With business trips all but wiped from corporate expense reports, corporate business travel industry stakeholders have been thrust into an unprecedented scenario. Uncertainty is at an all-time high, but what is clear is that business travel management FinTechs aren’t sitting idly.
Rather, many have shifted gears into supporting corporate customers as they struggle through the market volatility, too. At the same time, FinTechs and service providers are exploring how to prepare for several potential outcomes for the market, each with major ramifications on their own business models and revenue streams.
There are positive signs that the corporate travel sector is beginning to recover.
Michael Wirth, Senior Director, Global Payments at corporate travel management firm CWT, pointed to Global Business Travel Association (GBTA) data released in April showcasing just how dramatic the decline in corporate travel had become: according to its research, the industry was at a “standstill” with 98 percent of GBTA member corporates canceling and suspending international travel.
One month later, however, GBTA found that the majority of survey respondents had begun to consider resuming business trips.
“Certainly, lower travel volume has been the biggest impact of the pandemic in our industry, with stay-at-home restrictions requiring companies to hold more virtual meetings,” Wirth told PYMNTS in a recent interview. “But with the revival of business activity, easing of travel restrictions, relatively lower travel costs and curbed demand after teleconferencing, these combined are encouraging signs for our industry.”
Continuing Innovation
With a cautiously optimistic outlook, corporate travel technology firms continue to press forward to introduce new tools for businesses in preparation for returning T&E spend.
For CWT, that means a recently-announced partnership with corporate travel expense management FinTech SAP Concur. CWT’s travel management platform is now integrated with Concur Travel, meaning corporate users of Concur Travel can choose CWT’s RoomIt hotel booking solution from directly within the portal.
Wirth noted that the integration will support businesses’ travel booking needs as business trip volume gradually returns. But that doesn’t mean it’s business as usual for corporates that continue to face disruption today, and may not return to normal travel habits in the future.
It’s unclear, for example, whether businesses that are learning the value of virtual calls and teleconferencing will view physical travel as the same value-add they once did. But beyond uncertainty over business travel activity volume, Wirth said corporates are already faced with changes to their business travel operations, particularly when it comes to payments.
He pointed to the continued uncertainty over border closures, canceled flights and bankrupt airlines as one factor driving adoption of corporate cards for business travel booking.
“In terms of default risks that a corporate is exposed to when, for example, an airline goes bankrupt, the only certain way to get refunds on flights not flown is when they were paid by credit card,” he explained. If paid via other methods, like Billing and Settlement Services [BSP], a full refund would be all but a pipe dream. “This might drive further adoption of card payments” as business trips resume, he added, noting that the collaboration with Concur Travel also aimed to promote a seamless digital payments experience as businesses more closely consider how they pay for travel.
Navigating The Future
Though the data may be promising, there is no guarantee of what the corporate travel arena will look like in the months — and even years — ahead. It’s likely that domestic travel volumes will recover more quickly than international.
Wirth also emphasized that each corporate will have to make its own decisions about if and when it is appropriate and safe to resume business trips. Yet he remained optimistic about the future of the business travel landscape, and as companies ease back into a new normal, they’ll need FinTechs and service providers able to offer agile, flexible tools that meet unique and changing needs.
“A complete grounding of travel globally for this amount of time is like nothing we’ve ever seen before, so in terms of long-term impact, there is no blueprint,” he said. “Historically, however, business travel is one of the first industries to recover from global interruptions.”