Companies still snubbing Airbnbs for business travel: new research from Deloitte

A new report from Deloitte has highlighted a lack of corporate appetite for alternative hosting, despite its popularity during the pandemic.

It appears that the phenomenon was only a short-lived affair, as only 9% of companies surveyed had non-hotel accommodations in their corporate booking tools.

“For leisure travelers, the adoption of non-hotel accommodations has increased. More and more people are getting used to it, they like it. said Mike Daher, head of transportation, hospitality and services at Deloitte “For business travel, it’s different.”

There’s the usual issue around booking tool connectivity and risk factors, but perhaps more importantly, employees risk missing out on loyalty points that could be allocated to their next vacation.

“When people go on a business trip, yes, it can be fun and exciting, and there’s a team dinner in the evening, but at the same time people see it as a cost to their personal lives,” Daher added. “I’m away from my family, my dog ​​or my home, so I want points, and I want to use those points for my pleasure trips. It’s a way to get paid for personal time, and points are an important part of choice for business travelers.

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

And, according to its new report, “Reshaping the Landscape: Corporate Travel in 2022 and Beyond,” released Monday, about half (49%) of companies are not reimbursing employees for non-hotel accommodations.

People value their status in these programs, he added, and that is part of why Selina recently launched its own loyalty program.

Irrational behavior

Daher, who oversees a team of 4,100 at Deloitte, also warned travel managers to prepare for volatility as inflation sets in, in addition to “irrational” pricing from suppliers.

He said the cost of transatlantic flights in particular was likely to catch up with them. “I don’t think most companies have been budgeting inflationary prices for travel right now,” Daher said. “Many of them are a bit surprised that airlines and hotels in certain markets are charging such a premium at pre-pandemic levels.”

As jet fuel prices in North America have risen more than 30% in the past month, Daher, who took office last October, pointed out that many airlines and hotels will now seek to recoup their losses at as demand returns.

“There are also irrational behaviors,” he added. “Like, we have to make up for lost time, we’re going to keep raising the price because people are willing to pay for it. European American routes in particular are going to be very expensive.

A false start

The new report also reveals how far from the truth travel managers were when predicting a return to pre-pandemic volumes.

It revealed that a third (34%) of business travel managers surveyed in June 2021 expected to reach half of their travel spend in 2019 by the end of 2021. But only 8% reached this step. “Business travel will see a steady, but not dramatic, increase this year,” the report said.

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

The figure doesn’t quite match recent data shared by American Express Global Business Travel at its Investor Day last week, which pointed to an 80-100% recovery by the end of 2023, based on the findings. from Fitch and the US Travel Association.

The Deloitte survey also finds that 17% of travel managers expect a full recovery by the end of 2022, down significantly from the 54% who expected the same last summer.

His June 2021 poll coincided with renewed optimism due to the rollout of vaccines. “People believed in it a lot and were excited to go back (to travel). That turned out not to be the case, especially with Delta,” added Daher, who this time urged travel managers to define clearly what makes a “great value” trip. And in the face of rising costs, longer routes due to the closure of Russian airspace and staff shortages, they must consider contingency plans if costs increase even further.

“All of these factors may change over the next six months,” he said. “But the thing is, pre-pandemic business travel managers used to budget every year, little adjustments here and there. We’re in a much more volatile time right now.

Conferences are back

Despite Covid concerns and rising costs, Daher expects an increase in large corporate conferences. Companies will think about how to have the maximum impact, so events where a CEO can show up and inspire their staff can be popular throughout the year.

“I always see business travel as a return on investment. Every dollar a company spends, the equation changes,” he said. “The value side has changed in terms of, what are the high-value trips these days? It’s culture building, training, critical sales meetings, building customer relationships.”

And we should not rule out a decline in international travel, especially between the United States and Europe. “Most international travel was by definition high value because it was much more scrutinized by companies,” he added. “If you were going from London to Miami for a conference, you probably asked your boss to approve the trip. I’m optimistic.

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