Companies still ignore Airbnbs for Biz Trips: A New Deloitte Study

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A new Deloitte report highlighted the lack of interest from companies in alternative accommodation, despite its popularity during the pandemic.

It seems that this phenomenon could only be a short-term matter, as only 9 percent of the companies surveyed had non-hotel accommodation in their corporate booking tools.

“The acceptance of non-hotel accommodation has increased for recreational travelers. More people are getting used to it, they like it, ”said Mike Daher, head of transport, hospitality and services at Deloitte. “It’s different on business trips.”

There is a common problem with linking booking tools and risk factors, but perhaps more importantly, employees lose loyalty points that could go on their next vacation.

“When people go on business trips, yes, it can be fun and exciting and there is a team dinner at night, but people also consider it the price of their personal lives,” Daher added. “I’m away from my family, dog or home, so I want points and I want to use them for leisure travel. It’s a way to get compensation for your personal time and points are an important part of choosing business travelers. “

The reason was also the lack of a standardized product in different regions, he added.

And according to a new report entitled “Reshaping the Landscape: Corporate Travel in 2022 and Beyond”, published on Monday, about half (49 percent) of companies do not reimburse employees outside the hotel.

People value their status in these programs, he added, and to some extent that explains why Selina recently launched her own loyalty program.

Irrational behavior

Daher, who oversees a strong team of 4,100 people in Deloitte, also warned travel managers to prepare for inflation fluctuations in addition to “irrational” supplier prices.

According to him, they are likely to be hit mainly by the costs of flying through the transatlantic territory. “I don’t think most companies currently have a budget for inflation prices in travel,” Daher said. “Many of them are a little surprised that airlines and hotels in certain markets charge such a pre-pandemic premium.”

While North American aviation fuel prices have risen more than 30 percent in the past month, Daher, who took over last October, pointed out that many airlines and hotels will now try to offset losses when demand returns. .

“There is also some irrational behavior,” he added. “We have to make up for lost time, we will only increase the price because people are willing to pay for it. European routes in the US in particular will be really expensive. “

Fake start

The new report also reveals how far travel managers have been far beyond predicting a return to pre-pandemic volumes.

It was found that one-third (34 percent) of corporate travel service managers surveyed in June 2021 expected to reach half of their travel expenses by 2019 by the end of 2021. However, only 8 percent had reached this milestone. “Corporate travel will experience a steady but not meteoric rise this year,” the report said.

According to a survey of 150 travel managers and executives with various titles and travel budget oversight, conducted from 10 to 18 February this year, travel spending is expected to reach 36 percent of the 2019 level in the second quarter of this year, and 55 percent said by the end of the year. By the end of 2023, surveyed travel managers predicted that travel spending would reach 68 percent of spending in 2019.

This figure is not entirely consistent with recent figures released by American Express Global Business Travel during its investor day last week, which reported an 80- to 100-percent recovery by the end of 2023 based on findings by Fitch and the US Travel Association.

The Deloitte survey also reveals that 17 percent of travel managers expect a full recovery by the end of 2022, a significant drop from the 54 percent that expected the same last summer.

Her survey in June 2021 coincided with renewed optimism over the introduction of vaccines. “People believed in it very much and were excited to return (travel). This turned out not to be the case, especially in the case of the Delta, “added Daher, who this time urged travel managers to clearly define what a” high value “trip means. And given rising costs, longer routes due to the closure of Russian airspace and a shortage of staff, contingency plans must be taken into account if costs are further distorted.

“All of these factors may change over the next six months,” he said. “The problem, however, is that pre-pandemic business managers used to set a budget every year, making small adjustments here and there. We are in a much more unstable time at the moment. “

Conferences are back

Despite concerns about Covid and rising costs, Daher predicts an increase large corporate conferences. Companies will consider how to maximize impact, so events where the CEO can appear and inspire their people can be popular throughout the year.

“I always see business trips as a return on investment. “Every dollar a company spends, the equation changes,” he said. “Has the value side changed in terms of what high value roads are today? It’s building culture, training, critical business meetings, building relationships with clients. “

And we should not rule out a decline in international travel, especially between the United States and Europe. “Most international trips were by definition high because they had much more corporate control,” he added. “If you went from London to Miami for a conference, you probably had your boss approve the trip. I’m bull. “

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