Nikita Bulgakhov, OneTwoTrip: “The b2b travel market is getting more and more like the sphere of b2c travel”
The business travel market is growing and changing. There has been more innovation in this young industry for the past few years than for several decades before. What companies are now leaders in the b2b travel segment? What are the main market trends? What difficulties do companies and their employees face? And how to avoid problems? Nikita Bulgakhov, head of business travel department of OneTwoTrip is speaking about all this.
- Nikita, how would you describe the current state of the corporate travel market, who are its main players?
- The market is rather fragmented, but is rapidly growing. Both large agencies, like American Express GBT and Carlson Wagonlit Travel, and platforms like Expedia are present. New technological start-ups are also emerging. One of the brightest examples is the Travel Perk project, which has already received investment of more than $133 million.
In Russia the situation is similar - there are large agencies, and there are new projects, like OneTwoTrip for Business, that offer new approaches to business trip planning.
In general, the market is stable and grows steadily. According to the statistics, the global business travel market will reach $1.6 billion in 2020. Besides, competition in the business travel segment is lower than in b2c travel.
- You have mentioned new approaches to business trip planning. What is going on in business travel in terms of technological progress?
- The development of the business travel market is going through the same stages that we observed in the b2c segment. The main trend is digitalization and the switch from offline to online. A couple of years ago, business trip planning was a process, when you had to contact an offline agency, to receive flight and accommodation options from it, and then to wait for booking confirmation. Nowadays you can do everything almost in the same format we use to organize our own leisure trips - to choose everything in the Internet in a couple of clicks.
Similar to the b2c segment, there are periodic mergers and acquisitions of travel companies engaged in business travel, which allows large players to satisfy more and more customer needs using their own resources. Such deals occur regularly – we can remember the recent purchase of the German online agency DER Business Travel by American Express Global Business Travel. Before that, KDS, the developer of online booking tools was bought.
It is highly likely that some local Russian players will soon be swallowed by global brands.
- What are the latest trends in the corporate travel market, in your opinion?
Four main trends can be identified. First: the portrait of the business traveller himself is changing. Nowadays the leading role in the global economy belongs to millennials - people born between the mid-eighties and mid-nineties. They have grown up in the Internet era, and this fact has a great impact on their preferences.
This explains the second trend - a separate class of business trips combined with a mini-leave has appeared. Such trips are called bleisure (from English, business and leisure). According to statistics, millennials are fond of travelling and appreciate tours much more than their parents. Therefore, the opportunity to combine work with a tour of a new city is very valuable for such young specialists. Companies are gradually beginning to realize this fact and allow to make such trips more often. As the result, their amount is growing by 20% per year on average, and Russia is fully involved in this trend.
Another important growth area is the fact that the b2b travel market is becoming more and more similar to b2c travel. New online tools for business travel planning are emerging. Their functionality is ever closer to that of booking tools for individual travelers. At the same time b2b tools take into account business interests: for example, some of them have the option of cost control and the use of flexible payment options.
As for Russia, we can point out one more trend - the challenging economic situation in many industries and the unstable ruble exchange rate force companies to look for growth opportunities abroad. As the result, according to the statistics, employees of Russian companies go on business abroad more and more often.
- What are the most popular business travel destinations in Russia and abroad at the moment?
The data suggest that Moscow and St. Petersburg remain the most demanded business travel destinations within Russia. Besides, companies have often sent employees to Yekaterinburg, Samara and Krasnodar in 2019.
As for foreign business trips, this year the top destinations are Turkey, Uzbekistan and Germany.
- What, in your opinion, are the main problems of this market today?
The major problem of the Russian business travel market is the frequent use of post-payment. That is, customers want to pay for services after they have received them, while agents have to work with providers on the prepayment basis. This leads to cash breaks, reduces business profitability, considerably increases risks for travel companies.
The overall market opacity is another problem. Since many travel service providers are still selected by means of a tender, there is always a temptation to manipulate figures in the offer in order to win the competition, and then to add extra fees. For example, agencies often specify a zero fee for airline tickets, and then try to include it in the total cost of the contract amount or to introduce a regular fee for the customer.
- Everything is clear with the business. And what problems do employees themselves face during a business trip?
In general, the list of possible difficulties on a business trip does not differ much from those people face during their vacation. Flights may be delayed or cancelled, for example, due to bad weather - this is one of the most frequent problems. And the cause may be both snow storm and a typhoon in one of tropical countries.
Besides, employees on a business trip violate check-in rules of the hotel. Usually, the hotel check-in time, for example, from 12:00 to 15:00, is written in the voucher. Sometimes people prefer to make a walk around the city upon arrival, and there have been cases when they got so interested that not only missed this time, but came after 12 o'clock in the night - that is, on the next day, in fact. In such cases, the room may already be sold to another guest, and it will be very difficult to check in.
There are also hotels where there is no 24-hour reception at all, and if you are only five minutes late after the end of the working day, there is a risk of staying in the street at night. There are sometimes minor difficulties when, for example, the hotel offers a room of a lower category than the room that was paid for.
- Could you give a few tips, how not to get into such trouble, and if you have got into it, how to solve the problem?
The most important advice - it is necessary to prepare for the business trip thoroughly. If you know that the current weather is unstable in the region where you have to send an employee, take into account this risk and think about what you will do if the weather gets so bad that the return flight is cancelled. For example, you can arrange a remote access in advance, so that this valuable employee could continue working while he is waiting for the weather to get better. You should also book a hotel far from the eye of the storm, so that the employee could stay in touch in a comfortable environment in case of force majeure. In addition, if the company has booked return tickets, flight cancellation for any reason will not result in serious financial losses in any case.
It is also very important to provide good instructions to employees going on a business trip. It is important to observe hotel check-in rules and other business trip nuances, which will help him to avoid problems and financial losses that will otherwise arise.
Of course, it is important to work with travel service providers who provide 24-hour support. If an employee, for example, is having problems checking in at a hotel at night, he should have an opportunity to contact the customer support service that will help him to settle any issue.