The global and local corporate travel outlook: GBTA, BTA and ATMC

A summary from the plenary session at the Australia Corporate Travel Summit on 13 November 2024.

Key Ideas

1. Global Business Travel Recovery: The global business travel spend is predicted to reach $1.4 trillion in 2024, with an expected growth of 11% this year and a compound annual growth rate of around 7% from 2025 to 2028. 

2. Content Fragmentation: In the UK, fragmentation in travel management is a significant issue, characterised by price and content parity challenges. TMCs are working to address this fragmentation to better serve travel managers and business travelers. 

3. Evolving Role of TMCs: TMCs are transitioning from traditional travel agents to strategic business partners, focusing on providing value through technology and human investment, rather than just booking services. 

4. Sustainability in Business Travel: There is a growing emphasis on sustainability within the travel industry, with TMCs needing to measure and report on carbon emissions and the overall impact of business travel on sustainability goals.

5. Digital Transformation and Technology Integration: The panel discusses the need for TMCs to invest in technology and digital platforms to aggregate content and improve service delivery, ensuring that they can meet the evolving needs of their clients.

Host & Overview: Festive Road, Head of Performance, Mike Orchard

• Global Business Travel Association, Regional SVP - EMEA and APAC, Catherine Logan 

• Association of Travel Management Companies, Chairperson, Tass Messinis 

• The Business Travel Association, CEO, Clive Wratten

Overview

Industry experts discussed the latest trends and challenges in global business travel, highlighting the GBTA Business Travel Index Outlook, which predicts a $1.4 trillion global spend in 2024, marking an 11% growth as the market stabilises from a peak of 30% in 2023.

With Asia Pacific leading in business travel expenditure, the panel addressed critical issues including content fragmentation and the evolving role of Travel Management Companies (TMCs), emphasising the necessity for TMCs to adopt digital-first technologies, enhance payment solutions, and prioritise sustainability metrics.

The conversation also noted a strategic shift in TMCs’ business models towards management fees, alongside a growing focus on data analytics, AI, and expertise in regulatory compliance. Action items were proposed for downloading relevant resources and exploring sustainability frameworks to support the industry’s adaptation to these emerging trends.

Session Notes

Global Travel Outlook

• GBTA Business Travel Index Outlook predicts global business travel spend of $1.4 trillion in 2024

  • Global business travel spend is expected to grow by 11% in 2024, following a 30% growth in the previous year.

  • By 2028, global business travel spend is projected to exceed $2 trillion.

  • The figures presented are in US dollars and are not adjusted for inflation.

    
    

• 11% growth expected in 2024, moderating from 30% growth in 2023

  • The expected 11% growth in 2024 indicates a stabilisation in the business travel market following a rapid recovery phase.

  • This moderation from the previous year's 30% growth suggests that the market is returning to pre-pandemic levels of growth.

  • Factors influencing this trend may include economic conditions, corporate travel policies, and evolving traveler preferences.

    
    

• Asia Pacific leads with over 40% of global business travel spend

  • Asia Pacific is expected to continue its dominance in global business travel spending, with a projected growth rate of around 14% in 2024.

  • The region's business travel spend was significantly impacted by the pandemic but has shown a strong recovery, outpacing other regions.

  • Asia Pacific accounts for a larger share of global business travel spend compared to other regions, indicating its importance in the global economy.

• Australia ranked 10th in top 15 markets for business travel spend

  
  

• 83% of Australian business travellers report recent trips as worthwhile for achieving objectives

  • The high percentage indicates a strong perceived value of in-person interactions in achieving business goals.

  • Business trips often facilitate networking, collaboration, and relationship-building that are difficult to replicate virtually.

  • The findings suggest that companies may benefit from investing in business travel to enhance productivity and drive results.

    
    

• Fragmentation is a major issue in UK travel management

  • Fragmentation in UK travel management refers to the lack of price and content parity across various suppliers, leading to inconsistencies and frustrations for travel managers.

  • Travel management companies (TMCs) are working to address fragmentation by developing technology solutions and fostering better relationships with suppliers to ensure a more cohesive travel experience for clients.

  • The industry is moving towards a more collaborative approach, where TMCs act as strategic partners to help businesses navigate the complexities of travel management and improve overall service delivery.

    
    

• TMCs becoming critical in addressing fragmentation and proving their worth

  • TMCs are leveraging technology to aggregate content and provide comprehensive solutions to travel managers, addressing the issue of fragmentation in the marketplace.

  • They are evolving from traditional travel agents to strategic partners, focusing on delivering value through data analytics, duty of care, and sustainability initiatives.

  • TMCs are advocating for transparency in pricing models, moving away from transaction fees to more sustainable and profitable pricing structures that reflect their enhanced service offerings.

Evolving TMC Role and Industry Challenges

• Content fragmentation remains a global challenge for TMCs and suppliers

  • Content fragmentation leads to inconsistencies in pricing and availability, making it difficult for TMCs to provide comprehensive options to clients.

  • The challenge requires collaboration among TMCs, suppliers, and technology providers to create a seamless distribution model that ensures parity in content.

  • Addressing content fragmentation is crucial for enhancing the traveler experience and maximising the value of business travel for organisations.

• Digital-first technology becoming crucial for TMCs

  • Digital-first technology is essential for TMCs to effectively aggregate and manage travel content.

  • It enables TMCs to provide a seamless and efficient booking experience for clients, enhancing user satisfaction.

  • Investing in advanced technology solutions allows TMCs to stay competitive and adapt to evolving market demands and customer expectations.

• TMCs need to become aggregators of supply and customer consumption

  • TMCs must invest in advanced technology platforms to effectively aggregate diverse travel content from various suppliers.

  • They should focus on enhancing customer experience by providing seamless access to travel options and services through user-friendly interfaces.

  • Collaboration with suppliers and technology providers is essential to ensure data transparency and improve pricing parity for clients.

• Payment solutions and end-to-end reconciliation processes are areas for improvement

• Sustainability reporting and metrics becoming increasingly important for TMCs

  • Sustainability reporting and metrics are essential for TMCs to demonstrate their commitment to environmental responsibility.

  • TMCs need to provide clients with clear metrics on carbon emissions and sustainability efforts to meet growing corporate social responsibility expectations.

  • Integrating sustainability metrics into travel management processes can enhance decision-making and improve overall travel program effectiveness.

• New players entering market as digital-first agencies (e.g., Navan, Spotnana)

  • Digital-first agencies like Navan, Spotnana are leveraging technology to streamline travel management processes and enhance customer experience.

  • These agencies focus on aggregating content and providing seamless access to travel options, often utilising advanced data analytics and AI to optimise travel decisions.

  • The rise of digital-first agencies is prompting traditional TMCs to innovate and adapt their service offerings to remain competitive in a rapidly evolving market.

    
    

Strategic Partnerships and Industry Shifts

• TMCs positioning themselves as strategic partners to businesses

  • TMCs are evolving from traditional travel agents to strategic partners by offering tailored solutions that align with business objectives.

  • They provide valuable insights through data analytics, helping companies optimise travel spend and improve overall efficiency.

  • TMCs are focusing on sustainability and duty of care, ensuring that travel policies meet corporate social responsibility goals while enhancing traveler safety.

    
    

• Shift from transaction fee models to management fee models

  • The shift from transaction fee models to management fee models is driven by the need for more sustainable revenue structures for TMCs.

  • Management fee models provide greater transparency and predictability in pricing for clients, allowing for better budget management.

  • This shift encourages TMCs to focus on delivering value-added services and strategic partnerships rather than competing solely on transaction volume.

    
    

• Sustainability, data analytics, and AI are key focus areas for travel managers

  • Sustainability initiatives are increasingly integrated into travel policies, emphasising eco-friendly choices and carbon offsetting.

  • Data analytics is utilised to measure travel spend, identify trends, and optimise travel programs for cost savings and efficiency.

  • AI technologies are being adopted to enhance traveler experience, streamline booking processes, and provide personalised travel recommendations.

    
    

• Visa and entry requirements expertise becoming crucial for TMCs

  • Travel Management Companies (TMCs) are increasingly relied upon for their expertise in navigating complex visa and entry requirements, especially as global travel resumes post-pandemic.

  • TMCs serve as trusted partners for businesses, ensuring compliance with varying regulations and facilitating smooth travel experiences for employees.

  • With changing entry requirements, TMCs must stay updated on international policies to provide timely advice and support to their clients.

    
    

• ROI of travel and TMC value proposition changing

  • TMCs are shifting their focus from merely providing travel bookings to offering strategic consulting services that enhance business outcomes.

  • The value proposition of TMCs is increasingly centred around delivering measurable ROI through improved travel efficiency, cost savings, and enhanced traveler experience.

  • TMCs are leveraging technology and data analytics to provide insights that help organisations assess the effectiveness of their travel programs and make informed decisions.

    
    

• GBTA focusing on four key areas for sustainability: traveler decisions, sustainable procurement, emissions measurement, and future investment

  • Helping travellers make informed decisions by providing clear policies and options at the point of sale to encourage sustainable choices.

  • Integrating sustainability as a critical criterion in the procurement process, ensuring that suppliers meet environmental standards and commitments.

  • Implementing robust measurement systems for emissions to track and report on the environmental impact of business travel, facilitating accountability and transparency.

  • Encouraging investment in sustainable practices and technologies within the travel industry to drive long-term change and reduce carbon footprints.