Put on the back burner during the covid, business travel has returned to near pre-pandemic levels. So business travel makes real economic sense for companies, as the latest American Express study shows.
Arnaud Bernet - Business travel has long been regarded as a cost centre. Through this study (*), we have sought to understand the perception of company directors, from the smallest to the largest, on this subject which is often viewed from a budgetary angle. However, beyond the cost, it is clear that companies don't spend this money for nothing. The reason why 93% of them travel on business is that it makes economic sense. Two-thirds of the managers surveyed believe that travel helps them to increase their turnover. For 56% of them, it would be impossible for their company to grow without business travel.
Habits have changed with the pandemic. However, the virtual world has not really taken the place of physical encounters.
A. B. - What the study highlights is that business travel has evolved over the last five years, a perception shared by 55% of executives. The virtual dimension is certainly increasingly important, but it has not replaced business travel, whether local, national or international, in terms of a real economic dimension. Today, 70% of managers prefer face-to-face meetings, whether for build customer loyalty 60% of them for team building and training. Virtual meetings are not a substitute for face-to-face meetings; the two complement each other.
Is the need to travel the same, depending on the size of the company?
A. B. - When we talk about business travel, we often think of large companies or SMEs. But this study questioned all types of company with 10 or more employees. Whatever their size, and all have a shared perception of the importance of business travel for their commercial and economic development. In companies with 500 or more employees, 79% of employees make business trips, while this figure rises to 82% for companies with 50 to 99 employees. For companies with fewer than 20 employees, the figure is 63%. The percentages may vary slightly, but this willingness to travel is widespread across all companies.
Do large and small companies travel internationally in the same way?
A. B. - In large companies, a third of journeys are made internationally, mainly in Europe (84% of journeys), but also in Asia (29%) and South America (16%). For companies with between 50 and 99 employees, although international travel only amounted to 12%, there was a significant increase in the number of trips to the following countries a wide range of geographical areas visited. Europe remains in the lead, with 68% of trips, ahead of Asia (32%), North America (21%), Africa (14%) and South America (14%).
What are the current constraints on business travel?
A. B. - More than constraints, two challenges are mentioned by business leaders. The first is obviously the economic dimension. The return on investment of business travel is closely scrutinised. Budgetary control is a key factorCost management was the main challenge for 35% of the managers surveyed. The second challenge is obviously CSR. In this context, 26% of managers said that they were more respectful of the environment when organising travel than before.
How can we meet these challenges?
A. B. - The first idea is greater automation of processes, for better visibility and control. In this respect, large companies are often better equipped than smaller ones due to the cost of the various tools. 54% of companies with more than 500 employees have a booking tool and 68% have an expense report tool, while 53% rely on a travel agency for their travel needs. If we think about travel from start to finish, it starts with a booking and ends with a payment. Having tools for booking and managing expense reports, and being supported by a travel agency, improves visibility and control over expenditure.
How can payment solutions help business travellers keep their budgets under control?
A. B. - This is the final building block. Setting up a single means of payment throughout the company - a centrally housed card or corporate cards distributed to travellers - gives the company and travel managers access to data relating to their employees' travel. And, thanks to this visibility, to find sources of savings. For example, American Express provides its corporate customers with benchmark data on their purchasing performance. They can find out whether they have a better or worse fare than their peers on a flight from Paris to New York.
This visibility applies not only to the travel budget, but also to the carbon footprint.
A. B. - Exactly. The source of the information is identical. By capturing all the expenditure incurred by our employees, we are also able to understand the carbon footprint of the journeys made by the company, thanks to our automated dashboards which are based on calculation methodologies recognised in the airline and hotel industries. Hence our ability to calculate CO2 a flight or a stay according to travel class or hotel category. This gives the travel manager direct visibility of the carbon footprint of the trip. To take things a step further, we have a consulting service that makes recommendations for reducing the carbon footprint of business travel.
The American Express study covers all sizes of company. But are your products accessible to all?
A. B. - American Express supports all types of business, from very small businesses to CAC 40 companies, from dentists using a business card to multinationals using our various payment solutions. To all these companies, the primary value that American Express brings is above all a better cash managementwith payment terms offered by our centralised or individual solutions.
The business travel ecosystem is constantly evolving, with new entrants and new needs. How do your solutions fit into this landscape?
A. B. - One of the other pillars of our value proposition is our ability to interoperate with all the players in the travel chain: booking and expense management tools, agencies, hotel reservation specialists. As each customer calls on different suppliersOur day-to-day challenge is to meet their needs, whatever suppliers they use. We have a team dedicated to ensuring that data and information flows are perfectly connected with all these other players, in compliance with cybercrime and fraud standards. We constantly monitor the market to keep abreast of all these new players.
Has the scope of your solutions changed recently?
A. B. - Without talking about new products, we are constantly developing one of our flagship products, the lodged card, pioneered over twenty years ago. It works very well in the air and rail sectors, and we are developing it further. more and more in the hotel industry. It's a special, more fragmented world, with a large number of players. For the past three years, we have been able to offer a packaged card that works with the hotel industry on a day-to-day basis, working with a third party that serves as our direct connection with groups and independents. This is in addition to the links we have with the main players in hotel reservations.
Companies are also looking for greater visibility on their MICE spending. Is this a sector you're looking at?
A. B. - MICE is a major growth area. And since last year, the subject has been back at the heart of discussions within companies, which are still looking for their teams to get together, to build cohesion, team spirit and corporate culture. In this area too, we can bring value to our customersWith the ability to pay suppliers, companies have complete visibility of their MICE expenditure. Depending on the suppliers, this can be done via an individual card or via a centralised tool such as our hosted card, with the major MICE players accepting it as a means of payment.
(*) A survey conducted online with viavoice from 27 May to 14 June 2024 among a representative sample of 500 managers of companies with 10 or more employees in France.
