If it seems like changes in travel happen slowly and then in a landslide, it may be because these changes tend to build up gradually and even quietly. Like weather, if you know what to look for, you may see it coming long in advance, while others feel caught off guard—and even forewarning does not always guarantee avoiding last-minute scrambles, such as the industry-spanning rush to compliance prior to GDPR going into effect last May.
REAL ID in the US, with its repeatedly pushed-back deadlines, is one key current example with significant impact to travel: October 1, 2020, currently stands as the date at which all state or territory residents must present a REAL ID compliant license, or acceptable alternate form of ID such as a US passport, in order to board federally-regulated aircrafts. As a corporate travel manager, your 2019 checklist should include to make sure your corporate travelers understand what the REAL ID Act means and have their compliant ID in place before it goes into effect.
In a previous blog post, KesselRun shared a list of items businesses should review in their corporate travel program for 2019. KesselRun engages with changes and updates through our industry-wide working relationships, both with clients and with vendors, so while we work to stay informed, our role allows us to intuitively stay attuned to the travel industry’s pulse. In managing clients’ travel programs, we are also frequently on the front lines of such changes and strategizing best-practice approaches from the corporate side.
Corporate Travel Trends To Follow in 2019
Bundled Faring – NDC Content
Airlines and TMCs are beta-testing bundled fares with some corporate clients. Many questions are yet to be resolved, including:
- How can corporations report on value or savings around bundles?
- While airlines will certainly be making recommendations as to the best bundle for corporations, reviewing from their own perspective, how can corporations decide on the right bundle for their travel patterns?
- With New Distribution Capability potentially placing more decision power directly with the travelers, how do corporate travel managers make sure their travelers understand the value of bundled vs. unbundled fares and are they truly selecting the best possible fare for their trip?
Means of helping travelers make these determinations are already on their way; Dual Fare Display in Concur, which in April was auto-enabled by default for all Sabre customers who did not actively opt out, shows the two lowest bookable fares in a side-by-side comparison.
However, unless you allow basic economy fares, generally not recommended for most corporate travelers, the current dual fare functionality, which compares fare types on the same airline/flight, will have little to compare within a class bracket at this time. Having a vehicle ready for such comparisons when bundled fares are in consideration, though, and getting travelers accustomed to this comparative format, may make this a valuable option for your program. For more insight into NDC, check out KesselRun’s past overview here.
Payment Changes in Corporate Travel
The credit card industry has been making changes regarding the application of a credit card’s security code (i.e., CVV2) for selection corporate transaction, toward greater security protections and fraud avoidance. While this change does not impact the GDS, it does impact SWABIZ, used for Southwest bookings: Southwest Airlines announced in May 2019 that effective June 17, 2019, the CVV requirement will be required on SWABIZ. This mandate will not apply to any virtual card stored to a company’s SWABIZ account before that June 17 date, and stored personal credit cards, if saved in the traveler’s Rapid Rewards or SWABIZ Traveler Account, will only require CVV for the first air purchase. However, travel managers should be checking in with their TMC on planned response to ensure a smooth change.
For global programs, eyes should be on new card security measures called Strong Customer Authentication (SCA) taking effect in EEA on September 14, 2019, requiring stronger personal authentication. While virtual cards are not expected to be impacted, as different countries may interpret the upcoming standards in different ways, their immunity is not guaranteed, and for programs using plastic cards, particularly to book for multiple distinct individuals, programs should maintain awareness of this upcoming change and invest in readiness by auditing how your company pays for travel and shifting payment practices certain or likely to be impacted. Like GDPR, the full scope of SCA, and readiness for it throughout the travel and payments industries, remains to be seen.
Travel Industry Forecast & Sharing Economy Shifts
After ten years of growth, CBRE Hotel Research has predicted U.S. hotel occupancy to remain flat in 2019 and decline in 2020 and 2021. Although supply may be shifting to outpace demand, with inflation average daily rate is still projected to increase by 1.9% in the coming year, and much of this increased availability is expected due to new openings in top markets. A shift toward a gradual industry slowdown, however, does offer an opportunity for Hotel RFPs to shift in buyers’ favor, if approached correctly with your hotel partners.
The role of the sharing economy can’t be discounted in 2019, and corporate policies should look to account for this: ensuring share requirements to maintain rates are still being met with your hotel partners and on car contracts, when travelers may be opting in favor of AirBnB and Uber where allowed, has to be kept in mind. When updating corporate policy for 2019 realities, remember to be aware of security concerns: AirBnB conducts host background checks, but not all comparable providers are following such guidelines. Expedia-owned HomeAway, which is being phased out as their short-term rental brand in favor of VRBO, has historically not required background checks. Recent news stories have raised concerns about Uber, but Uber does require background checks and tracking options in Uber for Business have lead some companies to favor them over taxis from a security perspective.
Many companies currently have a policy gap in addressing use of ride-sharing and home-sharing: while not endorsed by policy, it is also not disallowed, and travelers are still being reimbursed. Whatever choice best suits your corporate culture, whether to embrace or avoid known industry disruptors and those to come, KesselRun recommends speaking to the change, rather than sidestepping it.
How KesselRun Consulting Can Help with Corporate Travel Changes
For questions on what new corporate travel best practice may be during the changes of the year or how else your company can approach the coming decade in readiness get in touch with KesselRun Consulting for corporate travel solutions.