By Julie Stuckey, Marketing Consultant of Advito
At a recent meeting of the Global Business Travel Association’s South Florida chapter, Advito’s Senior Director and Practice Area Leader of Traveler Engagement, Michael Silvey, presented a deep-dive analysis of Advito’s 2019 travel industry forecast. He covered various travel segments, economic growth assumptions, technology forecasts, and factors that could influence those predictions. He also talked about the best approach to using technology to personalize the traveler experience and influence behavior.
Michael’s forecast uncovered five key trends in business travel that will influence how corporate travel programs are managed throughout 2019, and beyond.
Business traveler behavior can be irrational, but it can be changed
Individual choices can be irrational. The principals of behavioral economics dictate that the way people make choices is influenced by several different factors, including the perceived value of a product or service, and even the actions of their peers. Suppliers often see firsthand how travelers pick lower rates because of the perceived value. Often, the traveler who chooses the lowest cost option may end up having to pay more for benefits not included in the rate, or find they’ve booked out of policy. More importantly, this can become a duty of care issue for the both the traveler and their company. Data suggests there are ways to shift what travelers define as “value” to better align with corporate travel program goals. It also shows that it is crucial for corporate travel programs to segment their travelers, as similar behaviors often appear within specific groups.
Overall global economic growth will slow in 2019
While we expect to see overall global economic growth slow, 2019 should still be a good year for emerging markets, staying relatively consistent with 2018 at 4.6%. Growth across Africa will rise from 3.8% to 4.2%, as prospects improve for the region’s key economies, including Egypt, Nigeria and South Africa. Latin American growth will progress from 2.0% to 3.1%, as the recovery in the Brazilian economy accelerates. And, the outlook has also improved for Argentina and Colombia.
Mature economies will see the most change as they begin to lose momentum, with several different risk factors (outlined below) contributing to the downturn. Asian growth will be slightly weaker in 2019, falling from 4.7% to 4.5%, as both the Chinese and Indian economies show signs of slowing.
Terrorism will be the most significant risk factor for travel
While the number of incidents and casualties declined in 2017, terrorism will continue to be a persistent and significant threat, with soft targets being more common. As these can happen anywhere, anytime, business travel managers must ensure travelers remain vigilant and know how best to react in such an event. They must also put in place measures to ensure travelers are looked after if they are caught up in any incidents.
While terrorism will remain the top risk factor for travel, other emerging risks for 2019 include trade disputes, political conflicts, the destabilization of stock markets, extreme weather, and even localized virus outbreaks. Companies must seriously assess their duty of care practices and policies to best prepare their travelers for the disruptions caused by these risks.
Companies must shift both their technology strategy and mindset to enhance travelers’ overall digital experience
As digital transformation drives improvement to technology tools across nearly every industry –we are starting to see a shift to consolidation. Who wants to remember another password? Or manage a ridiculous number of apps for each segment of their journey? Since an increasing number of touchpoints in the consumer journey are happening in the digital space, and the amount of companies vying for consumer attention is increasing, there’s a high chance we’ll see suppliers partnering and communicating with each other to improve the overall travel experience.
Companies can change their travelers’ behavior
Changing traveler behavior can seem like a very complicated endeavor. Advito’s Traveler Engagement services center around four pillars for driving behavior change – merchandising, collaboration, policy, and marketing. With the right merchandising and technology tools in place, companies can influence travelers at the critical buying decision point in the online booking tool by promoting their preferred choices. Collaboration explores the technology landscape to identify performance deficits and provide solutions, such as program assessment and virtual collaboration tools. Policy is the cornerstone of a travel program, but it is not just about telling travelers what they can and can’t do. It is important to identify areas of traveler satisfaction or dissatisfaction and determine if the policy is actually encouraging bad decisions and needs to be changed. And finally, with a traveler marketing strategy in place, companies can communicate targeted messaging and improve their travelers’ overall experience.
There are many factors that will influence how travel managers run their programs in 2019 – from consolidation in the travel tech landscape, to shifting economic trends and emerging risks. Finding an effective way to communicate to travelers and affect positive change in their behavior is going to be the most important tool for driving efficiencies in an increasingly complex travel ecosystem.
Learn more about Advito’s Traveler Engagement services.