The Future of Business Travel
Discover what the future holds for travel and how the corporate travel stakeholder can help drive business recovery, with Paul Klimowicz, Deloitte LLP.
The Future of Business Travel
In conversation with Paul Klimowicz, Tax and Mobility Partner, Deloitte LLP
THE IMPACT OF COVID-19 ON THE BUSINESS TRAVEL COMPLIANCE SPACE
2020 HAS BEEN A VERY DIFFERENT YEAR, WHAT IMPACT HAS THERE BEEN ON THE BUSINESS TRAVEL COMPLIANCE SPACE?
"The global pandemic of COVID-19 has impacted the trajectory of business travel. Not only did it pause travel, it has re-shaped the future. Operational and travel needs are different now for businesses. Many aren’t expecting travel to go back to pre COVID-19 levels for a couple of years, but there will be business travel and it will be more complex than ever before. That of course means that careful management of the programme is a high priority for companies.
AS WE LOOK TO THE ‘NEW NORMAL’ - ARE YOU SEEING A CHANGE IN THE STRATEGIC DRIVERS FOR BUSINESSES AND WHAT IMPACT IS THAT HAVING ON TRAVEL?
The new normal has been an accelerator of many factors of business strategy but this in turn impacts on business travel needs.
There may ultimately be more business travel, driven by entry into new markets, supporting current clients, business operations and the changing shape of the workforce. This in turn is impacting who may travel, why, and where to.
We’ve seen 3 major factors; the future of work and how businesses will operate internationally, the need to demonstrate value aligned to corporate goals, and the expansion of duty of care.
There has been a shift in where people can work and how they work. The barriers of remote working have been broken and organisations are looking at how they can take work to people rather than take people to work.
This will lead to a more diverse workforce, with individuals being based in multiple locations and people travelling to collaborate, especially with clients.
THE NEED TO DEMONSTRATE VALUE
Many businesses see travel as an enabler of their recovery. Whilst reducing travel can be a cost saving, and may support with an organisations climate objectives, there is an awareness within organisations that travel is still required to deliver on strategic goals and also to connect teams with clients and their supply chains.
THE EXPANSION OF DUTY OF CARE
Until recently the focus was on enabling travel, safely and compliantly, with some focus on compliance areas such as immigration in tax and other obligations. But there is now expected to be a greater focus on these areas by authorities around the world, as well as broader factors for businesses to consider such as travel restrictions, quarantines and medical requirements. As a result we are seeing that businesses are adapting."
ARE YOU SEEING A SHIFT IN STRATEGIC DRIVERS FOR BUSINESSES AND IF SO HOW IS THAT IMPACTING THEIR APPROACH TO TRAVEL?
"We recently ran a Deloitte business travel survey and through that there were some great insights into how businesses are responding and readying themselves.
95% of respondents thought there would be additional business travel obligations when business travel resumes.
That includes health, immunity certifications and increased approval for travel, as well as additional compliance obligations such as the increasing focus of the authorities on immigration and tax.
However- only 19% of organisations think that they will be ready for these when they come into effect. What we found, was that 76% of those organisations think it will increase their focus on business travel compliance over the next 12 months.
Organisations are reviewing and re-evaluating their travel programme needs and using the current period as an opportunity to ready themselves for the new normal. They are looking to enhance their programmes, expand the client focus from knowing where people are to meeting the various and evolving compliance obligations, as well as aligning their programmes to their business strategy so as to be fit for purpose in the new world.
We’re also seeing that businesses are looking at travel more globally.
They need to know where their people are, and where they have been, and this is more important than ever.
Equally the transparency of having global travel data can also drive additional value to the business. As a result, many organizations are adapting their programme while travel is at an all-time low as it’s a much easier process from a change management perspective."
ADAPTING TO THE NEW NORMAL
HOW ARE BUSINESSES RESPONDING TO THOSE KEY AREAS OF THE CHANGING WORK PLACE, DUTY OF CARE AND THE FOCUS ON VALUE CREATION?
"There is a focus on employee engagement and on using data to maximise value by connecting processes and gaining insight from that data.
Supporting your employees in the new normal will be more important than ever and this will require great employee experience as part of the travel process, be that from the authorization, through to booking, travelling and then meeting their associated compliance obligations of travel.
For instance, one of the greatest challenges that organisations are seeing in managing business travel at the moment is around the employee engagement and having suitable data to identify travellers.
What was interesting is that 75% of the organisations that took part in our survey said that the single greatest functionality to aid business travel compliance would be to embed the business travel compliance assessment into the travel booking process – a great employee experience - this is something that we also see as key.
This ties into maximising the value of travel data. Not only can the travel data drive other processes like identifying travel compliance and regulatory items, it can also support business initiatives such as sustainability.
I recently saw that Reed & Mackay had launched a new carbon footprint offering as part of the carbon booking process, and this is exactly aligned to the point here around creating employee engagement and using that data for the best purposes possible."
the role of travel in business RECOVERY
The important contribution of business travel stakeholders
WE’RE SEEING AN INCREASE IN MEDIA COVERAGE OF LATE ON THE ROLE THAT BUSINESS TRAVEL PLAYS IN THE RECOVERY OF THE ECONOMY, COULD YOU TALK TO US ABOUT THE SPECIFIC ROLE OF BUSINESS TRAVEL STAKEHOLDERS IN BUSINESS RECOVERY OVER THE NEXT 6 TO 12 MONTHS?
"Strategically and operationally I think this will vary from business to business but I think there is a role for business travel to play in the recovery and growth strategy.
It will require a breadth of engagement within the business, not just within travel but across operations, HR, tax and other areas, to align to strategy and to deliver value so that your business can succeed.
Operationally we have seen a few common approaches in support of business recovery and as companies look to ready themselves for the new normal. For instance,
Ultimately, business travel will recover – although not to historic levels for some time.
However – I think we can also say that the working environment has changed forever.
Not only will it be a more complex environment, but who is travelling will change and their expectations will be higher than ever."