How is the Energy Crisis Impacting Business Travel?
In the UK, political and social discourse has been rushing like whitewater; no sooner has one crisis peaked than another looms large. One of those crises – and probably the biggest for many – is the energy crisis. But the UK is not alone, or uniquely affected by the rising cost of power production.
It’s happening everywhere.
America is wrestling with its worst energy crisis in nearly five decades. France is imposing an energy price cap increase of 15%. Germany has lit up its coal power plants once again, rolling back decades of relatively clean power production.
The implication of all of this is higher energy costs for all. But while average households might worry about their next electricity bill, businesses face the morbid reality of having to downsize, cut staff, or even closing up shop.
No industry or infrastructure today can run without power. Food production, travel, hospitality, online services, finance, medical, automotive – you name it, it’s dependent on energy.
And that fact alone makes an energy crisis an everything crisis. And yes, that includes business travel.
An energy crisis is an everything crisis
Energy bills for the average small business have quadrupled in the last 18 months. Smaller companies will be unable to shoulder that burden for long – but the impact is no less severe for bigger companies. Operating costs will come at the expense of shrinking workforces – with staffing already a huge problem in the travel sector – and the all-too depressing double whammy of stagflation.
We all lose in an energy crisis. So, why are we here? And how did things get this bad?
The answer that many pundits and experts present is Russia’s war in Ukraine, and the political fallout of it.
Russia has slashed the supply of natural gas, and as the second largest global supplier, this has rocked the market. There’s plenty of gas to go around – but not everyone wants to share it. The demand versus supply globally has shunted the price up.
But that’s not the whole story – and while Russia has the largest reserves of natural gas of any country (a quarter of all the gas in the world), its gas production is massively overshadowed by that of the United States.
Despite the political commentary being offered, the primary cause of the crisis is the rebound from the Covid pandemic. Power generators that had been shut down could not ramp up in time to meet renewed demand – and this was only worsened by the war in Ukraine.
It’s a similar story to the staffing crisis many industries face, and the supply chain woes still being felt by so many. In fact, they are all tightly linked by one common feature:
There aren’t enough people to do the work.
In 2020, all the world’s talent and industrial muscle was either forced to find work elsewhere, or died of Covid.
This is the true legacy of the pandemic. How will business travel – and particularly the hotels dependent on it – continue to operate?
Can hotels afford to pass these costs on to travellers?
Hotel owners are preparing for soaring energy costs. Some hotel groups have seen their energy costs more than double in the last year. But help has been promised, across Europe at least, to the tune of some-$280 billion in relief for those bearing the brunt of the energy crisis.
For now though, the crisis is outrunning the help on offer.
What can TMCs do in times like these – to support their clients, and keep the industry healthy in yet another challenging year?
How TMCs can help reduce costs for businesses
TMCs exist as businesses first and foremost – but the obligation to serve the best interests of the client, suppliers, and the industry as a whole has never been more pertinent.
Even large corporate clients will struggle to justify mounting costs at a time when even their best-paid members of staff are wondering how they’ll foot their electricity bills.
TMCs should be working with their customers to become leaner and more efficient with business travel arrangements and hotel bookings.
- Review travel policies, and streamline wherever possible
- Analyse current rates; what is the market doing, and where can value be optimised?
- Reduce travel expenses and the cost of processing them: Vcards, automation
Travel policy and expenses
The client’s travel policy is theirs to administer – but a time of crisis calls for a review of the company’s rules and procedures on booking, approving, and expensing business travel.
That might look like a freeze on business or first class flights, maximising the benefits of group hotel bookings, or changing the way travel expenses are administered (including what can be claimed, and adjusting acceptable ranges). The travel policy may also include preferred suppliers, but in volatile times, those preferential rates might not be available anymore.
Shopping around – and hotel reshopping – could certainly help.
Run a tight ship
Probably the biggest help TMCs can offer is efficiency. Clients lean on TMCs because they have the resources and connections to manage travel more effectively than the company could do themselves. And that includes corporate hotel bookings, which can be complex.
HotelHub is committed to giving TMCs the best tools in the world for business travel hotel bookings.
Our flagship product greatly reduces wasted time, improves productivity and can quite literally increase hotel attachment by double, all while serving the client with the best possible rates.
And so long as we’re paying so much to power it – surely it’s time to let technology do the heavy lifting?
Boost business travel – with optimised hotel bookings for TMCs
HotelHub is the world’s most advanced hotel booking software. Our unique platform makes hotel booking for corporate clients easier than ever before, and lets TMCs maximise the return from their hotel strategy.