THE 2023 HOTLIST:
DEVELOPMENTS
Carbon budgets & taxes
Addressing environmental impact
With efforts to reduce the environmental impact of business travel programmes intensifying, more corporates are turning to carbon budgets or taxes – two different mechanisms designed to achieve the same goal of steering employees to lower-carbon travel choices, or even not travelling at all. It is not a new concept. Microsoft introduced an internal carbon fee a decade ago, with $15 per metric ton of carbon emissions levied on business trips and reinvested in environmental projects. What is new is that the influential company is ramping that fee up to $100 from financial year 2023 and will continue to increase it “at an accelerated rate through FY30”. Meanwhile, both Siemens and HSBC introduced carbon budgets last year. “We want travellers to consider carbon in the same way they have always considered cost when thinking about making business trips,” says Claire Turner, HSBC’s head of concierge travel and events operations. “Our overall strategy is to travel half as much and make the experience twice as good.”
China reopening
The great awakening
The sleeping dragon awakens. After three years of a pandemic-induced lockdown, China finally ditched its strict zero-Covid policy and reopened its borders on 8 January, allowing inbound visitors and outbound Chinese residents to travel without the need to quarantine. The last major Covid barrier to fall, China’s reopening saw airlines, including Emirates and Etihad, resume services to the business hubs of Beijing and Shanghai, while more than 408,800 scheduled flights are expected to depart from China in January, according to aviation analytics firm Cirium. CWT China, meanwhile, reported a 150 per cent leap in bookings between 26 December and 2 January. However, the extent to which China’s reopening will affect international business travel remains unclear. Cirium’s data shows a recovery trajectory that is largely domestic, with international departures still 89.8 per cent down compared to pre-pandemic levels. Several European countries have also rushed to implement new testing rules for arrivals from China, which may deter businesses, and the EU has recommended that passengers from China provide a negative test – a move that has been met with criticism from airline and airports organisations.
ETIAS
New red tape
After multiple delays, the European Travel Information and Authorisation System, or ETIAS, is finally due to go live this November and will introduce significant red tape changes for visitors to the EU. Under the programme, visitors from outside the EU who currently have visa-waiver status – which includes travellers from the US and, since Brexit, the UK – will have to apply for ETIAS approval to visit the region. Applicants will have to pay a €7 fee and, if granted, travel approval will last for three years. Applications are expected to be approved “within minutes” for the “vast majority of cases”, says the EU. Similar in operation to the United States’ ESTA programme, ETIAS is being implemented to improve border security through the pre-screening of non-EU visitors and was first discussed by the European Parliament in 2016. The scheme had originally been due to go live in 2021 but was postponed to 2022 and then put back again to May 2023, before a November launch date was confirmed last summer. Better to delay the programme and get it right than to implement it with errors, believes the EU, which might also need to ramp up communications around the scheme to avoid a debacle upon its launch. “This is going to be a huge issue both administratively and behaviourally for UK travellers in particular,” said one Hotlist panellist.
Modal shift
All aboard European rail
Moving travellers off planes and on to trains is one of the simplest measures that businesses can take to begin ‘greening’ their travel programmes. And while some organisations will follow the lead of influential corporates doing just that, such as BCG Consulting, PwC Netherlands and Salesforce, greater powers could also force their hand. Only last month the French government’s plans to ban domestic flights where there are regular rail alternatives of less than 2hrs, 30 mins were approved by the European Commission. And while the Netherlands has previously tried to ban all domestic flights but was scuppered by EU regulation, a government-imposed cap on the number of flights at Amsterdam Schiphol Airport could be implemented later this year. Increasing competition between operators sharing networks and the introduction of new sleeper services between key European cities could take modal shift to another level, even if concerns remain about the accessibility of rail content in corporate travel tools. That might be remedied by the European Union’s Multimodal Digital Mobility Services (MDMS) framework which is designed to ensure access to all rail content for all distribution channels, with draft legislation due in the first half of 2023.
New Distribution Capability
A decade in the making
What’s that you say, NDC? On the 2023 Hotlist? The distribution standard that’s been around a decade without really going anywhere? Well unless you’ve not been paying attention, you’ll know that developments are finally afoot in the airline distribution space and several carriers are forcing the issue. Designed to enable airlines to better differentiate and sell their products, services and offerings, NDC’s protracted progress is now accelerating. American Airlines announced it will be live with NDC content in all three major GDSs early in the second quarter of 2023 but then went a step further at the beginning of December, telling travel agencies they need to be connected to the carrier’s NDC technology by April to ensure access to its full range of content. Even more recently, Finnair said it will introduce continuous pricing via ‘modern distribution channels’ and remove domestic flights from traditional EDIFACT-based platforms. “It is interesting to see another carrier testing the readiness of all players for mass NDC adoption,” said one industry observer. Meanwhile, Kim Hamer, senior director of global travel and events sourcing at Visa, was named Travel Manager of the Year 2022 by BTN in the US, after she brought together United Airlines, travel management company CWT, booking tech provider Serko and NDC aggregator Travelfusion to deliver United bundles specific to Visa through the NDC standard. A new distribution dynamo indeed.
Recruitment
Getting back on track
When business travel came careening back last year there were large chunks of the industry that found themselves short-staffed, with companies having made layoffs during the pandemic or losing employees to industries perceived as more secure than travel. Cue a summer of disruption at airports and long waiting times to speak with travel consultants. Although some holes have been plugged, staff shortages persist for many in our industry and finding the right talent or ambition will remain an issue in 2023. “The challenges TMCs face regarding staffing levels are ongoing. We don’t anticipate the mass recruiting of 2022, but we do still see the need to be consistently attracting and retaining business travel staff across the board to fulfil service levels, particularly at operational levels,” Emma Gregory, director of Urbanberry Recruitment, recently told BTN Europe. “Companies must also be mindful of thinking differently about recruitment going forward and invest in training for emerging talent.” The good news for candidates is that average wages in the travel industry increased by 12 per cent in 2022, according to C&M Travel Recruitment, which saw its records broken for the number of vacancies it helped fill every month from March to August last year. “Last year set numerous records for vacancies and job placements, with spring and summer 2022 being the busiest period for travel recruitment that we have ever seen in the past 25 years,” says the company’s Barbara Kolosinska. “Almost all companies in the travel industry searched for new employees last year and we’re seeing very few signs of this changing as we begin 2023.”
Self-sovereign identity & blockchain
Web 3.0 possibilities
For several years there was lots of hype around blockchain and what it could mean for the travel industry, but then… well, not very much happened. But now there is a growing number of technology evangelists who believe that what blockchain enables, such as self-sovereign identify (SSI) and smart contracts, will underpin the future of travel. SSI seeks to wrest power back from the tech giants, giving individuals control of their own digital identities and letting them share only those elements they wish to and with whom they choose, all while that information is securely stored on blockchain-based technology. “What this technology allows us to do as individuals is to mete out portions of who we are and create a bidding process – bidding for us,” says TravelScrum co-founder and chairman Gene Quinn. Experts believe loyalty programmes are one of the best use cases for SSI, giving suppliers the opportunity to deliver personalised deals. Chain4Travel, for example, is in the process of building a blockchain dedicated to the travel industry called Camino and is already working with Lufthansa to give Miles and More loyalty members a wider range of discounts. Travala, meanwhile, is a blockchain-based hotel booking platform, Pinktada is building a marketplace for hotel room nights based on NFTs, and TravelX is says it is building new blockchain-based distribution and retailing infrastructure for the travel industry. Also experimenting in this environment is EY, which after a pilot in the US last year, is rolling out globally a platform that allows employees to book tailored leisure travel deals. It is working with blockchain specialist Winding Tree and two unnamed airlines. Ian Spearing, EY’s global innovation and technology leader, says the project shows a “clear case” that such a set-up could be used in a larger corporate booking environment. Watch this space.
Sustainable aviation fuel
A long-term solution?
Barely a week went by in 2022 without at least one news story on sustainable aviation fuel (SAF). For the uninitiated, this sustainable fuel creates up to 80 per cent fewer carbon emissions than traditional jet fuel during its life cycle and can be dropped straight into existing aircraft engines. The aviation industry is betting the house on SAF becoming the main driver in its goal to reach net-zero emissions by 2050. This has led several airlines, including Virgin Atlantic, British Airways and Air France-KLM to create SAF platforms for corporate clients to contribute towards the fuel’s cost. Finding new ways to increase SAF use will be crucial – for example, American Express Global Business Travel’s ‘book-and-claim’ platform, Avelia, allows clients to buy SAF regardless of whether it goes into the aircraft their travellers are flying on, while TripActions enables customers to invest in SAF with Neste, a leading provider. Demand for SAF isn’t likely to be the main problem, despite being more expensive than kerosene – creating enough supply will be a much larger hurdle in this journey.
