Have we seen the end of luxury business travel?
The doom and gloom surrounding business and the economy might be a fixture for the next decade, we’re being warned. But for brands in the travel sector has the recession fundamentally changed our customers and how we talk to them? Is the austerity principle here to stay? Clarendon suggests that the rules we’ve learnt over the past five years are part and parcel of business travel now.
We’ve tightened belts. We are working with smaller budgets. We’ve fundamentally changed how we talk to and work with brands. After all this austerity we had hoped that perhaps there was a little sunshine around the corner. Perhaps not. Two influential think tanks have both published reports this month claiming the austerity measures that are part of our lives now might still be here in 2020.
The budget deficit target is still a long way off. There has been a reduction in government spending with another one on the way. We might have to pay more in tax and wages aren’t feeling like they’re increasing.
In essence, doom and gloom isn’t going anywhere.
Is this necessarily a bad thing? Yes, we would all like more money but the fundamental rules and ways we have structured the way we do business throughout austerity will be hard to undo. In business travel, in particular what firms are looking for, the brands they do business with and the places they stay have changed. Will it be so easy for them to go back to the way it was before?
Could business travel companies turn back the clock, and would they want to? In 2009, at the height of the recession, the Economic Intelligence Unit at The Economist asked business travellers how the downturn was affecting their approach. It may be four years ago but the answers and concerns they gave are similar to the ones being dealt with in the corporate travel industry right now. Brands working in the sector have responded to those concerns and have shifted their business approach and the services they offer to suit this trend.
In 2009 the Amadeus report said the business traveller cared less about luxury. They wanted the basics and they wanted them done well. By 2013 the decrease in the number of corporate stays in hotels and the rise of the serviced apartment for longer term stays has been evident, suggesting this isn’t a trend that has gone away. The corporate traveller now looks for an apartment with mod cons, a fully fitted kitchen as well as connectivity like Wi-Fi and entertainment like Freeview that meets their desire for functionality as well as being cost-effective.
Corporate travellers told the study they were more likely to be working within a budget. They looked not only for the best deals they could but also how they could reduce expenses during their stay. So staying in a serviced apartment meant they could prepare their own meals. A central location close to transport links cut down on travel costs and expenses, reducing the price tag attached to their trip or relocation.
Trust and building relationships was also important in the research. Business travellers wanted to see more from brands expecting to see evidence that they understood their concerns and responded accordingly. Technology like social media and smartphones plays a huge role in this. Clarendon Serviced Apartment launched a mobile app this year helping corporate travellers find out more about the location they are staying in, like attractions and places to see nearby. It is a focus on customer intimacy, on building that foundation of trust that comes from knowledge and understanding.
The report concluded that “austerity might be here to stay”. If businesses have realised they can develop relationships with brands in the corporate travel sector that are better suited to their needs, combine function and comfort at a reduced cost then it will be difficult to go backwards to the way it was before austerity. Companies within the sector have responded to this shift in kind, with a greater focus on service, convenience and value for money. In a decade budgets might increase but the way businesses travel, and the way providers have responded and offer their services might have changed for good.