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What Challenges Might Affect the Business Travel Industry in 2016?

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7 December 2015 by Onyx CenterSource in Blog , Hospitality Trends & Research ,

Reports have emerged in recent weeks showing that business travel is expected to increase over the course of 2016, indicating a positive start to the year.

However, new findings released ahead of the sixth annual Business Travel Show in February reveal some of the potential challenges that the corporate travel industry may face over the next 12 months.

What is behind these challenges, and what silver linings can be found amid the clouds?

Travel Budget concerns

One-third (29 percent) of business travel buyers expect to have more money to spend on arranging corporate trips during 2016.

While this may be seen as a positive, it does mean that more than 70 percent of travel buyers could find their booking intentions adversely affected by budget restraints. Overall, five percent of respondents explicitly stated that they expect to have less money to spend on business travel this year.

Despite this, almost half (44 percent) of buyers plan to book more work-related trips over the next 12 months. In total, 19 percent of those questioned expect the number of trips they book in 2016 to drop in comparison to last year.

A positive outlook for the travel industry

When it comes to the different aspects of a trip, the outlook for the year ahead is much more positive.

The report shows that more than three-quarters (76 percent) of travel buyers think they will have the same sum, if not more, as last year to spend on airline travel, while one-third expect to have a greater amount available to spend on booking accommodation.

What’s more, statistics show that fewer buyers are booking budget hotels, indicating that more money is available to spend on luxury rooms. Overall, budget rooms account for under 25 percent of the accommodation booked by 78 percent of business travelers.

On the other hand, budget flights are increasingly popular among travel bookers, with 26 percent upping their spending on these last year, with this expected to rise to 27 percent in 2016.

What else are travellers worried about?

The Business Travel Show also questioned corporate travel bookers about their greatest concerns for 2016, providing additional insight into the challenges that may face the industry over the year ahead.

Top of the list of worries was the ability to maintain quality for customers while cutting costs, knocking last year’s number one concern of rising airline prices off the top spot.

Second on the list was increasing compliance, closely followed by GDS content. Risk management, rising hotel rates, the impact of new mobile apps and negotiating with suppliers also featured in the top ten.

Changes to Travel Management

Finally, the report looked at how travel buyers imagine the industry will change over the course of 2016, with 53 percent expecting the use of online booking to rise further, while 31 percent said they would be taking action to become increasingly compliant with the latest industry regulations.

In addition, 22 percent predicted relationships with travel management companies will change this year, nine percent expect to see increasing use of data and a further nine per cent are anticipating an improved focus on traveler wellbeing, alongside better communication between travelers and businesses.

As 2016 gets underway, the travel buying industry is facing both positives and negatives, but overcoming these challenges will be the key to success. Will this be the case this year? Only time will tell.