A primer on corporate travel
Corporate travel is a unique segment within the overall travel market with an estimated spend of $1.3 trillion in 2016. For many companies, the travel budget represents the third largest spend category.
On average, corporate travel accounts for approximately 12% of passenger volume – dwarfed by leisure volumes. These volumes obviously vary greatly based on airline, region, seasonality and other aspects.
However, a combination of factors including the likelihood of utilising premium travel classes, short term booking horizons, the need for greater travel flexibility and a natural tendency to peak travel times and routes means that, from
a revenue perspective, corporate travel accounts for approximately 30% of revenue.
The average revenue per booking made via indirect corporate channels is 20% higher than bookings made directly through the airline’s ecommerce site. Both passenger volumes and revenues have grown steadily over the
last five years and are forecast to continually increase over the next ten years.
Corporate travel has a considerably higher complexity than the leisure travel market. The corporate employer and their travel management company have their roles and objectives - duty of care, cost, control and compliance are all major factors in delivering a successful and satisfying corporate travel programme.
Within the corporate travel value chain, it is in everybody’s interests – the corporate, the airlines and all involved intermediaries – to deliver a corporate travel experience that works for the traveller both as
an employee and as an individual.
Regular corporate travellers are likely to be amongst the most valuable employees of a company, often representing the company and the brand externally.
Many corporate travellers are potentially the best customers of an airline, not just from their corporate spend perspective. Their personal disposable income is often high as is their propensity to travel.
This has long been recognised by airline and hotel loyalty schemes, with offers and programme benefits evolving to cater for this customer segment.