Here in the Northern Hemisphere, winter is coming.
And everyone in the travel sector knows that, as the summer peak recedes and the demand for leisure travel drops, priorities tend to shift. Airlines, hotels and hospitality services gear up for conferences and expos – and the business travellers they bring.
But something’s different this year.
A return to normal?
We’re in the first full year of unencumbered travel since the global coronavirus lockdowns and the travel sector has a lot of lost ground to make up financially.
Catching up is going to be hard, especially when business air travel remains about 25% to 30% below 2019 levels. In the face of growing running costs and the debts incurred by Covid-19, airlines are hiking prices sharply to keep up.
But on the hospitality side, our data from HotelHub users shows that business hotel bookings are at 120% of 2019 levels. This tells us a few things:
- the prediction that business travel will move away from flights is coming true
- corporate clients will seek to reduce costs overall when flights are required
- hotel attachment is now a major opportunity for TMCs.
With flights becoming pricier, we may see a further rise in ground-based alternatives, and more businesses favouring localised travel. For those who have no choice but to fly, it’s likely that travel policy changes will come into play, favouring cheaper options. TMCs may need to diversify their supplier mix to account for this.
The only constant, though, is the increasing value of hotel bookings – the one clear growth area for TMCs since travel returned in full force.
When airlines zig, TMCs have to zag
In the grips of an energy crisis, travel is just one sector among the many that suffer.
But it’s far more pronounced in the travel industry because of the immediate effects that the pandemic had – and which continue to be felt. Staffing shortages are still rife in every segment and rising inflation is only making matters worse.
However, where some see crises, others see opportunities.
And for TMCs, that opportunity is in strategy. If airlines are hiking prices for business and corporate travel, TMCs can service their clients better by seeking ways to counter the cost through greater efficiency, alternative transportation – and by engaging in a rock-solid strategy.
In fact, this need to embrace strategy has been backed by two separate European associations: the Institute of Travel Management in the UK and the Association of Swiss Travel Management.
A shift in ways of working
Travel managers who retained their roles during lockdowns have stepped up to new strategic and operational demands. While challenging, this has opened up an opportunity for closer relationships with clients, leaner operations, a deeper embracing of travel technology and a shift in strategy.
By getting to know what clients are prepared to adapt to, to risk and to absorb, TMCs can strategise more effectively, seeking cost-savings in new focus areas – namely, in hotels.
Leveraging hotel strategy
A solid hotel strategy is a benefit to both the TMC and their clients.
Clients benefit from optimised costs and a highly efficient process – they pay a fairer price and still get the exceptional service they demand. Meanwhile, TMCs benefit from higher attachment rates and profits as a result.
But this can only happen if TMCs can provide tangible value by including business hotel bookings in their services to clients. And to do this, there needs to be an investment in travel technology that can demonstrate this value over time.
Of course, technology alone isn’t the solution. No single tool or service is a silver bullet. But, much like you can’t build a house without a hammer, you can’t build an enterprise without technology. Tech tools enable strategy; they don’t write it.
Part of your strategy toolkit
If you’re ready to rise to that challenge, the hard part’s almost over – because with HotelHub, proving the value of your hotel strategy is so simple, it’s practically automatic.
TMCs can demonstrate the value of the hotel strategy with hard facts and data, all of which is collected automatically by HotelHub. It then creates analytics and reporting dashboards which gives full transparency to clients and provides TMCs valuable insight on performance – allowing travel managers to adjust their strategy accordingly.
You can actively monitor your hotel strategy and goals versus real-world performance, with full visibility on hotel volumes and hotel attachment rates. Track savings, commission, and revenue – while making previously unknown data on hotel bookings available.
But HotelHub does so much more. From finding the best possible in-policy rates to cutting manual back office processes, it’s been the tech tool of choice for the world’s biggest TMCs for over a decade with good reason.