Tuesday, 12 December 2017

BUYERS HEAD INTO THE NEW YEAR FACING CONTINUED PRESSURE TO CUT COSTS FOR THE THIRD YEAR RUNNING

As we head into another new year, corporate travel buyers are, once again, facing the pressure to cut costs and maintain quality. Oh yes, it's that time again, when the Business Travel Show buyer survey flags up the pain points for buyers in the next 12 months. 
Business Travel Show event director David Chapple 

The poll of 243 business travel buyers asked, What is the biggest issue facing you over the next 12 months?” Cutting costs reigns top of the list for the third consecutive year, followed by an increased focus on duty of care for the second time in a row.

In third place (up five from last year) is rising hotel rates and, more specifically, availability. Rising airfares is at number six, a drop of three positions. Brexit – a new entry on the table in 2017 – features again in fourth place. Enforcing compliance continues to freefall down the table, from second place in 2016, to fifth last year and seventh for 2018. Unsurprisingly, GDPR – which comes into force next May – features on the list for the first time in tenth place.

It’s not surprising to see cost cutting and duty of care as the top two challenges facing buyers over the next 12 months, especially given the recent spate of terrorist attacks across Europe and further afield; it’s simply not an opportunity for buyers to ignore traveller risk anymore, it must be a priority for them, their organisations and their partners.

Buyers have been so vocal about the debate around hotel availability this year that it was also not unexpected to see the issue around hotel rates rate so highly. But I was a little surprised to see Brexit so high on the table, given that many people feel the initial instability it caused for corporate travel was short-lived and the after effects will remain somewhat of an unknown until March 2019 at the earliest.


Additionally, when asked the follow up question, “What will the biggest change in the way you buy/manage travel in the next 12 months be?” buyers responded as follows.

1.     No change   
2.     Increased use of technology                  
3.     Change TMC                 
4.     Increased online bookings
5.     Increased compliance
6.     Brexit
7.     Pressure to reduce costs        
8.     Engage a TMC
9.     Direct bookings
10.  Consolidate suppliers
11.  Value for money
12.  Find a new travel and expense tool
13.  Increased focus on safety
14.  Reduce travel
15.  Managing with a reduced budget



The Business Travel Show is the leading event in Europe for corporate travel professionals, taking place 21-22 February 2018 at Olympia London. Buyers can register for a free visitor pass at www.businesstravelshow.com/register

Buyers with a minimum annual spend of £1 million can also apply to attend as a hosted buyer at http://www.businesstravelshow.com/hosted-buyers.




Thursday, 7 December 2017

ONE IN FIVE BUYERS INCREASED SERVICED APARTMENT USE IN 2017


The serviced apartment industry has gone from strength to strength in recent years for a whole host of reasons: its trade ASAP has done sterling work in raising the profile of the sector among business travel buyers and worked hard to introduce a recognised quality and standards charters, travellers are more open to use hotel alternatives thanks to the rise and rise of Airbnb in the leisure sector, and tightened budgets are thankful for a budget-friendly option. 

According to Business Travel Show's recent survey, their use among 20 per cent of business travel buyers increased again in the last 12 months alone. A similar number of buyers directed more spend to budget hotels and over a third (37 per cent) to mid-range hotels. Contrastingly, 28 per cent used five star hotels less compared to just 12 per cent on serviced apartments.

Q1. When compared to the last 12 months, how has your use of the following suppliers changed?

More



Same

Less

Don’t use


2017
2016
2015
2014
2017
2016
2017
2016
2017
2016
Five star hotels
13



31
41
28

28

Sharing economy
18



36

8

38
91
Serviced apartments
20
39
19
13
25
75
12
4
42
4
Mid-range hotels
37

87

47

9

7

Budget hotels
22
17
60

37
77
8
1
32
0

When asked why they book serviced apartments, 57 per cent of respondents said it was because they provide value for money. This was followed by convenience, flexibility, extra space and long-term suitability. While the top five reasons remained the same as last year, their order has changed, with convenience falling from the number one spot.

Q2. Why do you book serviced apartments?


2017
2016
1
Better value for money
Convenience of self-catering option
2
Convenience of self-catering option
Better value for money
3
Flexibility to experience the location like a local resident
More space

4
More space

The flexibility serviced apartments allow for experiencing the location like a local resident
5
Long term suitability
Long term suitability

Of those buyers who do incorporate serviced apartments in their programmes, more are allocating a higher percentage of their budget towards them, corroborating the above statistics (see below). For example, in 2016, 7 per cent of buyers spent between 11 and 25 per cent of their budgets on serviced accommodation. This year, that rose to 13 per cent, while the number of buyers spending between 26 and 50 per cent remained consistent. 

Q3. What percentage of your accommodation budget is spent on serviced apartments? (Answered only by those buyers who use them).

%
2017
2016
Less than 10
84
90
11-25
13
7
26-50
3
3

With 42 per cent of buyers not using any serviced accommodation suppliers, however, and 38 per cent still vetoing sharing economy providers (albeit a massive drop from 91 per cent last year), the poll of 243 buyers show there is still a way to go for alternative accommodation providers to be an automatic choice for travel buyers.

David Chapple, event director, Business Travel Show, said: “Our research is great news for the serviced apartment community and is testament to the work ASAP has done in raising awareness of, and building trust in, the industry and its suppliers.

“It’s also an honest reflection of the state of the market. For the last two years, our annual survey of travel buyers has shown that the number one challenge facing them is cutting costs while maintaining quality and value for money. With this in mind, it’s no surprise that more buyers are looking to alternative and budget accommodation providers and incorporating these in their travel programmes alongside more traditional four and five-star business hotels.

“Of course, the demographic of travellers is also changing with younger executives enjoying the flexibility and convenience offered by alternative accommodation – something they have become used to as leisure travellers. We have understood and – to a degree – preempted this shift at the Business Travel Show, and accommodation providers from all sides of the market can be found on the show floor for buyers to talk to, including Melia, IHG, Best Western, Airbnb, NH Hotels, Premier Inn and the serviced apartment providers in the ASAP Hub.” 

James Foice, chief executive of the Association of Serviced Apartment Providers, added: “Its absolutely fantastic to see that 20%, or 1 in 5, of corporate buyers have increased their use of serviced apartments this year. The popularity of our serviced apartment product has never been higher with the significant increase in supply this yearmore than 2,000 new serviced apartment units have opened right across the UK in 2017. 17% growth in supply is forecast by 2020 so this trend is all set to continue. More corporate and leisure travellers prefer this more flexible way to stay offering a bit more space to live, work, sleep and eat.

“Its particularly interesting to seevalue for money coming out as the top reason why corporates are using serviced apartments. We find more and more companies book two-bedroom/two-bathroom apartments and colleagues will share the apartment, making it a more cost-effective choice as well as giving employees working away from home some companionship

“Our ASAP Quality Accreditation Programme - under which operators are assessed by the Associations accreditation service, ISAAP, to ensure they fulfil all their duty of care, compliance and health and safety requirementsis also proving to be a very important additional benefit to corporates.

Buyers will find the ASAP Hub at the BusinessTravel Show, including Acomodeo, BBF, City Apartments, Fountain Court Apartments, Frasers Hospitality, Marlin Apartments, The Harrington Collection, Roomspace and StayCity. Other serviced apartment providers at the show include Go Native, The Serviced Apartment Company, BridgeStreet Global Hospitality, Pine UK Holdings, DBA and Oakwood Worldwide.

Click the link to continue your free registration to the Business Travel Show, which takes place at Olympia London from 21-22 February 2018.