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How is the Sharing Economy affecting the corporate travel industry?

Posted by Mike Atherton on 30 September, 2015

The sharing economy boom isn’t going away anytime soon – so TMCs need to adapt.

Services such as Uber and Airbnb have taken the travel industry by storm. And it’s safe to say they have their eyes fixed on the corporate travel market.

So, looking at Uber and Airbnb as examples, why are these sharing economy services becoming so popular with businesses and what does this trend mean for TMCs?

What’s the appeal for business travellers?

The peer-to-peer models that many of these new travel apps and services implement often makes travel more affordable. Also, using these ‘cool’, rising services represents a new job perk for many business travellers. That’s because services like Uber and Airbnb are data-lead: every journey or stay is rated, prompting drivers and hosts to improve their offering and bookers to choose a service that guarantees a good experience.

Uber and Airbnb provide convenience and simplicity for business travellers.

Download our guide to developing a mobile strategy for your TMC here and plan  to exceed your travellers' mobile expectations.

What are the problems for corporations?

Travel risk management becomes complicated. Keeping business travellers safe when on the move is a key concern for employers and their TMCs; the lack of visibility of off-program travel bookings is a real headache should travellers call on their travel provider for support.

Should businesses allow the use of these travel alternatives in-policy, where there may be a perceived absence of licensing or screening, employer and executive liability becomes a board level issue.

This lack of control requires businesses to take another look at their travel policies and assess the feasibility of using Uber and Airbnb, balancing convenience and lower cost against corporate social and employee responsibility.

Will this stop wider business adoption?

In short – no. Uber and Airbnb have their sights on penetrating the corporate travel market and they’re succeeding. A recent Certify report found that Uber made up more ground transportation receipts than normal taxis in Q2, whilst Airbnb expenses through their system grew 143% from Q1 to Q2.

Businesses, led by their travellers, want to use Uber and Airbnb.

How are Uber and Airbnb serving businesses?

Uber and Airbnb are investing heavily in building their own corporate direct presence as well as using a partnering strategy to be able to distribute their services into the established distribution channels. The Uber for Business and Airbnb Business Travel services offer travel managers visibility and insight into their employee bookings via dashboards to track employee itineraries and spending, plus centralised billing and financial reporting.

How does this impact TMCs?

Uber and Airbnb are a challenge for TMCs wanting to provide a fully managed travel program. Hotels and ground transportation business models are also challenged by Airbnb and Uber, which will have a knock on impact on TMCs’ revenues. TMC supplier relationships with hotels and car-hire services could be affected by a drop in booking volumes as business travellers turn to alternatives.

What should TMCs do?

Sharing economy services simply aren’t going away. So just as Uber and Airbnb are evolving to provide better services to business travel managers, TMCs need to as well.

By focusing on what TMCs do best - managing their clients' travel budgets and providing comprehensive support to travellers, whenever they need it - agencies have the opportunity to integrate sharing services into their service model.

In the same way as NDC, social sharing in business travel is just another content source that needs to be distributed with accountability and visibility.

There will be some technical challenges to overcome, but fundamentally those clients who want to maintain accountability whilst lowering travel costs will want their TMC to embrace social sharing in their travel programs.

Developing a mobile strategy: a guide for TMCs