Business travelers are on the road 3 times more than last year, but are waking up to a new reality

December 9, 2021
Dave Kilduff

Corporate travel is bouncing back – and travel managers now need better ground solutions

Corporate travel is coming back and with it so is ground travel. At HQ, we see about 20% month on month volume increase in reservations this year. When compared to 2020, we are seeing three times the volume of rides. However, the remaining effects of the pandemic mean that corporates need new and better solutions to get their employees safely back to the road.

 

 

 

Ground suppliers have been impacted by the pandemic

The chauffeur industry is in its own reality.  It has been decimated financially, perhaps more than any other segment in the corporate travel world. As a result there is a systemwide reduction of fleet, from the outright selling off assets to mothballing of vehicles waiting for business to come back. Also due to the pandemic there is a global semiconductor (chip) shortage which results in a significant reduction and in some cases outright stoppage of production of vehicles from OEMs as well as parts to repair vehicles. New vehicles and the parts to fix them are hard to come by and at increasing cost.

During the pandemic suppliers looked to cost reduction in part by furloughing and terminating many of their employees. With corporate business slowly returning, rehiring workers is necessary but also challenging, particularly with drivers where many professionals completely left the industry to pursue other careers, or moved from transporting people to transporting goods..

The resulting environment is one of increasing demand with limited supply.  Vehicles, drivers and employees are difficult to come by and are costing more, coupled with fuel cost increases, insurance cost increases, and inflationary pressures across the board.

 

 

Corporate travel managers want reliable platforms

From the supplier’s perspective corporate business is coming back albeit with starts and stops, but with limited capabilities to service this demand.  With all of this, and the laws of supply and demand, current pricing levels have become difficult to sustain. Suppliers are reevaluating their pricing structure and are seeking price relief. At HQ, we see the average ride price increase by 15-25% compared to the same time last year, with some suppliers attempting to increase prices 40% or more..

From the corporation’s perspective, the result of all this is an increase in its corporate mobility spend combined with a serious reduction in the quality of service.  This pits the needs of the suppliers against the needs of the corporations, with no easy resolution.  As one corporate travel manager put it, “why should I pay more for my journeys when there is no guarantee that a price increase will improve the quality of service I am receiving?”  

With many suppliers no longer in business, and others consolidating together, it has become even more important for corporations to find reliable ways to use vetted, quality suppliers with fair prices who meet their corporate requirements. With increasing requirements on vendor management, information security, risk management, GDPR, PCI compliance, insurance requirements, safety and security, know your customer,  and more, the best strategy for most companies is to leverage platforms that aggregate fully vetted suppliers with its preferred suppliers in its primary locations to ensure a reliable level of supply at a competitive price on a global basis.

 

Back-to-Office: Employees’ expectations changed during the pandemic

Before the pandemic it was normal for employees to be at the office five days a week, but today this is no longer the case. Employees are used to working in sweatpants, using virtual meeting tools, and have learned to enjoy and in some cases demand a more flexible work environment. With the new Hybrid 2.0 environment, companies are finding new ways to attract employees back to the office as well as providing alternatives to public transportation and long personal commutes.

Back to office shuttles are increasingly being evaluated by companies and implemented as the corporate world is getting ready for the new normal and are asking their employees to get out their sweatpants and the comfort of their homes.  Corporate shuttles with Covid-19 cleaning protocols, professional drivers with focus on duty of health & wellness are providing a safer, more productive commute option for getting to work. Corporate shuttles offer employees an opportunity to use their commute time for personal or professional purposes.  With Wi-Fi, electric outlets, and comfort it becomes an enjoyable way to commute. In addition to incentivizing employees to get back to work, the company is helping reduce its carbon footprint and reach its sustainability goals.

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