It’s only April, but business travel spend is surging ahead of projections for 2015, budgets and approved levels in USA, thanks to a booming domestic economy. A record number of business travellers are taking a record number of trips and spending record amounts on sales calls, training meetings and corporate events, as the data from the Global Business Travel Association Foundation shows. U.S. business travel is projected to top $310 billion this year, a record 6.2% increase on top of a record-breaking 2014.

Nevertheless, the situation is not so promising in the rest of the world, where there are economies that have not begun the recovery path. Fortunately Spain is one of the countries in Europe in which every leading economic indicator is heading up. The business cycle is in an upswing, employment is rising, real incomes are rising, corporate sales are rising and corporate profits are rising. Companies are confident that revenues will continue to grow and are continuing to invest in business travel. The only risk to that growth would a surprising result in the spring regional elections.

But as Spain is a mature market the spending on business travel and conventions will grow slowly in 2015, in an environment of moderate economic growth and that growth, from my personal point of view, will be influenced by the following trends:

1)  More spending in international business travel, due to a greater internationalization of Spanish companies.

2) More events (meetings, conventions and trainings) but with less participants.

3) More impact of mobile in all the business travel cycle.

4) Low cost will be the new normal, specially on the flight side, where companies like Vueling, Easyjet,  Air Berlin and even Ryanair are thinking in the business traveler, designing a product for the corporate segment, with more flexible tickets, good times, connections, etc…

5) No Frill Chic instead of classical luxury, as many companies are now reluctant to ostentation and luxury expenditure on their travels.

6) Increased centralization of business travels expenditure in one Department and more usage of OBTs

[1], in order to optimize resources, obtain greater discounts, etc., regardless the origin of the request (sales, marketing, etc..).

7) More female business travellers, demanding customized travel product, especially in what accommodation is referred.

8  Bleisure opportunities, as more and more business travellers will combine their business travel with a private visit of the destination, blurring the line.

What is more difficult to predict is how the different players in the Business Travel Industry will react, adapt or take advantage of those trends. Specially because we are talking of a friendenemy landcaspe, with TMCs, Corporate Travel Agencies, Travel Agencies, DMCs, CPOs, Bedbanks, Wholesalers, OTAs, Hotel Portals, GDS, travel suppliers, Incoming Agencies, etc.., competing fiercely and at the same time collaborating.

From the above list, probably the Hotel Portals are one of the players who face more challenges, as they cannot cover all the travel elements and in many cases they do not have direct access to the end consumer, the company. On the other hand they are affected by the unmanaged business travel, where they have to compete with B2C giants who have more technical and marketing resources.

My recommendation for them to success in Spain, apart from obviously focusing on corporate travel accommodation, which per definition is B2B, is to clearly define a partners mapping, using this table:

 

Type of Partner

Priority

% Q2

% Q3

% Q4

TMCs

Corporate Travel Agencies

Travel Agencies

DMCs

COPs

Large national companies

Large international companies

SMBs

Partners with high volumen of web traffic which could be monetized

100

100

100

 

Thus, per each category of partner, the Hotel Portal should decide the priority to assign and which is the percentage of revenue expected from that category in each quarter. Obviously, to do that correctly, the Hotel Portal must understand the needs and requests of each category of partners –and select the right ones within the category-. For example, the focus of TMCs in 2015 is to improve companies’ global programs by helping with cost containment strategies; integrating data; integrating new mobile technologies; and accessing to local rates, combining global coverage and local footprints.  Thus, the value proposition of the Hotel Portal must match those objectives to reach a profitable and sustainable agreement.

Once the partners mapping is approved, it is time to define the objectives and the strategies and coordinate both to proceed to execution, keeping always a global vision of the picture.

Based on my previous experience, my recommendation would be to use the following Objectives/Strategies Matrix I have created:

  

Objectives

Strategies

New Deals

Increase Share of Wallet

Increase Brand Awareness

1

 Technical integration

1.1

 With client’s platform

y

1.2

 With OBT used by the client

y

1.3

 Cross device adoption

y

1.4

 Priority in product display

y

2

 Personal Networking

2.1

 Travel Managers & asimilated

y

y

y

2.2

 Travel Managers Associations

y

2.3

 C-level Large Companies

y

y

y

2.4

 C-level Travel Related Companies

y

y

y

2.5

 Travel Agencies Groups

y

y

y

2.6

 Travel Agencies Associations

y

2.7

 Public Administrations

y

2.8

 Journalists

y

3

 Sales & Marketing

3.1

 Account management team with consultative selling approach

y

y

3.2

 Materials to support our added value proposition

y

y

y

3.3

 PR campaign

y

3.4

 Joint initiatives with TMCs, Travel agencies, etc..

y

3.5

 Thought Leadership events

y

3.6

 Segmented Digital Media campaing focused on generating leads

y

y

3.7

 Joint initiatives with airlines, rent a cars, etc..

y

y

4

 New Products

4.1

 Customized Product using Big Data

y

y

4.2

 Bleisure offer

y

y

4.3

 Female hotels

y

y

4.4

 Social Responsability filter

y

y

4.5

 Airport WiFi

y

y

4.6

 Hotels descriptions for Millennials

y

y

4.7

 Gamification?

y

y

4.8

 Dynamic pricing?

y

y

 

In the Objectives/Strategies Matrix I have defined only three main objectives, which are applicable to all categories of partners: Get New Deals; increase Share of Wallet; and increase Brand Awareness, which do not have a direct impact in one client but affect positively the whole business.

And I have defined four main strategies: Technical integration; Personal Networking; Sales &Marketing; and New Products. Each of those strategies has been crossed with the objectives to build up an intuitive execution guide, which has to be customized to each partner.

But, as Jack Welch stated, “Execution is Everything”, so much of the success resides on counting, on time, with the right human, technical, operating and marketing resources.  In any case, the challenge is really tempting!

 

[1] The main options are as follows: US expense management company Concur; Get There, tool of US global distribution system Sabre; Rearden (US); Cytric (German), largely used in Germany and the Nordic countries; KDS (French); Amadeus E-travel Management (AETM), tool of European GDS Amadeus; Egencia’s (European) own online tool; and HRG Online (UK).