Business Travel Bouncing Back After Pandemic: An Opportunity For Travel Management Companies
Posted by Mike Atherton on 28 November, 2022
The pandemic put a severe dent in global business travel, with American corporate travel spending plummeting to just 10% of its pre-covid levels.
However, there are signs that the market is picking up again, with 68% of business leaders and travel managers expecting to see business travel return to pre-pandemic levels over the next two years – despite the international chaos caused by the Ukraine War. This presents a significant opportunity for travel management companies (TMCs) to capitalize on this renewed sense of long-term optimism among US and global businesses.
Why Business Travel Is Rebounding
The global business travel market is expected to reach $829.5 billion by 2027. Several factors are driving this rebound, chief among them the human need for social interaction in business transactions. Face-to-face contact is essential for personal and business relationships, and as the pandemic has shown, people will go to great lengths to maintain them.
Another key factor is the global economy and skyrocketing inflation rates. The growth of the global economy is expected to slow from 2021's 6% to 3.2% in 2022 and 2.7% in 2023. This is still growth, not recession, but the trend presents a major challenge for businesses, which must find ways to continue growing despite slower economic prospects. And business travel is essential because it helps build relationships, identify new opportunities, and gain insights into other cultures.
Why TMCs Are Needed More Than Ever
The rebound in business travel is good news for TMCs, which play an essential role in managing the complexities of corporate travel both domestically and internationally. TMCs are needed more than ever because of the increased complexity of travel around issues such as duty of care, employee health, and well-being.
Duty of care has become a significant concern for businesses in the wake of the pandemic. Employers are responsible for ensuring that their employees are safe when traveling for work, and TMCs can help them meet this duty by managing travel itineraries, booking accommodations, and providing support in an emergency.
Employee health and well-being are also major concerns for businesses. TMCs can help by managing travel itineraries to ensure that employees have enough time to rest and recover between flights and by booking accommodations that meet the needs of employees with health conditions.
Airlines also operate in a chaotic environment, with irregular schedules and cancellations. This makes it difficult for businesses to plan and book travel on their own. TMCs can use their relationships with airlines to secure the best possible rates and schedules for their clients.
Hotel rates are also high due to pent-up demand and a shortage of rooms. As a result, TMCs can leverage their buying power to negotiate discounts for their clients.
The Bottom Line
Business travel is bouncing back after the pandemic, and TMCs are needed more than ever to manage the complexities of corporate travel. TMCs can help corporates save money on travel expenses, meet their duty of care obligations, and ensure that employees are healthy and well-rested.
Without a TMC, businesses are at a disadvantage when competing in the global marketplace. They will struggle to find the best deals on travel and accommodation, and they will be less able to meet their duty of care obligations. TMCs provide a vital service, and businesses that use them will be better positioned to succeed in the post-pandemic world.
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