This report explores the impact of digitisation and wider travel industry change on how companies manage corporate travel in the APAC region.

For most travel managers, however, the impact of digital change is hugely positive. Employees using their mobile devices for all manner of transactions, approved or otherwise, may be disquieting to some, but the research conducted for this Economist Intelligence Unit study shows that digitisation is also bringing more standardisation as well as control and monitoring capabilities than had existed previously. It is also creating unprecedented opportunities to understand employee travel and spending behaviours and adapt travel and entertainment (T&E) conditions accordingly.

Key findings: 

Digitisation, automation and analytics are combining to give companies in the region the ability to manage staff travel much more efficiently Many firms accord employees considerable autonomy to book travel, but 40% report a significant increase in corporate travel costs as a result The biggest challenge in granting autonomy is ensuring employee safety, say 31% of survey respondents

This report is based on a survey of 210 travel managers and other senior executives in Asia Pacific, as well as in-depth interviews with travel managers and other industry experts.

The value of the data being generated is such that companies prefer to analyse it internally, rather than outsource analysis. Travel managers obtain transaction data from a wide variety of sources today, including their travel management companies (TMCs), but managers often struggle to get consolidated data from any one external partner, say interviewed executives.

Digitisation, while giving employees more options to book travel and pay expenses in different ways, is also enabling companies to make travel policy more specific and to ensure tighter compliance and cost control, the study finds. Similarly, the detailed data now available to companies enhances their ability to ensure employee safety when travelling.

The report also finds considerable innovation in payment practices in the region. E-wallets, mobile payment apps and virtual cards, for example, are coming into wider use. At the same time, T&E is becoming more tightly controlled, thanks partly to the wider use of corporate cards. At over 60% of surveyed firms, the latter is the main method used to procure airlines and hotels and pay in-travel expenses.

Report Summary

In the coming decade, airlines will have the opportunity to transform themselves from commoditised providers of transportation to full-trip coordinators that interact in an integral, more profitable way with travellers during every step of their journeys. To do so, airlines will have to improve the customer experience, revive brand loyalty and undo the effects of years of cost-cutting.

To gain greater insight into the innovations that could usher in this new era for travellers, The EIU surveyed more than 100 airline executives and 800 passengers, in addition to conducting in-depth interviews with 16 industry leaders and observers. This research series, sponsored by Sabre Airline Solutions, confirms that customers want a more personalised and satisfying experience and that airline executives want more sustainable profit margins. Fortunately, these goals can be attained together.

 

The winners will be those [airlines] that are able to provide more customer-centric and personalised service.

-Nawal Taneja, Professor emeritus at Ohio State University’s Center for Aviation Studies

 

Research methodology 

The EIU conducted parallel surveys of 100 airline executives and 810 air travel customers in August and September of 2013. Half of the executives hold C-level positions, with the rest being SVPs, VPs or directors. The regions of North America, Asia-Pacific and Europe are equally represented with 30% each, while Latin America, the Middle East and Africa make up the remaining 10% of responses.

About one-third of the companies represented in the survey report US$1bn or less in annual global revenue, while 29% boast revenue of US$5bn or more. Participants in the consumer survey were screened to include only individuals over 20 years of age who had travelled by air in the previous 12 months; the gender balance was near-equal (53% male and 47% female), with respondents spread across 18 different countries.

In an effort to better understand the issues facing airlines today, The EIU also conducted in-depth interviews with 16 industry leaders and observers. We’d like to take this opportunity to thank all those who shared their time and insights.

Simon Vincent, EMEA President of Hilton Worldwide, outlines his two Golden Rules of the Travel Tech Space Race ahead of The Economist’s Future of Travel event on March 24th.

The last time you went abroad – did you check in to your flight online?  It’s a service we take for granted to such a degree today that it barely warrants mention.  But what about your hotel?

I’ve no doubt that Michael O’Leary and Tony Tyler, my co-panellists at The Future of Travel Summit will be at pains to stress the advances in technology that aviation has made compared to us hoteliers. 

But with the lodging sector now buzzing with activity in this space I’m confident we’re going the right way about catching up.  We’ve seen all manner of gadgets hit the headlines in recent months from Google Glass concierges at The Fairmont in San Francisco, to the proposed Henn-na hotel in Japan which will be entirely staffed by robots to Hilton’s own roll out of digital check in and room selection.

The onset of this ‘travel tech space race’ raises the question of the role we want technology to play in evolving our industry.  The future of our businesses depends on us getting these choices right – following these two ‘golden rules’ of innovation:

 Create a seamless travel experience

Despite the incredible advances technology has made in opening up the globe, in many ways it has also created a world where it has never been easier not to travel.  Meetings can be skyped, presentations can become webinars and even once in a lifetime sightseeing trips can now be partially delivered from the comfort of your own home via virtual reality.  

That puts the onus firmly on us to ensure we use technology to make every aspect of the travel experience as appealing as possible.  In hotels that could mean anything from eliminating queues at check in, to customising rooms via apps, but it is a responsibility we all share through each stage of the journey.  Gone are the days when inconvenience was an acceptable by-product of necessity.

Facilitate extraordinary service

History tells us that with every technological advance, from the printing press to the production line, comes an opportunity to exploit efficiency.  Travel is no different in constantly looking to newer systems to improve our operations.

However, in doing so, we must continue to hold sacred the principle of people serving people and avoid turning a desire for convenience into a devaluation of customer service.  Digital advancements shouldn’t serve to make staff obsolete, but to free them from the shackles of paperwork to become ambassadors for the hotels and communities in which they work and live, creating memorable experiences for guests. 

I believe hotels are more than mere places of accommodation. Enriching lives through human interaction is the essence of our business, something technology should help achieve but never replace.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.