Travel and Expense Management Trends 202012 May, 2020 6:30 am
COVID 19 is unprecedented. All forecasts prior to it happening are off the table.
1. Prior to January 2020, the forecast for T & E expenditure was:
The forecast was that the Travel and Expense expenditure (T&E) would comprise of 10% to 12% of a company’s budget. According to the Global Business Travel Association, business travel spending is growing globally – is expected to grow to $1.6 trillion in annual spend by 2020 – major components being air travel, hotels and entertainment. It has been predicted that the travel and expense management software market is likely to reach the mark of $ 2.85 billion by the year 2024.
2. Forecast now:
a. All bets are off !
b. The traditional markets for T&E were large companies. These will see the largest dent in their T & E expenditure. There focus on “Work from Home” (WFH), will force employees to use technology. Thus, reducing travel. That said, there will be more local travel, where people will prefer to use their own vehicles v/s public transport or air travel. Because of local travel, even hotels will suffer.
c. However, this opens the door to new opportunities in the small companies, who employ 5 to 10 people, and of whom 2 to 3 travel. These smaller companies never saw the value in automation. Today, they will be forced to look at systems which help them rapidly get away from paper. The risk their employees see is contracting COVID 19, because they have no idea where all the paper may have travelled from. Digitisation will be the future.
3. What does the customer demand today ?
a. The business traveller has demanded efficiency. This will still be the case. However, now they will focus greatly on sanitation.
b. Whilst air travel and hotels bookings will reduce, so will the need to make self-service bookings also take a hit. Companies will prefer to work with Travel Management Companies (TMC), because it gives them great flexibility when emergencies arise. Travellers will want to be able to talk to someone at the end of the line, who can solve problems.
c. The Finance team would look for savings both in terms of the cost of the tools, but also in terms of visibility on areas where they could make a saving.
4. A Comparison of the forecast BEFORE & AFTER COVID:
Businesses were focused on the following to extract value from their travel budgets.
5. The New Customer in the market:
a. Most smaller companies never saw value in automation, and instead saw it as an unnecessary expense. However, in the post COVID “new normal”, social distancing will become a byword, and people will use technologies which reduce “social contact” and give credence to “social distancing”.
6. ExpenseOnDemand’s offer:
a. We at ExpenseOnDemand have prepared to alleviate this problem for SMEs, by offering a low cost / high value add expense automation application for £1 or at Purchasing Power Parity, to SMEs. This will allow employees to maintain social distancing by submitting and approving expenses on the mobile. This will address the need is to capture, submit and reimburse an expense.
b. Overtime, as certainty becomes a norm, and life gets easier with better controls on COVID 19 and other such viruses, businesses will grow. ExpenseOnDemand is well-positioned to provide value through its menu-based offering. Here businesses can add advanced functions that they require. SMEs will pay only for functions they require, thus reducing costs further. Furthermore, they will also be offered the choice to pay based on per person or per transaction. This is ultimate in transparency!
Summary of Travel trends in 2020 and into the foreseeable future will change due to COVID-19.
1. There will be more domestic travel, and international travel will reduce considerably
2. People will travel but the number of visits per person will reduce
3. Companies will prefer to employee in the vicinity of their markets and use technology. Local travel will be by car, with return back on the same day. Avoiding overnight stays.
4. More car-based travel will happen so as to avoid the risk of catching the virus
5. Lesser corporate trips but a possible increase in number of people travelling
6. There will be more remote meetings than face to face in-person meetings
7. Digitising will increase tremendously – Use of credit cards – company or personal – will be an integral part of most company’s travel and expense policies
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