What Makes a Strong Travel Program in 2023
The past few years have placed a renewed focus on the importance of return on investment for corporate travel expenditures and approvals. At the same time, many companies have recognized the inherent value gained by in person meetings, even though the return may be viewed as soft and long term. Despite how your organization has returned to travel, the fundamental strategies that yield program optimization have remained intact as we come out of this period of “things will never be the same”: clear and concise travel policy, executive support, intelligent automation, well negotiated supplier contracts, and the right customer support. The difference in 2023 is that successfully navigating through many of these fundamental principles in business travel will require both flexibility and even some creative thinking. Here are some of the emerging trends we are seeing and advice we are providing our clients as we make our way into 2023.
Supplier Partnerships ARE Partnerships
The concept that supplier deals in the corporate travel space do not follow traditional procurement rules has always been a tough message to deliver to some clients. Air, car, and hotel supplier contracting are heavily dependent on market share, volume data, and solid client relationships. Unlike many traditional indirect spend categories, discounting and deals are not solely dependent on spend volume. Strong and transparent vendor partnerships are more important now than ever before.
Travel Management Companies (TMC’s), suppliers, and corporate clients have to come together to develop the right strategy. As a result of uneven travel patterns as travelers get back to a semblance of a new normal, staffing shortages, and impending content disruption, candid conversations must take place around technology capabilities, service, and expectations. Modern retailing channels and technology limitations will assuredly cause companies to miss market share and volume expectations, harming the relationships that have been built and sowing distrust. KesselRun is advocating for open dialogue with our client stakeholders to ensure everyone understands how the industry is changing and impact it will have on their program.
Another difficult “ask” particularly for our larger clients. It is important to keep in mind that both internal and external change has a ripple effect throughout the entire travel program including policy, communications, education, and operations. As our corporate clients start to travel under new approval guidelines, we need to keep this in mind. And as we start to see the impact of industry change such as NDC and content disruption, it is important that everyone understands what happens when a traveler books directly on a supplier website or how to respond to a traveler who can’t find a rate on their corporate booking tool, or how to handle NDC reservations that an agent cannot service. Not only are these critical items operationally but also will have a direct impact on the customer relationship across its supplier base. At KesselRun, as we analyze historic travel patterns and try to forecast demand, we are working with our clients to quickly roll out solutions as well as operating protocol and communications strategy to support these changes.
2019 isn’t coming back. Almost without exception, our clients no longer have the same travel footprint they had pre-pandemic. Travel has come back a great deal and we expect a full recovery but patterns have changed. Most companies have shifted their views about the role travel plays in their organization which means priorities have also shifted. Both long and short haul routes are struggling with pilot shortages, TMC’s are short travel counselors, hoteliers need staff, and even car washers at your favorite rental brand are in high demand. There is no end in sight and no easy solution.
At KesselRun, we are reinforcing this reality to our clients and warning that ignoring these issues will not cause them to resolve. Instead, we take each client’s situation as unique. In some cases, technology can solve some of the issues we face. In others, shared resources can alleviate the burden. We have seen more automation efforts across the entire corporate travel supply chain than ever before – automating expense, streamlining reconciliation processes, simplifying supplier contracting and RFP efforts, and loosening travel policy to give travelers more choice.
Humbleness and Networking
I know it’s a rather odd suggestion but 2023 is the year to leave your ego at the door. After 25 years in corporate travel I still have yet to meet anyone who knows everything about this complex industry. Today, the complexity has exponentially increased and we are all trying to make our way through a lot of change. It makes sense to work with industry peers at other companies and within the industry. Find out what is working and what is not. How does it apply to your situation and how can you apply new thinking to your program? No one has all of the answers and KesselRun’s advice is that if anyone pretends to, run away fast.
KesselRun’s Perspective on 2023
The travel industry faces staffing issues, technology challenges, and a changing attitude amongst travelers around efficiency, brand loyalty, and service expectations. We are in a perfect storm that will leave an uncharted landscape in its wake. KesselRun is focused on the fundamentals while recognizing the need for flexibility in the way programs are managed. We are talking to as many cross-functional travel adjacent peers as we can to find out what is important to them. We are encouraging our clients to review as many industry “disruptors” as they can, as many are here to stay and many have great ideas.
Finally, don’t expect a panacea in 2023 and while KesselRun can help you navigate, we don’t have all of the answers either. This will be the year where no one solution may be perfect for any particular problem and an open mind may be the smartest strategy to keep your program on track.
KesselRun specializes in helping companies manage and optimize travel programs. We provide custom solutions and independent thought leadership to a growing list of clients and would be happy to help you develop a best-in-class program for your business needs.