How 2020’s events are transforming the business travel sector
Global business travel is being transformed as the disruptive effects of the global pandemic.
According to Angelique Montalto, head of SAP Concur Africa, organisations are having to quickly adapt to improve their travel and expense policies to keep employees safe while also maintaining adequate liquidity. “We are seeing across our platform how organisations are taking a far more active role in terms of their travel policies, with a specific focus on meeting their duty of care obligations for traveling employees. In addition, the economic impact of this past year has brought the office of the CFO into a more active role in guiding travel and expense policy as organisations try to maintain healthy cash flow."
SAP Concur is the world’s largest travel and expense platform for businesses, processing almost 55 percent of the globe's travel and expense claims.
At a recent virtual event, two Concur partners, Uber and Flight Centre, shared insights about the impact of the pandemic on their customers and operations, and how businesses are adapting to a radically new normal.
Unprecedented impact on business travel sector
Bonnie Smith, general manager of FCM Travel Solutions South Africa, which is part of the global Flight Centre Travel Group, says she has never seen such a wide-reaching global impact on the business travel industry. “In our latest survey of more than 1,600 customers around the world, only 26 percent of businesses stated they plan to return to pre-pandemic levels of domestic travel in 2021. Half of all businesses are also making changes to their travel policies, with a strong focus on health and hygiene, and ensuring all suppliers have the necessary measures in place to reduce the risks of Covid-19.”
According to FCM Travel Solutions’ customer survey, nearly three-quarters of organisations are reviewing their hotel supply strategy. “The single biggest element is health and hygiene, which 37 percent of respondents said is their top concern,” says Smith. “Seventeen percent are also consolidating their suppliers to reduce leakage. More than half (56 percent) of organisations are also reviewing their airline supply strategies, with aspects such as touch-less check-in options topping the corporate travel wish lists."
Global research conducted by SAP Concur in July found that 97 percent of business travellers expect a ‘new normal’ for business travel even after Covid-19 related restrictions are lifted. For 45 percent of business travellers surveyed, the trip itself is perceived to be the most stressful stage of business travel, a 50 percent increase from the year before.
While South Africa has opened up its industries following the lifting of the strictest lockdown measures, many businesses are choosing not to engage in business travel. “We are seeing around half of local industries resuming business travel, but at far lower frequencies,” says Smith.
Timothy Kiluba, new models lead operations manager Sub-Saharan Africa at Uber, echoes Smith’s sentiments. “Globally we saw a drop of 80 percent in business travel via our platform this year. As a business whose core focus is on the movement of people, the lockdown has had a severe impact.”
With most workplaces shut, a ban on international travel and most countries under some form of lockdown, Uber had to adapt quickly to this year’s events. “The pandemic has forced us to think differently and innovate,” says Kiluba. “We looked beyond the movement of people to see how we can assist with also moving what is important to people.”
Uber partnered with the Bill and Melinda Gates Foundation to deliver medicine, as well as food parcels to people in need via a network of partners. “Our Uber Connect service helped people locked in their homes to send goods - books, food, care packages - to loved ones while lockdowns were in place. We have also piloted a new Uber-by-the-hour service in Tanzania to allow travellers to keep an Uber for an hour and so minimise the need to use different drivers when a trip requires multiple stops."
No more room for manual processes
Montalto says organisations that still rely on manual or semi-automated expense claim and invoice management processes will be at a significant disadvantage due to the ongoing disruption. “While we’ve seen a reduction in expense claims on our platform, the types of employee expenses are rapidly changing. Recent data suggests 72 percent of businesses using our platform are seeing changes in the types of expenses going through their systems, but only 24 percent have made any changes to their policies. This can have a seriously deleterious effect on an organisation’s cash flow and liquidity.”
With many employees working from home or even a hybrid remote office, expenses such as office furniture, connectivity and equipment have increased significantly. “Many people had no home office when the first lockdowns were announced, and employees have subsequently had to purchase desks, chairs, and additional data to ensure they can remain productive while away from the office,” explains Montalto. “As a business, if you’re still relying on a manual or semi-automated process to manage expense claims, the surge in new expenses would have been nearly impossible to manage and the opportunity for non-compliance rampant.”
Montalto advises that organisations automate their employee spend and invoice management processes. “By using a central platform, companies can update and dynamically enforce their policies remotely, and ensure all incoming claims and invoices are aligned to policy. Organisations are seeking greater control over all of their spend during the unpredictable and difficult period ahead. We expect to see a much closer working relationship between HR and the office of the CFO to ensure travel and employee expenses support the financial health of the organisation.”