60% of businesses report changed travel policies – a growing trend that may persist
Travel has long been an essential part of the corporate world, whether for improving employee morale, strengthening business partnerships, laying the foundation for a future association, or simply gaining knowledge about other markets. Indeed, the list of reasons why travel has been such an integral part of the business realm can continue, as any business that has external operations and tasks knows that not every important meeting can be done on Zoom, nor is it always the way to close the best deals or solve disputes. However, the trend's trajectory declined despite being a go-to for employers and employees in the pre-pandemic years. According to a recent study from Morning Consult, a global data analyst providing customer market insights, almost a third of businesses modified their business travel policies. This move often takes two forms: 60% would cut back on the number of corporate travel trips, whereas 56% would reduce the number of employees sent on trips. For almost 40% of respondents, the factors behind the changes in travel policies stem from a shrinking budget directed to these activities as well as the rising costs in airfares.
Developing strategies to control business travel expenses
Eliminating business trips is beyond the bounds of possibility. Regardless of the areas where businesses make changes and how much they cut costs, the corporate travel industry is still strong. Some companies catch on to the shifting trends and work out ways to capitalize on them, meeting the new customer needs. As such, there are more opportunities on the horizon for businesses that seek ways to cut expenditures related to business trips these days.
Gone are the days of parking at the airport only to pay extra fees to get closer to the terminal. Clever business travelers today can use platforms that secure them more affordable parking spots while providing a range of benefits, like valet parking and constant vehicle monitoring. Sydney Airport car park is a good example of a sound and budget-conscious choice that benefits both the company's budget and the traveler's transportation convenience, helping avoid the added fees of parking near the airport. As such, if you're flying from Sydney for any type of trip abroad and want to secure cost savings, you can easily book a spot at the airport parking in Sydney after you've checked your departure terminal. Having this information is important since you don't want to arrive at T2 only to find out your flight leaves from another terminal.
Additionally, other expense-trimming practices businesses implement in their travel policies are linked to early booking. Booking anything in advance is among the most budget-friendly solutions, whether it refers to the parking spot, airline reservation, or accommodation. For instance, more businesses successfully manage expenses by booking tickets several weeks in advance.
As the report from Morning Consult finds, other changes that are expected to continue to mark corporate travel are as follows:
- Lower expenditures on entertainment, food, and beverages
- The use of public transport or other transportation methods
- Reduced spending on accommodation and transport
- Reduced number of traveling employees
- Fewer corporate trips.
The changing travel policies
According to the analyst's report, around 32% of businesses stated they're changing their corporate travel policies to reach a short-term goal or for an indefinite period. For 12% of the surveyed companies, the changes will persist as long as the business exists.
Additionally, larger businesses appear to be those that decrease the number of employee travel trips and find alternatives to replace this activity, like Zoom meetings, in order to save costs at the end of the month. A potent factor behind these modifications is related to the extensive use of virtual meeting rooms that spread with the pandemic, as well as the creation of strategies to reduce the impact of the arising recession projected for 2024.
The giant corporations Google and Microsoft may be among the last examples to come to mind when discussing companies that reduced business travel budgets. However, they both took action in this regard, with Google soliciting managers to travel only when there's a "high bar" on a corporate trip, reducing team meetings outside the office, and resorting to virtual meetings instead of face-to-face ones when possible. Microsoft, the world's leading software provider, also implemented similar cost-reducing restrictions.
The shifting traveling trends
A recent report from Deloitte, a global professional service provider, shows that a partial business travel recovery is projected by late 2024. However, it's unlikely to go back to pre-pandemic levels. Live events will likely trigger growth, as more than half of managers predict that industry events will boost travel this year. Trips abroad may rise, with travel costs expected to rise to 33% in 2023 from 21% in 2022. Hybrid and remote work, as well as technological developments, have resulted in client-focused travel taking precedence over internal meetings and team building. Additionally, more and more businesses are working on methods to realize their 2030 sustainability goals, with reduced employee travel topping the list of effective strategies.
The rise of the "bleisure traveler"
Never before have flexible work arrangements been more sought-after. For some individuals breaking into the workforce or on job hunting, being offered this option represents a must that makes or breaks the deal. Employees want more flexibility, and as reports show, 77% of workers are more likely to take a job if they're guaranteed telecommuting opportunities. Employees are even more willing to pay more for combined trips if it allows them to make more out of their travel.
Indeed, this growing trend has led to a surge in "bleisure" travel, a mix between "leisure" and "business." This emerging type of business travel has implications for how this industry transforms, showing that employees want a more enjoyable journey that permits them to explore places and have a good time regardless of how the economy is shaping up.
While business travel is still holding strong, it’s unlikely that it will return to pre-pandemic levels anytime soon, nor will the big-spending corporate trips be back in the foreseeable future.
