Tourism is one of the largest industries in the world. It is responsible for employing a large number of people. The studies on tourism industry employment suggest that it accounts for the employment of 22 percent of the people in the services sector. Last year the travel and tourism industry directly contributed an aggregate of 2.57 trillion U.S. dollars to the global economy.
Essentially there are two types of travel that constitute the tourism industry. First, the leisure travel that includes recreational travel, cultural events, family holidays, sports events etc. The second type of travel is business travel that encompasses corporate occasions such as conferences, seminars, meetings, and exhibitions. These trips are usually funded by the company for their employees.
Business Tourism Scenario
The term business tourism refers to the leisure activities undertaken along with business travel. Business travel tourists are seen to spend twice as much as the leisure travel tourists in a day. Their buying decisions are mainly dependent on the time constraints and how they can manage the leisure activities in between the business travel schedule.
How has Corporate Travel Impacted the Tourism Industry?
Today business tourism has emerged as a strong arm of the tourism industry across the globe. Many countries have now started to realize business trips as a cogent source of improving their economy. Employees on a business trip have less sensitivity towards the cost, therefore their spending power can substantially contribute to the local economy. Let us find out how corporate travel has transformed the conventional tourism industry for good:
Increasing Tourism Potential By Hosting Business Conventions
Nations that observe a large number of business travelers throughout the year are increasingly finding ways to become attractive destinations for hosting business conventions. Economies can position themselves strategically to become world-class meeting and convention organizing corporate destinations. This has brought along a tremendous tourism potential. A classic example for this is the Subic Bay located in the Philippines. They have converted their former U.S. naval base into a free trade and meetings zone. Nearly 280 U.S. corporations have their offices in this zone. They provide essential business amenities, an area that can accommodate up to 1000 people and a total of 802 meeting rooms and guest rooms. They also have a provision for recreational activities such as go-carting and horseback riding.
Business Trips With Families
A large number of corporate travelers have been seen to bring their families on business trips. In response to this, the hotels accommodating the business travelers have opened up facilities for taking care of the children. For instance, some hotels in Scotland have introduced playrooms for children while their parents are in a meeting. This trend has also led to the growth of destination management niche companies that focus specifically on providing services for families of the employees who are traveling.
Corporate Travel Procurement Department
The travel budget for corporate travel has become one of the biggest factors for swaying the expenses of most corporations. This is the reason why developed and developing economies are increasingly focusing on marketing business tourism and the forming of corporate travel management departments in tourism organizations. With corporate travel departments, new roles like corporate travel procurement experts have also come into the picture. The corporate travel procurement team specializes in reducing the average cost of accommodation, checking whether suppliers follow the travel policies, negotiating rates with various suppliers, etc.
Advent of Technology for Traveling
With unexpected itinerary changes to strict business travel policies, managing corporate travel can be complex. The travel managers are now competing with the digitization and technological advancements in the tourism industry. Travel management platforms have helped the travel agents to streamline booking processes and finding the most convenient and economical ways for corporate travelers. Facilities like online tickets have enabled corporate travelers to fly ticketless. The travelers are increasingly using only a confirmation number from phone or emails instead of an actual ticket for checking in for a flight.
Moreover, international travel sites such as booking.com are now giving exclusive deals on tours and travel to travelers of all budgets. They have realized that leisure and business trips sometimes go hand-in-hand, as business travelers like to explore local sights, food, and culture.
Even most travelers traveling for conferences are continuously taking time off for local sightseeing post conferences and meetings. On the other hand, and vice versa, some holiday travelers book their holidays when international conferences are happening in their destination. This blend has given rise to travelers often choosing boutique hotels instead of business hotels in the city center. It is also noted that business travelers, even if they don’t find time for sightseeing, often indulge in trying local cuisine.
Blesiure: It is here to Stay
According to a BridgeStreet Global Hospitality Report, 60 percent of business travelers blend leisure, labeling it as bleisure trip. The report also suggested that 30 percent extended their trips by two days for leisure. When traveling with family, it gives executives more time to spend with their family apart from a break from their hectic and demanding schedule. According to the report, this trend is on a rise, with most of the travelers aged between 45-55 years.
Challenges Faced by the Corporate Travel Industry
The growing trade between economies have no doubt, caused an upward growth curve in the business travel market, however, there are some challenges that hinder it to reach its full potential. The technological disruption has introduced the concept of the use of virtual business meetings and conferences, reducing the need to travel. A hike in the price of the U.S. dollar has also affected the business travel market with increased travel prices. Additionally, organizations are cutting down corporate travel frequency using strict protocols on travel policies.
With business tourism emerging to be one of the fastest growing markets for the travel industry, the world’s economies are now showing interest in extracting maximum revenues from corporate travels. An in-depth study of the latest trends and analysis on the corporate travel market can help the tourism industry to focus effectively on the individual corporate traveler as well as his organization’s travel needs.
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