden for those colleagues unwilling to travel.With so much still up in the air,it is natural that travelers will feel uncertain about how,why and where to trav

34、el in the short to mid-term.Travel arrangers and managers play an essential role,alongside business travel industry partners,to support this transition and provide what support and confidence they can.Despite clear challenges for the industry over the coming months,one thing is clear business travel

35、 has been increasing and demand is real.What is needed now are ways to overcome these obstacles and manage the uncertainty being felt throughout the industry,to clear a pathway for the true value of business travel to be recognized and invested in.An American Express Global Business Travel CompanyEv

36、en though there are some big challenges facing the business travel industry,actions and strategies exist to mitigate risk and maximize opportunities.Here are three practical,proactive ways to take control and turn uncertainty into opportunity.Data helps steer business decisions every step of the way

37、 and business travel is no exception.The first step towards tackling the rising costs and unpredictability of travel is to gain insight.Next Steps:Process historical data right up to the present moment to show how individuals,teams,and departments spending patterns on airfare,accommodation,car renta

38、l and rail are evolving.Connect your travel and expense data on one platform so that data can flow across reporting systems.Check real-time travel and expense data to review if business travel choices are economical.Use this data to redefine travel policy parameters to highlight your preferred suppl

39、iers,routes,and destinations.Implement data-backed advance purchase policies on your travel booking tool to allow purchase flexibility as the cost of travel continues to be unpredictable.Travel arrangers need access to information to predict and influence future trends rather than just recording wha

40、t happened in the past.And access to the right data,in real time,will enable them to adjust travel policy and spending to help their business perform better.Once the state of play has been determined by following the data,the next step is to be more strategic with corporate travel decisions.Setting

41、a new business travel strategy amidst uncertainty and challenging times feels like a daunting prospect.But with data underpinning the direction,a new strategy can be a chance to do things differently.Strategies are not permanent;they adapt and evolve.Adopting a flexible,adaptable approach can manage

42、 uncertainty in the interim,while keeping an eye focused on the future.Next Steps:Revisit your preferred hotels and aim to consolidate volume where possible.Think about leveraging discounted rates already negotiated by your travel management companythis is particularly useful in areas where your vol

43、ume is lowest.Consider supplier share-shift as an opportunity for your company to direct booking towards an alternative supplier,which is typically driven by cost savings and,in some cases,by companies that have negotiated agreements with a supplier.Increase your trip planning and book as early as p

44、ossible to help ensure lower cost and availability.Outline what purposeful travel is for your company.Identify different types of travel across your organization and create a scoring method to determine what types of meetings need to be in person.Learn more about scoring purposeful travel here.Estab

45、lish a way to measure the true ROI of each business trip.When reviewing revenue generated from business trips be sure to consider other factors such as the impact of maintaining professional relationships and travel as an internal motivational tool.Minimizing the Negatives and Maximizing the Positiv

46、esFollow the dataGet StrategicAn American Express Global Business Travel CompanySetting a strategy,even an interim one,will impact the direction of policies and procedures.Travel policies can often be legacy documents that once worked but may now no longer be reflective of the travel landscape or bu

47、siness objectives.Next Steps:Conduct feedback to understand traveler pain points and frustrations.The goal is to learn about their preferences and consider those preferences in relation to future decisions about preferred channels or policy restrictions.Assess policy against the challenges presented

48、.Move away from static hotel rate caps in your travel policies,fixed per-night rates by city,town,or country.As volatility continues to dominate the market,adopt dynamic spend caps that align with price changes from the waves of high and low demand.Utilize travel booking software for built-in policy

49、 guidance.Visual flags in the booking tool alert both travelers and travel arrangers when a booking is above the cost limit for that specific traveler Increase your travel compliance by educating your travelers on any changes made and rewarding them for the adoption of your new tools and policies.Re

50、-assess travel policyInnovative technology can help provide additional savings opportunities.When you transition to a managed travel program you should expect a dedication to innovation around traveler experience,adaptable technology,and data access.Your travel arrangers need dynamic,up-to-date tech

51、nology to make important changes on the fly to reflect current external and internal factors.Choose a partnership that allows travelers to easily modify bookings and travel arrangers to instantly update travel policy across every location.Take advantage of the right technologies An American Express

52、Global Business Travel CompanyEmbracing the future New challenges can bring opportunity,not just within organizations,but in the wider business travel industry.Some of travels brightest minds are seizing this opportunity and are at the forefront of exciting new trends,which will shape the future of

53、business travel.Expect more Artificial intelligence(AI)and BotsAI is everywhere in the news lately,and contrary to what many think,AI isnt a single technology.Its a collection of technologies and approaches aimed at finding patterns in mountains of data.Once these patterns are identified,business pr

54、ocesses can be automated.Several companies launched new artificial intelligence tools at the Global Business Travel Association annual convention this August 2022.xviii There is an abundance of data in the corporate travel industry such as booking histories,property preferences,and industry benchmar

55、ks.Business travel providers are experimenting with the use of predictive analytics(a variant of AI)to guide strategic investments and reduce trip disruption.In the corporate travel industry,exceptional traveler experience is crucial to success.The popularity of on-demand virtual assistants and bots

56、 has increased due to the combination of staff shortages and increased client demand.Bots are not always a welcomed addition,but they are necessary to automate the booking process.Chatbots in the hospitality industry provide full customer support 24/7 and reduce the load on personnel.At the airport,

57、self-service options throughout the journey have resulted in more contactless check-in,automated messaging,and self-service kiosks.The aim is to provide continued high customer service by removing time-consuming elements.AI and bots provide personalized recommendations and alternative flight details

58、 to disrupted travelers immediately.Advancements in Travel Technology The increase of travel disruption requires travelers to be proactive and plan to minimize disruptions.Ranging from automation to apps with real-time tracking,technology is deployed to manage uncertainty and regain some control.Acc

59、ording to Egencia,74%of business travelers are more likely to use digital tools like apps and virtual agents to get disrupted trips back on track since the pandemic.This trend appears to be more popular with under 35s,where 75%have adopted the tech trend as opposed to just 60%of the older generation

60、.xix Emerging Trends74%75%98%of business travelers use technology to manage trip disruptionsof travelers under age 35 said theyre more likely to use digital tools to manage their own trips since COVID vs.60%of those over age 55of young professionals value technology to manage disrupted travel schedu

61、lesAn American Express Global Business Travel CompanyWith the support of a corporate travel platform,business travelers can avoid queues and customer service desks all while having more choices for new arrangements.The survey by Egencia also reveals an appetite for more automated options to smooth t

62、ravel disruption in the future,with more than a third(34%)of frequent travelers calling for predictive flight alerts and 28%wishing for automatically rebooked flights when things go wrong.Corporate travel technology has also adapted to help the consumer save significantly.Some corporate travel platf

63、orms apply machine learning technology to automatically track price variations and rebook tickets without any action from the business traveler or arranger.When the tool identifies a lower rate within an average of the first seven days of booking,it automatically rebooks the reservation with the sam

64、e amenities and ticket class.xxBlending business and personal travel is on the riseAn increasing number of businesses are seeing changing behaviors with travelers favoring longer trips,with personal travel appended.xxi Whilst this undoubtedly brings financial and process difficulties for the busines

65、s,there is no denying the desire from the traveler to make the most of a trip.Satisfaction when traveling for work is highly correlated with how satisfied an employee is with their job in general.xxii As a result,the business world now views travel more in the fabric of work-life balance and overall

66、 personal wellness.Globally,a top workforce management challenge is retaining employees.High turnover rates impact company culture,productivity,engagement,and overhead.And replacing a burned-out employee is expensive when considering the recruiting process,training,and ramp-up periods.The average co

67、st of replacing an employee is 90200 percent of their salary.xxiii Companies are looking for new ways to prevent employee burnout and the blended business and personal travel perk is a great way to provide a work-life balance that the workforce demands.An American Express Global Business Travel Comp

68、anyAn American Express Global Business Travel CompanyTake action todayNavigating corporate travel is not all doom and gloom.As you navigate the uncertainty of corporate travel there are tools and strategies available to reduce the chaos and cost.The business travel industry has quickly learned that

69、uncertainty demands holistic and agile solutions.To better meet the satisfaction of employees and reduce costs companies must shift their business travel mindset to be data-driven,strategic,and flexible.Learn more about how Egencia can support your travel program during a time of uncertainty.Book a

70、20-minute consultation hereEgencia is the worlds corporate travel solution.We help businesses optimize their travel programs for todays fastchanging landscape managing risk,supporting traveler well-being and maximizing ROI.Companies of all sizes in more than 60 countries trust Egencia to modernize t

71、heir corporate travel programs with consistent,innovative experiences and fast,expert support.Connect with us on and follow us on Twitter and LinkedIn.Independent Insight provided byAn American Express Global Business Travel Company 2022 Egencia LLC.All rights reseved.GBT Travel Services UK Limited(

72、GBT UK)and its authorized sublicensees(including Ovation Travel Group and Egencia)use certain trademarks and service marks of American Express Company or its subsidiaries(American Express)in the“American Express Global Business Travel”and“American Express Meetings&Events”brands and in connection wit

73、h its business for permitted uses only under a limited license from American Express(Licensed Marks).The Licensed Marks are trademarks or service marks of,and the property of,American Express.GBT UK is a subsidiary of Global Business Travel Group,Inc.(NYSE:GBTG).American Express holds a minority interest in GBTG,which operates as a separate company from American Express.An American Express Global Business Travel CompanyI.https:/ attend-conferences-conventions-or-trade-shows-next-sixIII.https:/ Economic%20Impact%20and%20Trends%202021.pdfVIII.https:/