Companies Already Reconsidering Loosening Tightened Travel Budgets

Companies like Microsoft, Pinterest, and insurance company Anthem are putting corporate culture back on the agenda, leading to spikes in internal displacement.

And that worries some travel managers a bit: exactly how long will the boom last? And can they afford it? Travel budgets, tightened during the lull in the pandemic, are now being reassessed as leaders seek to bring teams together, in or out of the office.

“It’s the travel we’re seeing coming back now,” said Ann Kloepfer, global head of travel agency services delivery at Microsoft. “We hired 25,000 people during the pandemic, who never met their colleagues, their leaders. As soon as we announced the reopening of offices, we saw a huge increase in travel. There is a pent-up demand for in-person engagement, especially with new hires.

Alaska Airlines announced an increase in corporate bookings on Thursday. “There’s just been this material, like in a 50 point change, in booking levels for some of these big guys. [tech] guys over the past few weeks,” commercial manager Andrew Harrison said. during the airline’s first quarter earnings call. He didn’t name any names, but given the airline’s headquarters in Seattle and its hub in San Francisco, it’s likely big companies like Microsoft, as well as Amazon and Facebook.

“Book a trip like crazy”

Kloepfer was during a webinar on Tuesdayhosted by the Business Travel Rebooking and Audit Platform tripbamwho warned of rising prices in “secondary markets” outside traditional towns.

Another company, corporate gift provider Sendoso, is “booking trips like crazy.” She just opened a new office in San Francisco and seems eager to show it off. “We definitely want people in person,” said Sarah Lowery, its culture and facilities manager. “Bringing people back here, doing events…we had about 150 people in the office having a great time, happy hours, you name it, here we are. We flew people in from all states.

Organizing regular events involves transporting at least 50 people a week, if not more, to different locations, she said during a Office Hours Webinar hosted by business travel agency TripActions. He would also take them to Arizona for three days for a golf event to meet their manager for lunch, or send them to San Francisco for a week “to hang out in a Sendosa environment” – even if that meant meeting colleagues from different departments. .

Mira Rosenweig, global head of travel at Pinterest, noted that her company’s leadership is also pushing in-person meetings to boost company culture. “If you feel more connected to your business, (the hope) is that there will be less turnover,” she said. “My travel budget is higher than ever. And we have extended travel benefits such as business class clearance.

Staffing

However, some experts have expressed concerns about the new models that will emerge next.

“Are they going to want to come every month, every two months, what will that rhythm be?” said Steven Mandelbaum, Vice President, Business Solutions in Washington, D.C. Education Advisory Council at the Tripbam virtual event. “We added acquisitions that were not locally based. That’s what worries me, it’s this internal journey.

Another expert said travel for internal purposes has now taken the top spot.

“What used to be 3-4% of our traffic was conferences, seminars and education, we’re seeing this increase is the highest percentage,” added Cindy Heston, director, travel and events at Anthem.

Part of the reason was that Anthem customers didn’t want to meet in person yet. “If everything accelerates in two or a month, we don’t have the resources to support a turnover of 40% in 60 days. For internal events, we’ll probably be under 70% by the end of the year, if we continue to see this trend.

Demand for in-person events in more leisure-oriented destinations could drive up rates outside cities. “My instinct is that there are a lot of internal meetings, meeting the first time, these are secondary markets,” said Steve Reynolds, CEO and Founder of Tripbam. “They’re not going to corporate headquarters because they’re closed, so let’s go golf, let’s go to Scottsdale, let’s go to Orlando. That’s why we see rates skyrocketing in the secondary markets. »

According to reports, consultancy firm EY recently flew 2,000 employees and their attendants “for a party at a Universal Studios theme park.”

Reynolds added that hotel rates in places like downtown New York, Dallas and Chicago were still down 10 or 20 percent from 2019 levels.

A new report published by the American Hotel & Lodging Association and Kalibri Labs said business travel to New York hotels in 2022 would likely end up falling 55% from the amount spent in 2019, from $4.5 billion to $2 billion. For the Washington, DC area, it predicted a 54% decline, from $2.7 billion to $1.2 billion.

Notes

As the pandemic has spurred a new generation of travel safety and risk management apps, including Sherpa, entrepreneurs should now be turning their attention to the more delicate aspects of business travel.

Microsoft is now looking to integrate third parties into its traveler app to better serve employees. Speaking at the Tripbam webinar, Ann Kloepfer, global head of travel agency service delivery, said the company sees its employees as “athletes and artists” because they have to produce on a daily basis.

“If we haven’t learned anything else from the pandemic, that’s how important health and wellbeing is and we need to support that,” she said.

The company believes this is an untapped area and travelers now expect the tech giant to provide them with better support, especially when it comes to meal planning for restaurants, hotels or on campus.

“We’re looking at new metrics that will help us cover that because we think it’s going to be really critical, whether it’s productivity or health and wellbeing,” she said. “Business faces huge costs when you don’t support the mental and physical health and well-being of your employees.”

As hotel groups like Accor focus on lifestyle properties and dining experiences, there is potential for a new wave of apps to help bridge the gap between corporations, travel agencies and hungry travelers. themselves.

10 second catch up on business trips

Who and what Skift has covered over the past week: Accor, branded hotels, Cape Air, CventDeloitte, Delta Air Lines, CheekQatar.

In short

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FCM Moonline Deal Fuels Middle East Expansion

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