The sharing economy boom isn’t going away anytime soon. Corporates and TMCs need to adapt. Services such as Uber and Airbnb have taken the travel industry by storm. It’s safe to say they have their eyes fixed on the corporate travel market. So, taking that duo as an example, why are such services becoming so popular with businesses and what does this trend mean for the business traveller, corporates and TMCs?
What’s the appeal for business travellers?
The peer-to-peer models that many of these new travel services implement often, but not always, make travel more affordable. Also, using these cool, new platforms represents is seen as a perk for many business travellers. That’s because services like Uber and Airbnb are data-lead: every journey or stay is rated, prompting drivers and hosts to improve their offering and bookers to choose a service that guarantees a good experience. Uber and Airbnb provide convenience, immediacy and simplicity for business travellers.
What are the problems for corporations?
Duty of care and risk management becomes complicated. Keeping business travellers safe when on the move is a key concern for employers and their TMCs; the lack of visibility of off-programme travel bookings is a real headache should travellers call on their travel provider for support. Should businesses allow the use of these travel alternatives in-policy, where there may be a perceived absence of licensing or screening, employer and executive liability becomes a board level issue. This lack of control requires businesses to take another look at their travel policies and assess the feasibility of using a peer-to-peer service, balancing convenience and lower cost against corporate social and employee responsibility.
Will this stop wider business adoption?
In short: no. Uber and Airbnb have their sights on penetrating the corporate travel market and they’re succeeding. A recent Certify report found that Uber made up more ground transportation receipts than normal taxis in Q2, whilst Airbnb expenses through their system grew 143% from Q1 to Q2. Businesses, led by their travellers, want to use Uber and Airbnb.
How are Uber and Airbnb serving businesses?
Uber and Airbnb are investing heavily in building their own corporate direct presence as well as using a partnering strategy to be able to distribute services into the established distribution channels. The Uber for Business and Airbnb Business Travel services offer travel managers visibility and insight into their employee bookings via dashboards to track employee itineraries and spending, plus centralised billing and financial reporting.
How does this impact TMCs?
Uber and Airbnb are a challenge for TMCs wanting to provide a fully managed travel programme. Hotels and ground transportation business models are also challenged by Airbnb and Uber, which will have a knock on impact on TMCs’ revenues. A drop in booking volumes as business travellers turn to alternatives could affect TMCs’ relationships with hotels and car-hire firms.
What should TMCs do?
Sharing economy services simply aren’t going away. So just as Uber and Airbnb are evolving to provide better services to business travel managers, TMCs need to as well. By focusing on what TMCs’ do best managing their clients’ travel budgets and providing comprehensive support to travellers, whenever they need it¾agencies have the opportunity to integrate sharing services into their service model. Like NDC, social sharing in business travel is just another content source that needs to be distributed with accountability and visibility. There will be some technical challenges to overcome, but fundamentally those clients who want to maintain accountability whilst lowering travel costs will want their TMC to embrace social sharing in their travel programs.