Even though leisure travel has rapidly rebounded after the improvement of vaccine distribution, it is still the least contributing segment in the broader traveling equation. The highest value hospitality customers are business professionals with deeper loyalty to programs and services. Restoration of the corporate industry segment is still the most important priority for hospitality organizations. Companies need to think beyond the conventional approaches to offer newer value propositions to customers.
Key Insights From the Business Travel Segment
Even though the inherent value of business travel has been established, its value has been considerably impacted by the changes from the pandemic. Digital interaction tools are bridging the gap in client engagement and providing companies with viable engagement options. The shift will inevitably have a significant impact on the business travel segment as more business owners choose to replace traveling agreements with virtual engagements.
Here are some other areas that have transformed significantly within the business travel segment.
Rapid Covid Responses
The hotel industry has been highly proactive in responding to changing regulations in the Covid 19 landscape. From implementing new standard operating procedures (SOPs) to changing service segments, the industry has been at the forefront of adaptation.
Moving forward, the industry will need to continue across the same directives. Hospitality players will need to stay prepared for an unpredictable hoteling landscape centered around Covid 19 variants and changing legislative policies on a global level.
Due to the inconsistency between local policies, US hotels will need to adopt an individual evaluation methodology to ensure that active responses align with local and state guidelines aside from considering consumer concerns.
Maintaining Employee Wellbeing
Even though employee wellbeing has always remained a central facet of the hospitality sector, the current landscape requires companies to offer a supportive ecosystem for employees. Preserving employee safety, health, and mental morale are all key elements for the hospitality sector as employees feel vulnerable in this unprecedented period. With the recovery of the leisure travel segment, client-facing employees need to be provided with competitive benefits and support infrastructure to maintain positive directives.
Impacts on Business Travel in the Short Term
Business travel has significantly transformed as a result of the pandemic. Despite the opening of the economy, key changes from the pandemic are expected to remain consistent over the course of the next years. Businesses should evaluate the following impacts to ensure that they are effectively prepared for the landscape of the pandemic moving forward.
Reduced Trip Frequency with Longer Staying Duration
As a result of the quarantine requirements during the pandemic, business travelers are taking fewer trips compared to pre-pandemic numbers. However, a subsequent increase has been observed in the length of the stays post-pandemic. Sustainable traveling is becoming increasingly popular as travelers seek to drive optimal value out of their traveling experiences. Business travelers are adding additional days to their traveling steps to create impactful experiences. The output is a result of multiple journeys coming together into a single one.
Reduced Meeting Travel
The improvement in telecommunication technology and meeting applications has led to a steep decline in physical travel for meetings. Technology development is paving the way towards hybrid working environments where business professionals are refraining from traveling unless required. This shift is also actively driven by sustained concerns about pandemic variants and the spread of Omicron. Virtual applications have continued to innovate and offer a range of core features to provide a viable value proposition to users.
Reduced International Travelling
Historically, international travelers have made up a significant percentage of the hospitality customer segment. However, the pandemic has led to a massive decline in international travel. The decrease in large training events has been a core contributing factor in dictating this shift to a new dynamic. Virtual engagement options have been a key factor in bridging the international collaboration gap with an increase in webinars and virtual interaction segments across different formats.
Refining Strategies to Cater to Changes
Repurposing Spaces For Utilization – Adapting During the Pandemic
Hospitality segments need to explore a reimagined utilization of spaces to ensure that hotels are able to serve as a multi-dimensional solution for corporate clients. Hotels can provide expansive internal coverage by providing specialized value to customers. Here are a few ways hotels can achieve that.
Offering specialized digital apparatus for corporate professionals, including high-speed internet connectivity, additional hardware resources, and design restructuring to ensure that technical corporate clients can explore the optimal range of benefits from their hotel interactions.
Repurposing spaces to serve as alternative offices spaces within the hotels to cater to meetings and working requirements. The expansion of virtual working solutions is increasingly driving the push for specialized working arrangements within hotels.
Hotels need to offer extended staying options to customers by offering value-added packages for longer stays. Due to the nature of the pandemic, hotel customers often prefer to have longer stays. Hotels can become locations of value by providing an exceptional technological experience beyond what consumers can get at their home offices.
Adopting a proactive approach is central to attracting and retaining customers. Hospitality partners need to reevaluate their existing business models to expand the emphasis on customer loyalty programs and digital operating models to provide broader utility to customers. Embracing the transition to a digital environment is central for companies to reshift their focus on different service segments.
Changing With Times – DIF Perspective
Less frequent traveling and digital connectivity tools are all imminent realities in the hospitality sector. DIF anticipates the digital transition to continue its aggressive growth and take away from global business travel. Businesses can deliver an active response by devising unique value propositions and creating meaningful experiences for travelers as average stay durations increase in hotels. Leisure travel is expected to lead the path towards recovery, with business travel improvements expected to lag behind other segments.
