While Airlines Lean on Business Travel, TMCs Lean on Strategy
Estimated reading time: 4 minutes
Here comes winter – in the northern hemisphere at least. And everyone in the travel sector knows that as the summer peak recedes and leisure travel demand drops, priorities tend to shift.
For airlines, the priority shifts away from tourism to business travel, as the days shorten in the northern half of the world. Same goes for hospitality and hotels, who gear up for conferences and expos, and look for more business travel customers.
But something’s different this year.
We’re in the first full year of unencumbered travel, since the global coronavirus lockdowns of 2019 and onwards. 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 first-party data 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 mayl 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 hospitality and 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 effect that the pandemic had – one that hasn’t fully recovered. Staffing shortages are still rife, in every segment from hospitality to TMCs themselves, and rising inflation is only making matters worse.
Read more: How is the Energy Crisis Impacting Business Travel?
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 solid strategy.
And this need to embrace strategy has all but been confirmed by two separate European associations: the Institute of Travel Management in the UK and the Association of Swiss Travel Management.
Travel Managers who retained their roles during lockdowns (and the subsequent financial pressures of them) have stepped up to new strategic and operational demands – and 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.
A hotel strategy benefits everyone
A solid hotel strategy is a benefit to both clients and the TMC.
Clients benefit from optimised costs, and a highly effective and efficient process – they pay a fairer price, and still get the exceptional service they demand.
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. And to do this, there needs to be an investment in travel technology that can prove this value over time.
Technology alone isn’t the solution – in fact, 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 tools.
Tools enable strategy. They don’t write it.
But, 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.
HotelHub creates analytics and reporting dashboards, which gives full transparency to clients, and gives 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. Learn more about HotelHub, and how it helps TMCs achieve their strategic goals:
See your strategy through – with HotelHub
HotelHub is the world’s most advanced travel management software for business hotel bookings. Our unique platform makes hotel booking for corporate clients easier than ever before, and lets TMCs maximise the return from their hotel strategy.