Seven Takwaways from the GTMC Conference
In May our Head of Online Development Tom Kingston attended the Guild of Travel Management Companies’ (GTMC) annual conference on the beautiful Marriott Marco Island resort in Florida.
Over 150 delegates came together for the two day event to discuss the evolving business travel landscape and address some of the many challenges the industry faces in the future.
As well as the GTMC’s core audience of travel management company members, in attendance were key suppliers from airlines, GDS, hotels, rail, ground transport and technology companies.
Speakers at the event covered an impressively broad range of topics, from Brexit, to the impact of global terrorism, to the sharing economy and emerging technology.
Those speaking included Times columnist Tim Montgomerie, Gerard Lyons the Former Economic Advisor to Boris Johnson, Andy Blackwell, Principal at travel security firm Blackwell Security and Stephen D’Alfonso, ABTA’s Director of Public Affairs.
Here’s a round-up of some of the key things we took away from the conference.
Business travel is increasing steadily since the 2008 crash
Despite economic uncertainty still being very much prevalent and exacerbated in the wake of Brexit, business travel is still gradually increasing after the 2008 recession, which is heartening news.
We’ve witnessed this trend firsthand here at CTM, where we have almost seen a return to pre-2008 levels of travel among SME clients, with larger companies still increasing their travel, but at a slower rate.
Each business trip overseas results in an average GDP contribution of £34,000
Measuring the return from your business travel spend is always a pressing issue of course, and even more so in times of financial uncertainty, so this metric calculated by the GTMC is especially useful. This article in Real Business magazine explores the report’s findings in full.
Using CTM’s own data, we’ve worked out that the average short haul business trip costs our clients £778, while a long haul international trip costs £1673.
For short haul trips, this gives an ROI of over 4000%, and nearly 2000% for long-haul travel. A pretty reassuring figure we hope you agree.
58% of business travellers have been offered a corporate discount
Despite the large amount of accommodation booked by TMCs, research by Audience Net tells us that only 58% have been offered a corporate rate, which surprised us.
For those travellers who regularly visit the same properties, chains or destinations for business, these savings can quickly add up to a considerable sum. This clearly highlights the value a travel agent brings, thanks to their superior negotiating power used to secure these discounts.
Divided view on Brexit
According to polls conducted at the GTMC Conference, opinion weas very divided on whether Britain’s departure from the EU is good news for the travel industry. Delegates were split nearly 50.50 on the issue.
What’s interesting here was how opinions shifted throughout the event. At the beginning of the conference the majority of GTMC members and suppliers were in favour of remaining in the EU, or were uncertain about it.
Following presentations and panel debates by the likes of Gerard Lyons and Tim Montgomerie, a vision for a UK outside of the EU won over some delegates.
Concerns about over-regulation, runway capacity, globalisation, and the power of emerging world economies were all voiced as some of the key points that seemed to influence opinion.
Hotels are now competing with Online Travel Agents
We all know that the steady rise and prevalence of online travel agents such as Expedia and booking.com in recent years has chipped away at hotels’ margins and upset the traditional Global Distribution Channel model.
But hotels are now fighting back, with large brands like Marriott and Premier Inn offering perks like free WiFi to entice customers when booking directly with their properties. We’re also seeing an increasing number of smaller hotels changing their approach, selling their rooms through Airbnb-style websites.
The message we received was that travel agents and online travel retailers need to be able to adapt and work directly with these chains, similar to what is happening with airlines and IATA’s New Distribution Capacity.
Air connectivity directly boosts trade
Here’s another validating stat. Unsurprisingly perhaps, building more and better flight connections results in more business being done. Just one percent increase in air connectivity was found to result in an increase in total trade of around 0.10 percent.* To give a sense of scale, for the UK, this equates to an increase of around £600 million.
There was lively debate concerning the ongoing Heathrow vs Gatwick expansion decision and its impact on potential GDP growth. Since then of course we’ve heard that London City Airport is being expanded, with £344 million investment plan increasing capacity to run an additional 32,000 flights by 2025.
Millennials are more likely to switch brands
Understanding and embracing the millennial travel market is a hot topic, so we were interested to hear about this telling indicator. According to research conducted by Emory University Atlanta GA, some 91% of millennials would switch brands if they experience disappointing customer service.
Younger travellers expect better value and service, and generally show less brand loyalty and affinity than older generations of travellers. Obviously this has ramifications for business travel providers, since it means that millennials are less likely to join airline and other loyalty programmes, or are less likely to pay more for an airfare simply to accumulate more loyalty points.
So those were our key business travel takeaways from the 2016 GTMC conference. What were yours?
* “The Value of International Business Travel” 2016 ,p.11 ; Poole, Jennifer. "Business travel as an input to international trade." UC Santa Cruz, mimeo (2010)
All Conf Images by: Kit Fanner at On Location Events