Each year, the Virginia Business Travel Association (VBTA) presents a live discussion on the state of business travel to the membership and guests. In January, a panel of esteemed travel industry professionals responded to a series of questions on the major industry events of 2016 and gave their forecasts of the forces that will shape the industry in 2017. Many insightful observations were made, so Covington Travel would like to share an overview of the conversation with our business travelers.
Mr. Sam Keene, President of VBTA and Senior Vice President of Business Development with Covington Travel moderated the dialog. The panel was composed of the following individuals:
- Ms. Sharon Fogarty – Global Category Manager, Haemonetics
- Mr. Scott Solombrino – President and CEO, Boston Coach & Dav El Chauffeured Transportation
- Ms. Gail Frazer – Senior Director, Global Sales, Marriott International
- Ms. Kathy Foster – Director, Key Accounts, Southeastern Division, American Airlines
The panelists were given six questions in advance and shared their responses with respect to their own segment of the travel industry.
In your opinion, what was the most significant event of 2016 and why?
Ms. Fogarty and Ms. Frazer agreed that two major events impacted travel in 2016. First was the continuing acts of terrorism around the world, which demonstrate the importance of “duty of care” responsibilities by organizations to safeguard their travelers. The second was the continuing consolidation in the travel industry. Airlines, hotel chains, and distribution outlets have experienced a wave of mergers and acquisitions, creating fewer but more powerful travel providers.
Mr. Solombrino felt that the presidential election poses the travel industry for explosive growth. This President is the first to have a background in the hospitality sector and understands the impact of the industry. He noted that one in seven people globally is employed in the travel and hospitality industry.
Concerning Technology, what new improvements and additions will have the biggest impact on your business in 2017?
Ms. Frazer said Marriott will introduce a Mobile Services App to update their approach to meetings as a result of today’s travelers growing focus on social and mobile applications. Marriott will also be offering a new tiered pricing for meeting Wi-Fi access call “Wi-Fi Simplified.”
Mr. Solombrino said that Boston Coach is evolving and adapting their services to fit the on-demand requirements of today’s travelers. With the acquisition of two technology companies, they are focusing on providing an Uber-styled on-demand service for limos.
Ms. Foster noted that American Airlines supports the development and adoption of a new data transmission standard and is making progress toward rolling out the New Distribution Capability (NDC) championed by the International Air Transport Association (IATA).
With demand increasing, how do you prepare for growth?
Mr. Solombrino noted that they expect to see double-digit growth, so they are upgrading their fleets in key markets. They are also focused on converting to mobile apps for communication.
American Airlines is three years into the largest aircraft order in history, per Ms. Foster, so they are flying a younger and more modern fleet. In addition, American is focusing on route expansion and terminal expansion in key markets.
From the corporate perspective, Ms. Fogarty shared that Haemonetics just completed a company reorganization and formal review of their travel policy. Since they are traveling more internationally, they are considering allowing business class on flights in excess of eight hours. They are also enrolling all travelers in the Global Entry program, something she views as a “must have” for frequent travelers.
If you could change one thing in the industry, what would it be?
Ms. Foster stated that taxes need to change. The airline segment bears a huge tax burden that adds significant – and often unnecessary – costs to the price of every ticket.
Ms. Fogarty and Ms. Frazer agreed that the hotel RFP process needs to be simplified because it is ridiculously complex and takes too much time and money to respond.
Mr. Solombrino feels that new-entrant Transportation Network Companies (TNCs) such as Uber and Lyft should be subject to the same rules as legacy TNCs. In the current uneven playing field, the new entrants have a significant advantage in cost of doing business.
What will buyers in your segment focus on in 2017?
With more Millennials traveling for business, Ms. Fogarty’s company will focus on the traveler experience and addressing their needs. Haemonetics is addressing some of that with their new travel policy, although they still do not currently approve the use of Airbnb.
Ms. Frazer says that hotel buyers will continue to focus on value, although the definition of value is changing due to the emphasis on the social elements of service expected by millennial travelers.
According to Ms. Foster, airline buyers will continue to focus on schedule and price, while ease-of-use and the ability to remain connected while traveling will also be key factors.
Crystal Ball Time – What will have the biggest impact on the travel industry in 2017?
Ms. Frazer predicted that the recent Presidential election will have a significant impact on business and the economy, although she’s still undecided as to whether it will be a positive or negative impact.
Mr. Solombrino believes that the world powers will take steps to finally address terrorism.
Ms. Foster expects that the global competition between airlines will have a huge impact. She also hopes to see progress toward the next generation Air Travel Control (ATC) system because the current system is in need of repair.
The Virginia Business Travel Association (VBTA) is a chapter of the Global Business Travel Association (GBTA). Membership is comprised of both corporations who manage travel and suppliers to the industry. As such, it is one of the best resources for networking and industry education. GBTA is the largest group lobbying our Government on behalf of business travelers, and their successes facilitate changes that impact millions of travelers positively on an annual basis. To find out more about VBTA, contact Sam Keene, President.