Take A Step Closer To get better results and rOI on travel
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Travel management is a specialism, which is based around organising corporate travel, tracking your various travel expenses and devising a comprehensive travel strategy. As a discipline, it is intended to help businesses and their employees to optimise the way they deal with their travel needs. This means making sure everything is handled properly, while minimising any negative impact on things like productivity and financial results.
A major benefit of travel management is the ability to reduce costs associated with travel. This can include everything from airline tickets, to hotel room rates and travel insurance. Generally, travel management specialists will have industry contacts and enough experience to find or negotiate the best deals.
By handing responsibility for this to a dedicated travel manager, or a travel management team, individual employees can also spend far more of their time doing core day-to-day tasks and less time on planning trips.
Once a travel strategy is in place, those offering travel management services can also help you to continually improve that strategy, by reporting on your business travel expenses and suggesting useful changes.
As the name suggests, these systems help companies manage travel. They can be purpose-built tools from third parties (see below), or some large companies even build their own.
In the pre-SaaS (software-as-a-service) days, the latter option made sense. But now business travel management tools are available out of the box, for relatively low cost, and it just doesn’t make sense to build something from scratch.
The point of these systems is to “oversee, regulate, and coordinate the travel activities and expenses of a company’s employees.” These are largely manual tasks that would normally be done by office administrators, or perhaps by a dedicated travel manager in a company.
With a travel management system, this work can be streamlined or automated altogether. The goal is to free up staff for more valuable work than monitoring others’ travel plans.
Recently I found some BTN serious good articles from November 2019 and realized how much business travel has changed and will in the foreseeable future. The 5 articles are about looking at business travel as procurement, savings, reporting and why few read them “what is in it for me” notion, security, wasteful spending (2008 crises) and medical safeguards when travelling. Not a word on Zoom, Teams and Skype.
There are many surveys telling us that business travel will return to a pre-covid level over the coming years, but I for one believe the following changes will influence seriously:
Looking at all the elements making a trip, virtual all of them depends on the fact that business travel generates a higher income compared to leisure. Just the simple fact that leisure happens 1-3 times a year, whereas business travel happens 5-25 times a year underscore the importance to suppliers.
This will force travel suppliers to rethink their business model, offerings, and products. Many suppliers are already acting and as regions do have their individual culture, business structure and technology, markets will develop differently and hopefully open to new ideas and solutions. Many organizations are listening and learning from other industries and consultants (view this report from McKinsey)
How does this affect business travel? Here and now, you have to take into account congested airports, cancelled flights, serious inflation and changing rules. Travelling is in a way going back to opaque world where changing rules takes place so often that no one feels safe.
Companies are now allowing some nonessentials domestic trips even after the learning of alternative communication forms and work from everywhere is challenged by advanced companies like Tesla as they claim the physical presence at the office is more valuable. This even if we need less congested skies and road, better life/work balance and new thinking. We are still living and getting sick by Covid-19 and the new versions.
What travel managers or travel responsible in companies should be working is a new policy. This should include the experience from pre covid-19 and the learnings coming out of the pandemic and now financial challenges:
My friend Scott Gillespie has created this presentation HERE as an important advice into rethink business travel and any physical trip should be valued through “triptester” (LINK). The numbers are based on US data, but I believe they are valid with small differences around the world.
We must accept the world is changing in so many ways that going back to pre-Covid-19 ways of doing business is obsolete and outdated. Use the present scenario to rethink your business model and we will be there to help you
“There is no such thing as a low-priced ride with no strings attached”
When a company changes its travel policy in order to cut expenses the message is most often that in future the employees are traveling on Economy / restricted Class. Unfortunately, the order is very seldom followed by detailed information as to what this actually means to the travelers in the form of restrictions, and as a result there is a widespread belief that you obtain lower fares if reservations are made on Economy Class.
Due to several reasons it is a Utopian idea to imagine that all travelers loyally will back up about the Economy / restricted Class concept, among others:
Loss of ‘status’
Reduced number of bonus points
None or limited access to airport lounges
Longer check-in time
Less free luggage
Missing comfort
No seating
When the traveler then on top of that is not confronted with the many restrictions connected to low price travels until the time when the travel is ordered the attitude will typical be that the travel cannot be carried out on these condition i.e. “book a Business Class for me”.
At this stage the traveler’s negativity towards the Economy / restricted Class problematic is directed towards the travel responsible/travel agency and if they are trying to refer to the stipulated travel policy the result will in the worst case be a conflict with the traveler.
To meet this unfortunate situation it is important to eliminate as many arguments as possible already before implementation of the new travel policy. In future, the travel agency should play a much bigger active role in cooperation with the company’s management when the Economy / restricted Class concept is to be introduced to the travelers – preferably in an open forum where all the parties involved participate.
Resources should also be allocated to a more thorough prestudy where travel patterns and frequency for each department are analyzed. With the extremely varied rules connected to the flight fares there is a demand for a differentiated information material depending of the primary destinations. With this material the company may also be in a better position to evaluate to which extent the employees shall travel on Economy / restricted Class and where the largest savings are hidden.
How do you control whether the employees actually follow the stipulated rules?
One possibility is that the travel agency within agreed suitable periods reports the orders received to the department-/economy-responsible with an indication of which class has been ordered (pre-travel management). It is then up to the traveler to defend a Business Class order and the department responsible has the possibility of making objections before the travel has been made.
Whether the travel agency is to await approval before a ticket is issued must also be evaluated. It is however a heavy arrangement which might result in a fruitless hunt on a signature authorized person and ultimately in a conflict situation for the travel agency not being allowed to deliver the documents.
Preferably, you should end up with a “freedom under responsibility” situation; a concept which might be accelerated by introducing a form for Economy Class Incentive (Euroconomy Bonus), where the department/the travelers are credited part of the savings.
By now it is no secret that the experience coming out of Covid19 and now a European war force any company to review their business strategy and agility. When you add the fact that travel is one of the most CO2 pollution culprits, you must add the consequences to your overall strategy.
This mean that other forms of communication will dominate the way you do business from selling your product online to use augmented reality to have local employees being guided by head office experts. It is not just how your employees see the world, but also your suppliers, customers and other stakeholders see it. You may wish a physical face to face (FTF) meeting, but the other part may be less enthusiastic perhaps due to Corona, time pressure or other reasons.
Your employees time and efficient usage of it is probably your most valuable area in your business. Do you realize that only 15-20% of the total travel costs are the direct expenses? The rest is wasted time, transport, delays, waiting and being inactive.
You will still need physical travel in order to grow your company. The huge differences in culture from one country to another makes physical FTF interaction a must. Brainstorming, development, social values are also areas needing FTF physical gathering.
Of course, you will need a travel policy as business travel have many stakeholders in your company and a perfect area reflecting your company mission and values and include that as well as supplier agreements, insurance, duty of care and environmental policy.
The previous approach was in many cases focused on the direct cost and less of the ROI in making the trip. This need to change as the total cost is a true investment both for your company and the traveler. We have made a letter you may wish to see as a template towards a new approach to travel.
If you wish to hear more about the solutions and options in travel, please feel free to contact us.
DRAFT
Dear
It is no secret that Covid19, sustainability, climate and now war have changed the travel landscape and thus also for you and our company. Therefore, we have changed our travel policy, safety, and priorities. In order to continue growing our company travel will still take an important place but we have used this situation to rethink our business model in communication, travel, insurance, and safety of our people.
Physical trips will still be key component in our strategy and our new policy has tried to offer better opportunities and more flexibility for you as a traveler.
As we move along your ideas and input will be added to policies and package.
We all know that travel includes a lot of wasted time and expenses. The direct cost usually only represents 20% of total cost. That is why we would appreciate you go through the following process when planning a physical trip:
We wish you to have a successful trip and if you need more flexibility, extra days to recoup, have more meetings or review business opportunities we cover the cost. When having returned we would like you to fill out this survey (select english)!
If you have questions, feel free to contact HR.
As an industry travel corporate, as well as leisure, we early on felt all the
consequences of technology. From the earliest Global Distribution Systems based
on Mainframe products to the raise of the Internet. The fact that you only need
bits to get the traveler from A to B has made it easy to introduce new software
or use existing technology structures.
While we must accept the fact that the industry is a home market industry
with local differences and cultures, it also is one of the industries who early
on understood globalization, and at the same time the need for personal
reaching out to the consumer and corporate traveler.
We have all seen the success of Expedia and Booking.com as well as the new
entrees Airbnb and Uber. The raise of Smartphones and mobile network has made
it possible to fine-tune personal communication and fast data transfer to
billions of people.
Everyone has been trying to adapt to online options and use the tools to
achieve broader reach while decrease cost per trip. The winners of this
development have been the corporate as well as the consumer.
What will 2023 bring?
Enter Artificial Intelligence (AI), Augmented (AR)
& Virtual Reality (VR), Blockchain (BC), crypto currencies
and Mobile network 5G (5G)! To some extent I believe
most people have heard the names and already seen products and consequences of
these. However, I am not sure that everyone understands the long-term impact on
the travel industry.
AI is the tool making software learn and develop without
human interface. This will have a major influence on most industries and people
around the Globe. I am not sure we understand in depth of what may be the
result and consequences. I focus on the travel industry, and soon you will see
the development of various messenger and chat services being flocked with Bots
also known as web robot. WWW robot or simply bot, is a
software application that runs automated tasks (scripts) over the Internet.
Bot already learn to understand our communication and
interfere with solutions. An example: If I chat or Skype with a college and we
start talking about meeting, a bot will start offerings possible flights and
accommodation. It will book and issue documents while we communicate, select
the right offering made by the bot, and at no time with any human interfering
or support.
If you chat with family and start talking or writing about a destination, a
bot will come forward and (knowing you) will offer accommodation or special
offers targeting you! The bot will learn your preferences and search the Internet
for items or services matching the requirements you have taught the various
bots.
Amazons Echo (Alexa) has already set new standards in communication. You can
tell it to order a taxi or find an information on the spur of the moment and it
will search the Internet, answer or confirm the reservation. Being just a box
placed in your home you suddenly have got a new voice in your life at
affordable cost and many other manufactures will follow and offer even more
intelligent systems.
VR are already having a huge impact on how we
experience looking for destinations, travel and how to communicate. You will be
able to visit the destination just by taking on a VR set, and you will be
there! The technology has been available for some time, but Facebook is currently
investing 70 billion usd into Metaverse $ gives you an idea of the potential.
In a few years you can replace video meetings with virtual meetings, where
everyone is present in the same room as an Avatar, and you can see all the
expressions and turn your head as if you were there physically. Engineers’ can
walk around where they plan to build, without being there. You can visit hotels
and choose exactly the room or meeting venue you want and much more.
Looking at construction we already see the disruption that eventually will
happen in other industries including travel. Microsoft’s virtual
reality-hardware HoloLens can already be used to “walk” inside different
construction models and the IT-giant is working with Trimble, one of the
worlds´s leading producers of geodetic measurement and GPS-technology, to make
the technology even better.
BC: Bitcoin is today a well-known standard and brand. What
is happening is the tools behind Bitcoin BLOCHCHAIN is
recognised as very useful to build a new line of products. It is the evolution
of the ledger. Ledgers act and register the movement of assets like shares,
points or parcels of land and are today placed in closed “physical” networks.
Access to these kinds of data is restricted for security reasons but often because
that`s how its custodians make money. BC is cloud based and
its structure means it`s lore secure. Criminals cannot commandeer individual
machines to gain access to a BC network. Just look at Winding
Tree and follow their progress.
The technology can for example be used by an airline whose loyalty program
(in which terms and discounts can be adjusted at will). This means that a
customer, whose flight was grounded, would be able to use points to pay for a
meal at a restaurant during a layover.
5G is the channel that will make the above possible via
your smartphone. 5G is the new technology that makes the network faster, and
able to move much more data around the world, compared to today. This means you
can watch movies through VR sitting on a camel in Morocco or enjoy a concert
with Bayonne being there with the audience. Companies can use Internet of
Things to “print” and manufacture a large range of physical elements for
example complicated tools.
How will it impact the travel industry?
The consumer (leisure traveler) will be even better served
than today and enjoy cheaper and better travels. The individual will feel safer
travelling, as they have their smartphone and can ask for any help before,
during and after the trip.
Businesses will have many more opportunities, offering services and products
matching exactly your personal preferences.
This development needs a kind of employee understanding the power of social
networks, chatrooms, and usage of products like VR, BC and bots. The complexity
of the travel environment will increase and if a trip needs human interface it
demands serious knowledge to serve the individual traveler.
The corporations will travel less in order to achieve their targets, and at
the same time be able to act real global and fast, as you can “travel” from
Copenhagen to Ho Chi Minh City in the time it takes to set up a VR meeting or
site visit.
My advice to the management in every sector of the industry
Like Reagan said at the Berlin wall: Tear down that wall.
In the coming years the technology will move ahead even faster that during
the last decades. Just think of the progress made since 2000 and imagine where
we are in 2042.Time to markets for various products will be shorter and the
adoption rate by the individual users much faster than we previously expected
because of the fact, that everyone carries their personal smartphone.
This means the industry leaders need to think out of the box starting to
understand the market and individual consumer leisure as well and corporate.
The borders between the segments will be blurred and the next generations will
have different values and requirements.
The author Frank O`Connor once told a story about when he, as a child,
played with 2 friends in the fields. They came to a wall that was too high and
dangerous for them to climb. They through their caps over the wall, and it
forced them to climb over the wall
Rethink your business! Throw your caps over
the wall and climb over.
I wrote this white paper 4 years ago and with a few exceptions it is still very valid. In my view a total overhaul and new beginning the airline industry only need a Elon Musk to corner the market. I am quite sure that the old suppliers are thinking about it, but also believe they are embedded in their financial success and shareholders wish to maintain status que.
BACKGROUND
There is no doubt that the development of the Global Distribution Systems (GDS) was a huge leap at the time. Most airlines used PSS but with a fast growing global travel something had to happen thus the GDS. Whether we talk about the US or European developed systems the fact that it could cover multiple countries, currencies, and rules were second to none at the time. However, like any other system, the explosive development of technology tools, the Internet, social media, cloud structures, and search engines have changed the rules.
While all the GDS`s originally were controlled by the owner airlines, the decisions to sell to third parties changed everything. The original pricing was established to create funding for the large investment needed in hard (mainframe)- and software. That plus the fact that the pricing at that time was “small” per segment or ticket due to extremely high and monopolized airfares.
The huge decrease in airfares over the last decades has changed that situation and now the pricing is much higher as a percentage of the income from segments or tickets. Today the 5€ distribution cost per segment stands out compared to the 1€ cost for the internal airline system.
The financial results from the GDS confirm this and that it is almost an Oligopoly situation for airlines. Other third-party areas cashing in are the cost of using airports, credit cards, and the IATA structure.
Other legacy structures are Bank Settlement Plan (BSP) (ARC in the US), SITA, ATPCO were established to settle ticketing coupons, payments, pricing information, and distribution in a global world and they all exist today and are being used.
The world has changed and here are some key elements:
• The airline industry went from a monopoly structure with the government controlling everything including pricing to open skies and free pricing.
• The new entrants like Low-Cost Carriers with different business models and distribution models increase competition and put pressure on airfares.
• With airports, GDS, and credit cards as virtual monopolies in the industry and impossible to avoid, social media and tools like blockchain open up to challenge some of these.
• The rise of the Internet, online booking models, and going from opaque pricing to transparency.
• Intermediaries experiencing going from being paid by the suppliers to find the payment from end-users like consumers and company travelers.
• The huge decrease in the cost of technology and an increase in capacity by i.e., the cloud.
• The change in customer segment from relying on business travelers to consumer and holiday traffic.
• The change from real global ticketing income from a large number of countries to become dependent on the home market and much simpler structures.
All these elements will be keys to a successful future for the whole industry and to increase the value and growth it brings to a large number of countries by increasing their Growth Domestic Product (GDP) substantially.
Existing structure
The individual airline uses the same infrastructure described above to allocate, price, control, and distribute their capacity. This includes data transfer to and from airports, check-in, gate, luggage, flights, GDS, and data warehouse. At the same time, most legacy airlines gave up control of the distribution to their then GDS and stopped hiring or employing people with the insight and knowledge to create alternatives to the existing structure. This means that people able to work in this environment are employed by the GDS`s and not the airlines.
While IATA does try creating new products for its members, it is too late and too little. New Distribution Capacity (NDC) is a serious investment and at least a way to establish uniformed structures. However, other industries show the way forward and with 3 or more class structures and only 26 different pricing levels (English alphabet) and dynamics for planes with up to 500 passengers, new products are needed.
Many airline executives are aware of this but are hampered by the impression that they need to start all over with the whole platform with multiple products integrated. The unholy alliance created by the GDS and the intermediaries (i.e. Travel Management Companies (TMS)) sharing the segment fee income paid by the airlines needs to be reviewed. Yes, the parties have invested heavily in various products streamlining the process, but it is still far too complex and costly through the whole food-chain.
The key AND ONLY argument: IT WORKS.
One new way forward
The alliances created a structure we believe can work. Most legacy airlines have one or more codeshare partners. They allocate pricing and receive allotment from each other. This is mostly shown in the GDS, where they all are present.
2 airlines (SAS & LH) had a large codeshare infrastructure. When a customer books a Lufthansa seat and price on a SAS flight in the LH environment, the data are sent to SAS and processed in their infrastructure. Normally SAS can show and sell up to 9 tickets at one time in their inventory control system and codeshare partners only 4.
However, it has worked for decades.
Originally it was a tedious process with high-level executives negotiating to avoid cartel charges, but once the administration was set, the process with allocating seats, load fares, and receive your “own” booking for the rest of the process worked fine.
Create a virtual ghost airline distribution system.
Looking at one of the legacy airline Scandinavian Airlines System (SAS). They use mostly the GDS Amadeus for both distribution and data transfer systems to airports, various public bodies, and ticketing. The way forward is to create new pricing, capacity utilization, and distribution structure.
The best would probably be creating a connection builder, but if too complex a product should include:
• A mirrored copy of the airline inventory including flights, number of seats, and times.
• Be able to price the individual seat dynamically at the point of sale without any upfront filled fares.
• Include a large range of auxiliary services and products from luggage to food.
• Distributing structure making the airline free to structure selling including allotment, control home market, name change rules, reuse, corporate rates, excess capacity, etc.
It could also target the mobile world and be exclusively bookable via smartphones. This could include tickets being offered at the airport, upgrades done, early boarding, products onboard, usage of bonus points.
This means an airline like SAS simply design an airline called: SAS1 and treat this as an alliance partner. Space control offers SAS1 i.e. 50 seats (or 1-2 seats per row) and the new pricing system will price each seat with an individual price. This will mean middle seats will be cheaper than aisle and windows and row 1 more expensive than row 29. Booking 2 seats can be priced differently than 1 seat and if auxiliary products are bought yet another pricing. Everything based on the airline SAS1 inventory and pricing product.
Once the customer book a seat, the reservation data are exported into SAS normal system and reported as any other codeshare partner`s data. Passenger data will end up at the airports and aircraft, accounting, financial records, and data into the yield and content management.
What are the advantages?
• Using next-gen. tools (i.e. Blockchain), bypassing the GDS will enable substantial savings.
• Bypass or avoid Intermediaries like BSP, ATPCO, and clearinghouses, or change the usage of these bodies.
• Select own distribution partners, conditions, and rules.
• Control the point of sale of online structure and user-friendliness.
• Better selection of communities and create special rules.
• Design industry and customer-specific corporate fares.
Obstacles
The one major obstacle is the fact that most airlines have signed exclusive agreements with Global Distribution Systems (GDS). Another is the fact that airlines, in general, do not have the right technology and specialist people.
Next step.
Find partners already knowing such systems like Travelsky from China, Hagon from Germany (specialists for distribution system for trains), or IT companies willing to support development. It could also be private IT companies Capital funds wishing to enter travel.
We know from Travelsky that a fee of 1€ for distributing and selling a seat is profitable and with a small lean organization behind a system, it can become a profitable business quite fast.
Project description
Create a booking (and perhaps payment) system flexible enough to be used by small as large airlines. The system should have the following functions:
A profile loading facility.
This includes entering new information if a first-time traveler. The data should be GDPR secure. Once entered, offer being a member of the airline loyalty program in case available. The system must offer to reenter with user and password. If an airline already has its designated CRM system, it should be integrated.
PRODUCT DESIGN
Most large airplanes are made by Boing and Airbus with companies like Bombardier and Embraer making smaller aircraft. This means the system should be able to adjust to the precise version the individual airline uses.
Each seat should be possible to price individually so a business traveler lays more to be at the front of the plane and a middle seat cheaper than an aisle. The rules needed for the individual price should be simple and easy to understand by the consumer. Buying a seat should have the possibility for added sale of services or products like Wi-Fi, special food and drinks, the latest movies or even tax-free offers like the charter companies do. Auxiliary services like baggage, lounge access, and preboarding is a given.
Yield management must be possible, group offer, special segments i.e. handicap, injured people with a doctor, easily designed offering structure to sell last seat available.
Some airlines might choose to use the system for mobile sales only.
To utilize the flexibility special net fares for corporate travelers so being able to recognize special rules conditions. This could include flexibility, fast track, guaranteed seating per profile, preordered food, upgrade facilities, and much more.
Once the seat is sold
The seat with the number and sold price, luggage, and profile is transferred to the basic airline admin system and goes through the normal process with sent to airports, etc.
The data should go into the data warehouse where big data software will create the necessary information structure needed to maximize the load factor.
Ticketing system
I see 3 ways forward:
If not conflicting with the GDS contract an airline can choose to use the existing IATA/BSP ticketing structure. I still see that as quite expensive.
Using ticketing systems like Hahn Air or World Ticket. I believe them somewhat expensive too.
Take up a neutral ticketing system as they already exist in many forms from the train, theatre to events and adjust them to the airline world. I believe this is the most inexpensive way in the long run.
Financial systems
Systems like PayPal, credit cards, DIBS, should be available, but it could also be an opportunity to use new mobile payment products and transfer funds directly between customer account and airline account, thus minimizing the payment cost.
Marketing and packaging
With the planning and thinking on the whole food chain with a distribution system, I believe it also is an opportunity to rethink marketing and sales. In a world where any value coupon, spot advertising, and personalization are just bits, bundling targeted products (i.e. Starbucks at the airport), books to read, movies to watch, and items to buy and get delivered home or pick up on the way home brings a world of earning opportunities.
IF YOU HAVE COMMENTS OR IDEAS, FEEL FREE TO CONTACT US
WHAT ARE WE TALKING ABOUT?
Some background information on the first claim.
There is an ongoing discussion about the how much pollution aviation accounts for. In general, CO2 is recognized, but many others: nitric oxide, nitrogen dioxide (together termed NOx), water vapor, particulates, sulfur oxides, and carbon monoxide (which bonds with oxygen to become CO2 immediately upon release) is included in the emissions. Aviation accounts for 2% of the total global CO2 emission, but since most pollution happens at 10 km altitude, scientists claim it is necessary to multiply the direct emission number by a factor 2 and thus making it 4%.
The numbers are frightening:
IATA reports that the CO2 emission in 2017 will amount to 853 million tons. This is only for members of the cartel. You need to add low cost airlines, charter, freight, small aircrafts. This means including the multiplying factor the emissions come to more than 1.000.000.000 tons of CO2 in 2017. Add to this dangerous Chemical Substances being part of the exhaust and the force factor already mentioned.
Overall, the latest scientific estimates put the climate forcing impact of global aviation at 4.9% of total climate forcing while its contribution to global GDP is 0.7%. This makes aviation seven times more climate polluting than average economic activities.
These emissions from a liter of jet fuel are similar to a four-seat car with one person on board, however, flying trips often cover much longer distances than would be undertaken by car, so the total emissions are much higher. For perspective, per passenger a typical economy-class New York to Los Angeles round trip produces about 715 kg of CO2 (but is equivalent to 1,917 kg) of CO2 when the high altitude “climatic forcing” effect is taken into account).
c of transport is about the time used to reach your destination. Average flying time is around 2,5 hours. This means that up to 4% of annual global pollution are generated by 0,0165% of the annual time available to the world population. This means that few are responsible for creating pollution influencing everyone on the planet.
Just the impact from airports does influence the neighbors seriously. Watch this movie to get an idea about how much pollution you generate when travelling HERE. Remember that at the same time transport by air is growing annually between 5-10%.
Some background information on the second claim.
There is no VAT or tax on any aspect of International air travel, not on airline tickets, nor on purchase of aircraft, nor on their servicing, nor on their fuel, nor on air traffic control, nor on baggage handling, nor on aircraft meals. Everything to do with air travel after passport control is zero rated. All EU countries zero-rate VAT for intra-EU and international flight tickets.
However, aviation, like all other companies involved in the supply chain whose output is subject to VAT, can reclaim the input VAT paid on goods and services they purchase to carry out their business. This would not be the case if air and sea tickets were simply exempt from VAT. There are some countries claiming VAT and taxes on domestic aviation, but most countries are doing nothing. The main issue seen from CO2 point of view is that the income just goes into big coffer and a specific fund designed for offsetting emissions.
The VAT zero rating of aviation is an effective subsidy to passengers and to airlines which induces an artificial demand for air travel, which in turn aggravates the growing problem of aviation’s impact on the climate.
On Pollution: Where are we from a public point of view?
Just looking into the Internet shows how little this subject has been mentioned during the last decades. The globalization, arrival of Low Cost Carriers and recent years cheap jet fuel has worsened this situation.
In 2008 EU agreed on using the existing emission trading system if airlines exceeded certain threshold. The airlines promised to deliver exact numbers. This actually did happen and 2016 was the year where the deal was to be reviewed. The emission system was only available in EU. US and other countries tried various idea, but the airlines fought back.
Finally, At the 2016 ICAO (UN) Assembly, a program named CORSIA (DETAILS) was brought forward. The core content was establishing an emission offsetting scheme forcing airlines to buy CO2 quotas when trespassing certain thresholds. In the agreement is a schedule that allows time to implement these systems and reporting structures. The system will require airlines to monitor and report their annual CO2 emissions on international routes and offset those exceeding 2020 levels. The deal is expected to be active from 2021 but is voluntary until 2026. The timelines are 2021-2023, 2024-2027 and the mandatory implementation 2027-2035 The agreement is already signed by 66 out of 191 countries but is far too weak.
Though the agreement may have its flaws, it is worth considering what the world might look like without it. If nothing is done to curb aviation emissions, all other things being equal, by 2050 aviation emissions are expected to triple, accounting for 27 percent of the global carbon budget if we are to meet the Paris Agreement goal of keeping temperature increase below 1.5 C. This would require every other sector to rein in its emissions to the point of absurdity, just in order to accommodate for aviation’s growth.
The EU Commission and parliament has recently agreed to enter the ICAO
agreement (CORSIA) and is looking to put on hold the current geographic scope of the EU Emissions Trading System for aviation, covering flights between airports in
the European Economic Area. This will ensure a level playing field and equal treatment of all airlines flying in Europe.
Everybody or institution looking at or being involved in the industry claim to be working to create a CO2 neutral environment. From airports and airlines to aircraft and engine manufactures we have heard them all pledge to decrease the emissions including introducing bio fuel, electric cars at the airport, lighter planes and more efficient engines. However, we still have thousands of aircraft flying every day that were build 20-30 years ago.
The weakness of the structure is the simple fact that the CO2 emissions and other pollution will be “free” for an almost infinitive time. The global population of 7,5 billion people, feeling the changing weather impact made from 3,5 billion passengers actually travelling by air and of which many are frequent travelers, should not be penalized.
On top of this we already have seen trading emissions have had questions asked about the true value and documenting if the emissions really are being offset. What is even worse is the fact this trading structure is invisible to the consumer and travelers.
The fact is that 1 billion tons of CO2 is entering the air in 2017, 2018, 2019 and 2020 and perhaps until 2027 and not a lot if anything is being offset. It cannot go on.
On subsidizing direct or indirect? Where are we from a public point of view?
The exemptions have their origins in the early days of air transport when it was believed there were societal benefits in promoting the recovery and growth of international aviation after WWII. There was also a belief that the Chicago Convention (agreed upon 1946) provided international tax exemptions to aviation. Neither of these considerations is true or justified today, if indeed they were ever true or justified.
Most countries follow the recommendation by the Council of the UN International Civil Aviation Organization (ICAO), that fuel used for international aviation should be tax-exempt. The recommendation does not preclude “charges” for environmental purposes. Some airports have landing fees related to aircraft noise levels, and various countries have considered or introduced more general environmental charges which could extend to cover aircraft greenhouse gas emissions. Aviation fuel taxation is also precluded in most countries by provisions in the bilateral Air Transport Agreements, which are the main legal frameworks for the operation of international civil aviation.
The world need funds to build CO2 offsetting project and it is not fair that the world population support the upper and middle class’s trips financially, and at the same time be victims of increasing violent weather, more draught and increasing sea levels due to the CO2 emissions created by the same trips.
Next step
Something needs to be done; Lower the emission from aviation and finance projects offsetting the pollution.
Aviation has changed the way we see the world. It has helped the globalization of trade and manufacturing, brought tourist to developing countries and transported workers from home country to workplace. We do not believe in Aviation to stop, but wish to treat it like any other industry and CO2 polluter. Many airlines have unsuccessfully tried to offer voluntary CO2 programs, and many companies are registering their pollution footprint. A few even participate in offsetting programs.
However, it is a public responsibility to find a solution and the only way forward is adding a passenger levy on all air traffic or introduce a jet fuel tax. The proposed structure with a global quota structure to offset future increased emissions is simply not enough. The world cannot live waiting until 2021 to act. Experience already have shown that the airlines lobby work has delayed any development for the next 9 years. How can we be sure no further delays will happen?
Introducing a jet fuel tax
Many commentators have argued that NOT having a tax like the one on fuel in general is an indefensible anomaly, given that aviation accounts for a growing share of greenhouse gas emissions. However, there are several obstacles to taxing aviation fuel. First, it is probable that unilateral moves by individual countries to impose duty on this category of fuel would be counterproductive, and contrary to regional law. Second, it is likely that even a regional wide agreement on taxing this fuel would have a limited effect. Imposing duty on all flights – not just ‘domestic’ ones within the EU, China or US would pose the threat of “tankering”: carriers filling their aircraft as full as possible whenever they landed outside these regions to avoid paying tax, increasing the level of aviation emissions.
Introducing a passenger or aircraft levy
A levy is the fastest way forward. It can be introduced by local governments and is to be paid at departure country via the ticket and starting NOW. Governments can force a levy through the airport structure and decide if it is based on individual passengers or per aircraft departing. It will force the airlines to raise the ticket price, but an OECD report shows that a 5% increase in airfares only reduce traffic by 0,6%.
If the world was to use the California levy of around 12$ per ton of CO2 the income from a levy would bring in 12 billion $ to be used to offset the pollution. The levy per single transaction would be 6$.
This is a government and public responsibility and it is logic that those to pay are the people and freight forwarder using aviation and causing the pollution
It is not a tax, but a collection of funds to be invested in CO2 offsetting projects. It should be the individual country charging and administrating this levy because of the individual GDP and pollution generated in each country. The selection of projects could also be locally or global. This article explains some of the issues facing CO2 offsetting projects HERE.
For example, EU could claim 10% VAT on aviation within its borders, including domestic traffic. All the income could be given to a fund with its purpose to finance projects or invest in alternative type of environmental friendly transport types i.e. highspeed train. The fund should be managed by people experienced in creating and manage pollution offsetting projects.
Looking at the possibilities we should take following items into account:
The levy should reflect both the CO2 emissions created, the altitude factor and other chemical substances sent into the air. I am aware people like The CEO of Norwegian Bjørn Skoos already support some form of levy reflecting new versus old airplanes.
There are following reasons:
I believe companies, passengers and the airline industry initially will cry wolf and tell how bad this will be for businesses and the travel industry. However, the last years catastrophic weather with increased draught, bigger storms and flooding must have an impact.
Any responsible government should start immediately creating the fund, calculate the levy and act. Better sooner than later.
BTN asked industry executives, as well as our senior editorial team, to weigh in on what will matter in the coming year, and we got unique answers. A call for radical collaboration, musings on the power balance between travel managers and travelers, the growing weight of personalization and loyalty, the value of social capital as an ROI of business travel.
There are predictions that New Distribution Capability will precipitate industry consolidation, but also observations about diversity, equity and inclusion—and whether DEI is essential to realizing the true value of travel and meetings. And, yes, there’s artificial intelligence. We wouldn’t leave that out.
The travel ecosystem is changing with revolutionary intensity. High travel prices and content fragmentation are combining with a general failure to reconcile what is important to travel suppliers, travelers and, ultimately, the business itself with current market realities.
Travelers express their skepticism in so many ways—blogs, traveler surveys and booking behaviors are just a few—and they are getting the attention of their business leaders. The C-suite already knows, though. They are road warriors who use hotels and mostly fly commercial, so they see firsthand the same market shifts, and they are questioning whether managed travel still delivers value.
Suppliers are asking the same question from a different angle. In a world where loyalty has become the most highly valued element of the travel marketplace—whether leisure, business or bleisure—the supplier C-suite in many ways is adjusting its expectations of what value managed travel should deliver.
2024 is the year that managed travel will reframe the promises we make and work out how to keep those promises to satisfy more travelers and C-suite executives, on both the supply side and buy side. The key, however, will be for all stakeholders to lean into the friction points and harness them to ignite innovation and rebuild trust throughout the ecosystem.
Duty of care; cost savings; environment, social and governance; compliance; talent acquisition and retention; data privacy; and overall efficiency when it comes to process and tools—these have been the traditional priorities of managed travel. How can we reframe the promises around these priorities and have a positive impact in 2024?
The promise that the managed travel channel will deliver the lowest available rate according to policy survived for the U.S. marketplace until recently, when American Airlines shifted hard to New Distribution Capability, among a number of other supplier moves in air and hotel categories. But let’s consider what we already know: Hundreds of airlines across the globe have never been in a global distribution system, yet travelers find their way to them.
The Mindset Shift: Mandated air booking channels will face massive scrutiny in 2024 from both suppliers and travelers, and likely will result in a program having less value to both parties. U.S. companies will have to stop sweeping this under the rug this year. They’ll begin looking at channel models embraced in other markets, innovate with tools that open new channels, guide employee decision-making per channel and gather critical data for duty of care and analysis. In doing so, they’ll have to adjust policies to put more trust in employees.
The Promise: ESG Is Primary to Travel Management Strategy
This is a new and pervasive promise. And it feels like a promise backed by evidence in objective and key results plans, like those required by the Science-based Target Initiative, in most every global organization. But it’s a not promise kept yet, at least not by most companies. Disruption in the managed travel value chain and in distribution overall set the stage for a mindset shift, bringing differentiated content into managed booking channels—or activating new channels to play in the managed space.
The Mindset Shift: Even if the promise is enabled by differentiated content, the promise can’t be kept unless everyone in the ecosystem acknowledges that sustainable or DE&I-oriented choices may not be the most cost-effective. It’s up to the company to recalibrate value metrics to align with ESG—or not—in 2024, but the tolerance for lip service is closing. Only data and evidence will establish the trust needed between suppliers, travel managers and travelers to bring ESG into the mainstream for travel management, but we’re not there yet by a long shot.
The Promise: Travel Risk Management Programs Are Effective
I’ve benchmarked with at least 50 companies on TRM. Less than half of travelers’ bookings are captured in duty-of-care processes for most companies, especially those with large footprints. Fifty percent is not enough, which has been proven by every crisis in the past 20 years. Political unrest is at the forefront of our minds, and it has multiple downstream effects, especially in duty of care. Legacy practices defined by booking channel mandates are unraveling as content fragmentation has pushed business travel bookings to unmanaged channels. Arguably the processes were never robust beyond a handful of markets.
The Mindset Shift: New channel-management and data-capture strategies must take hold to ensure duty of care. In addition to that, however, employers will require explicit employee buy-in to travel and data policies, with an understanding that employee commitment to TRM processes is the only path toward compliance with local laws and regulations. TRM will be among the trickiest propositions for 2024, given travelers’ loss of faith in the company’s ability to deliver comprehensive travel content—and perhaps unseen to travelers, how well the company can track itinerary changes in a multi-channel environment.
The Promise: A Managed Program Delivers Savings
Price increases are everywhere. Suppliers continue to recalibrate how discounts, value-added products, and services are tied to corporate volumes. Managed programs, in turn, will have to take a bigger-picture view of value in 2024. If stakeholders can work together, a broader mindset will yield management strategies that have actual impact in a marketplace where the value of corporate travel is scrutinized by more suppliers than ever before.
The Mindset Shift: Consideration of factors contributing to employee productivity and the return on investment of travel are equally vital for long-term success. The marketplace in 2024 will force managed programs to consider making a new promise to balance cost, well-being and sustainability since pure savings are impossible for most to achieve. Since driving loyalty figures more prominently in supply-side value—and the promise of status, convenience and rewards are sought by business travelers themselves—managed travel will seek to reconcile the corporate program with how it can participate more deeply with loyalty and leverage it to the program’s advantage.
Wikipedia defines “Corporate Travel Management” as:
“…the function of managing a company’s strategic approach to travel, the negotiations with all vendors, day-to-day operation of the corporate travel program, traveler safety and security, credit-card management and travel and expenses data management.”
It is a pretty good definition (I think) and one that our industry, and all its parts, have centered ourselves around. But as we look ahead into 2024 and consider some of the emerging trends, I can’t help but ask—will it last?
Strategy, by definition, is about making choices. Companies choose what kind of products they want to sell and who they want to sell them to; it is as much about what you want to do as it is about what you don’t want to do. Great strategies have both parts.
So, let’s overlay some of the ongoing travel industry trends onto this thinking:
All these trends in isolation may just be interesting news bits. But when you start to mix them up and mash them together, there’s only one conclusion: The choices you once implemented in your travel program are becoming less and less relevant. Ignore that, and you won’t have a strategic approach to travel anymore.
Think about it. You spent years training your employees to trust the online booking tool you gave them, and to follow this policy and these approval steps to book business travel. You then built rigid processes to collect data, keep your travelers safe and supported while on the road, and fully integrated all of it into HR and expense systems so you could ultimately report on the savings you generated.
But what really happens? Your travelers know that approving a trip is pretty subjective, and when it is approved, they are often engineering their trip for maximum personal comfort for as much as the travel policy will allow. (Show me a company with an 8-hour business class policy, and I’ll show you how many people take a connection to their final destination where the first leg is shockingly longer than 8 hours). They come into the search process with their own preferences in mind, often searching for options before they even log into the OBT. And if they don’t get their way, they will then book directly and rationalize it to their managers as saving the company money because it was cheaper that way. What manager is going to reject that expense? Sound familiar?
Now spin the question around. If a traveler can get a better discount by going supplier direct, and you can capture the relevant data points to ensure you know about it and they are safe, is that wrong? After all, a lack of control doesn’t mean lack of management, and a strategy can employ any number of tactics and choices to be successful. If suppliers are investing heavily in self-service tools and willing to provide discounts you can’t get yourself, or if your traveler lives someplace where one supplier dominates the market and you make them use someone else, why are you fighting the tide?
Change is the only constant in the world, and big changes are happening now. Like it or not, the balance of power is shifting away from the company and back to the traveler, and everyone wants to work with them to nudge their spending power over their way. You can view this as right or wrong, but it is unlikely to change either way, and your main choice is to adapt or not. Control is not always necessary to accomplish the same goals, and things will only get worse. And by the way, the trends happening in 2024 are just the appetizer course for bigger impacts in 2025 and beyond.
So maybe it’s time to update the definition of Corporate Travel Management. And if you’re unwilling, well, you can go ask Blackberry how that worked out for them.
We’ve all heard of Software-as-a-Service, a cloud-based method of licensing and delivering software that revolutionized the traditional on-premises software model. Similarly, Travel-as-a-Service offers a cloud-based solution for travel bookings that can be embedded within third-party offerings like software products or websites.
Mirroring how SaaS upended the software industry within a few short years, TaaS is poised to become a household term in the travel sector in 2024 as many companies embrace the model for delivering travel to their customers.
Traditionally, companies seeking to launch their own travel solutions faced limited options: purchasing an established online booking tool provider, forming a loose integration with a partner, or building a booking solution from the ground up. Examples of recent acquisitions include Coupa’s acquisition of Pana and Yapta, US Bank’s purchase of TravelBank and Certify’s acquisition of assets from NuTravel.
Given the high cost of acquisitions, many software companies prefer to form loose partnerships with online booking tool providers. Meanwhile, most suppliers have developed their own websites for booking management. Both approaches, however, have significant drawbacks. Loosely integrated solutions often result in a disjointed user experience for travelers, while custom-built booking sites can be expensive to develop and maintain.
Recently, Travel-as-a-Service has emerged as a compelling alternative in the market. In 2021, Capital One initiated a partnership with Hopper. Last year, Walmart unveiled a unique travel platform for its shopping club members, powered by Expedia Group’s white-label template. Brex, Center, and Qantas launched travel solutions powered by my company Spotnana last year.
TaaS’s emergence is a direct result of recent advancements in cloud computing, microservices-based software architectures, NoSQL databases, composable user experiences, and progressive development of open APIs with sub-second latency. The convergence of these technological strides has enabled the creation of embeddable travel solutions that are customizable, deeply integrated, and can be seamlessly incorporated into existing systems. The acceleration in TaaS adoption is driven by several key trends in the travel industry:
Intense Competition for SMB Customers—Post-pandemic, small- and medium-sized businesses have resumed business travel more quickly than larger enterprises. As a result, suppliers are increasingly focused on driving direct bookings from SMBs. Concurrently, more software companies targeting SMBs want to include travel in their service offerings. Financial services companies with loyalty-based credit card offerings and a growing number of travel management companies are similarly inclined, each seeking a competitive edge.
Content Fragmentation and NDC Adoption—An increasing number of content sources are emerging, offering optimal content, pricing and customer experience through direct API integrations. The growth of New Distribution Capability has contributed significantly to this fragmentation. As airlines increase prices in EDIFACT distribution channels and offer attractive benefits through NDC, such as continuous pricing, enhanced fares, and custom negotiated bundles, more corporations are considering transitioning to NDC-ready solutions.
Rising Traveler Expectations—Advances in online shopping experiences in other sectors, including personalization, one-click purchasing, and self-service returns, are shaping traveler expectations. Companies aiming to start selling travel or enhance their current offerings want partners to help meet these evolving expectations and provide continuous innovation to their customers.
Watch for more early adopters to announce partnerships, launch solutions and share their results in 2024. Their work will mark the beginning of a transformative wave in the travel industry.
I can distinctly remember the first time I came across the term “Social Capital”. It was in 2022 whilst facilitating a day-long round-table on Purposeful Travel, driven by Eric Bailey at Microsoft. I can’t remember, of the twenty or so travel execs attending the summit, who first used the term, but I can recall the poignancy of the moment. Not only were we discussing what purposeful travel meant for travel programs and the wider sector, but we were actually building social capital right there and then, among all of the summit participants. The format of the day, the retreat’s remote location, and the mobile signal-free environment were creating deepened relationships at the same time as developing our thinking.
By all accounts, the concept of Social Capital has been around for a while, as this Harvard Review article from 2001 shows. It is essentially a term that describes knowing and trusting people, a currency if you will, representing the depth of relationships between those we seek to do business with. And as HBR says “The term nicely captures the notion that investments in these relationships return real gains that show up on the bottom line.”.
Like all forms of capital, Social Capital needs effective management. It suffers from depletion and requires continued attention and investment. With business travel booming in 2019, the level of investment in our relationships was high, and the Social Capital we had built was strong. As soon as the pandemic hit and travel stopped, the investment we had made in our relationships became invaluable as everyone leveraged relationships to keep their businesses alive. But the Social Capital we had built soon started to deplete, we could feel it in our virtual interactions. As we re-entered the world of travel, our compulsion to meet was unstoppable. We started to see not just why face-to-face was so important, but that the type of interaction and shared experience had a considerable effect on the level of Social Capital built, on the value of the trip taken.
So, Social Capital is a term that perfectly represents why meeting in person, and therefore travel, is so valuable and why we continue to struggle with the concept of ROI for trips. It’s because physical interaction and shared experience created through business travel and meetings may not actually result in an immediate financial benefit, it’s an investment for the future. Amex GBT CEO, Paul Abbott, has talked regularly in the media about the important role of travel in driving culture and the rise of travel from the gathering of teams due to remote workforces. And he’s right, but these aren’t easy forms of travel to quantify the return in terms of immediate and direct, financial ROI. It’s hard to justify a single trip or team gathering in monetary terms each and every time.
But with the EU’s Corporate Sustainability Reporting Directive coming into play this year the focus on determining which travel types bring value to organizations will be under the spotlight, as companies seek to slash travel emissions. And with that, there’s a great opportunity for travel buyers to think more strategically about the value of travel in their organizations rather than focus on the operational delivery.
Smart companies will consider not just which trip types should/shouldn’t happen to drive their business, they will try to increase the impact of trips to amplify the purpose. Trying to help their people manage their Social Capital levels to deliver on both short and long-term objectives will be part of that equation. Knowing when to use virtual vs in-person options, will become a competitive advantage. As will what format that face-to-face interaction takes.
Ever since I first heard the term, the concept of Social Capital has continued to enter my line of sight, in ever-increasing frequency. It featured heavily in a few of the GBTA Ladders pitches I was fortunate to hear last year, where teams from our industry focused on the importance of leveraging travel to deepen relationships and amplify the capital created. It has spawned several startups I have come across which co-incidentally are focused on the same challenges the GBTA Ladders teams faced. And it’s because of this that I believe it defines the era in which we now operate and will gain greater resonance in our sector in 2024. We’ll start to see the term enter regular industry vernacular and start to see companies define products and services that recognize and leverage the principle of Social Capital.
If you think business travel has been under the spotlight already, just wait to see what the next few years bring. Defining the value of travel against the impact it has on people and the planet will come to define us. Let’s face it, it already is. The era of Purposeful Travel brings with it an understanding of the importance of building and maintaining human relationships, to help companies achieve their future objectives. Social Capital is what we are about. Relationships aren’t just valuable in our sector, they are the very reason we exist, to deepen relationships in all the sectors our industry serves.
Travel for small meetings rose dramatically in 2023, demonstrating a growing demand for teams to gather for critical brainstorming, teambuilding and strategy-setting sessions in world that is still coming to grips with remote work teams. As the CEO of a remote-first company, I have witnessed firsthand the transformative impact of smaller-sized meetings: They not only enable spontaneous interactions and spark innovation, but also improve employee engagement and encourage inclusivity, especially when teams normally work in an asynchronous environment across multiple time zones.
When we think of more traditional meetings and events, grander spectacles such as annual all-hands, sales kick-offs or gala dinners spring to mind. I think of those events as the visible part of an iceberg, whereas small meetings have, until now, largely floated unnoticed below the surface. As such, they also typically fall outside of managed M&E or travel programs, with little visibility or oversight.
Many companies I have spoken to are surprised by the tremendous growth of small meetings last year, but I’m not. And it really goes deeper than bridging remote-work gaps, and for me, it’s twofold:
A study from American insurance company Cigna estimated the annual cost of workforce loneliness in the U.S. is now approximately US$154 billion, precipitated by lost productivity at work and increased spending on physical and mental healthcare. Approximately 53 percent of Americans who work some hybrid hours report having a hard time connecting with coworkers when they are remote, according to the Pew Research Center.
As companies come to understand some of the longer-term negative outcomes for remote work setups, the need to meet in person, unite teams, collaborate, build company culture or close a sale will come into clear focus in 2024. This realization will result in more companies turning attention to the power of smaller meetings to foster community and more collaborative, compelling ideas.
The prospect of more small meetings may not be 100 percent welcome to some organizations. The reason for that is cost—and the true cost of smaller meetings has been overlooked for a long time because they fall outside of managed programs and often are organized by people with varying levels of experience planning meetings. There is little visibility into the time taken to arrange these events or the total costs they add to the T&E budget.
A recent estimate from Custom Market Insights projected the M&E industry would reach a US$1.753 billion by 2032 with a 12 percent compound annual growth rate. I believe this will largely be due to the rise in volume and accountability of smaller meetings.
Given the dispersed nature of work today I encourage company leaders to provide flexibility for teams to get together when they need to. With rising inflation and travel costs, I also encourage companies to review small meeting expenditure and understand how it impacts travel and expense budgets. This is where small meetings technology platforms will a play a big role in 2024. Demand for such platforms—both from my company’s and a host of others—will enter the travel and meeting management mainstream this year, as executives begin to realize the pace and frequency of small meetings is a new reality that needs to be managed to prevent unchecked costs and to increase efficiency in both planning and operating each meeting.
Larger companies with dedicated travel teams may integrate small meetings into existing travel programs and revise travel and expense policies to include guidelines and processes for such gatherings. Doing so will help ensure each small meeting aligns with broader strategic goals. To be sure, managing small meetings strategically—just like managing large events—can’t just be about cost containment; it must always be about optimizing the impact and value of every interaction, no matter how small.
Radical collaboration is the only way forward to deliver what’s next and best for the global business travel industry in 2024.
We know we can do it because we’ve already done it once: In the face of a worldwide pandemic, our industry came together in ways we never imagined we would or could to successfully navigate the fallout, and I would argue we are stronger for doing so. That strength will be critical as we chart our next path forward. We may now have different challenges—and opportunities—but gone are the days when solo or siloed efforts in pockets of the travel ecosystem will be good enough to lay the foundations of the future.
Radical collaboration will involve the entire travel ecosystem: buyers, suppliers, TMCs, tech, governments and travelers. An elevated approach to collaboration will be crucial in shaping a productive, impactful and sustainable industry.
Here are four areas where the global business travel industry can employ radical collaboration in 2024 and beyond:
Education, advocacy and partnering with a common purpose and commitment are critical elements for radical collaboration to have a true impact.
There will always be different—and sometimes opposing—views between the buy and supply sides of the industry (and even within those categories). But that mustn’t stop us from talking. Especially in areas where we don’t agree, by working together we can re-engineer the travel ecosystem through its globalization, governance and partnership challenges to elevate traveler experience and productivity, and ensure equitable benefits for all.
Afterall, the future of business travel—and likely travel overall—depends on us to get the groundwork established for a healthy industry in 2024 and beyond.
BY Laurențiu Bancu
Project management is a discipline with which it is possible to create new things quickly, consistently, and in an organized manner.
If you’re interested in project management, you already are or plan to become a project manager, or you’ve been given this role without requesting it. In this case, you’re an “accidental project manager.”
Whatever the case, learning project management will help you not only in your career but also in your everyday life. Planning a trip, redecorating your house, or starting a new business are just a few projects you might encounter. Understanding project management and how it works will also help you with your projects.
In this article, I cover the basics of the main project management topics. At the same time, each section offers a link to an in-depth article on that topic with detailed information, templates, and actionable advice. The articles are constantly updated with the latest developments in the project management field.
Since there is much information to read and digest, please bookmark this article and return to it whenever you have time or want to dig deeper. Or take one chapter at a time.
You may also take the opportunity to try our Paymoapp and get the optimal tool to project management HERE
Project management is the process and the ability to plan, organize, and execute a project from start to finish. It involves defining the project scope, creating a schedule, managing resources, tracking progress, and delivering the project on time and within budget.
In a nutshell, project management helps deliver a valuable outcome by applying specific strategies and expertise and using specific tools.
The process, or “the project,” is a set of temporary actions to create value through unique processes, products, or services. A project combines tasks, activities, and deliverables to achieve the desired outcome.
Read more about the basics of project management.
The project manager is a professional responsible for overseeing and coordinating all aspects of a project, from start to finish. He must ensure the project is completed on time, within budget, and to a specific quality standard.
You must complete a formal project management certification or program degree to become an accredited project manager. However, not all project managers are accredited. These are accidental project managers because they’ve been attributed this role when no one else was available for the job.
Besides the formal certification, to become a project manager, you must also develop soft skills and invest time into understanding the field you’re working on. The most essential skills are communication and negotiation, leadership, organization, problem-solving, attention to detail, accountability, and critical thinking.
This complete project manager guide offers all the information you need and the step-by-step process you need to go through to become a successful project manager.
Whichever career path you choose, the first thing you do is have a clear understanding of your responsibilities. When you know what you’re responsible for, you have clarity and focus and stay out of trouble.
Although the list is quite long, these are the most critical responsibilities:
Or, let’s put it this way: the stakeholders—the people interested in the project—are happy when the project is completed on time, within budget, meets the agreed-upon quality standards, and, if possible, without too much hassle.
In this article, we look at an extensive list of pm responsibilities and how to ensure you do your project manager job properly.
Product manager and project manager are two roles often mixed up, especially in a tech company. Why? Besides the fact that they sound similar, they also overlap in qualifications and skills. Often, the same person does both jobs (without even knowing it).
Things get clearer after we understand the difference between a product and a project.
A project is often undertaken to create or deliver a product, service, or outcome, whereas a product is the project’s result. A product often requires ongoing maintenance and support, while a project is completed when the goals are achieved.
The product manager role is more strategic. The product manager is the person who sets and owns the product direction, staying with it until the product is removed from the market. He talks to customers to gather requirements, identifies problems, decides which opportunities to go after, creates a product roadmap based on specific features, and prioritizes development tickets.
The project manager role is rather tactical. The project manager takes the product vision from the product manager, develops a project plan, and ensures the development teams hit the goals and deadlines. Simply put, the project manager is responsible for delivering the product within the agreed budget, time, and quality.
This product vs. project manager guide explains the differences in more detail while answering the critical question, “Can you handle both roles simultaneously?”
Each project goes through a set of steps from creation to completion. In theory, there’s a small debate regarding the number of phases: some say five, and some say four. In practice, though, they are the same:
*Some split this into two: the project execution phase and the project and control phase
The first phase is dedicated to determining client requirements and analyzing whether or not you have the essential resources to complete the project.
In the planning phase, you write down the detailed steps needed during the project development life cycle.
The third phase is the most important stage, during which you prepare deliverables and control the evolution of the project.
In the final phase, you close all contracts and discuss what went well and what went wrong in the project to prepare for future projects.
In this guide, we look closer at each phase, and you’ll learn the most important aspects of each one.
Probably the most complex aspect of project management, the methodologies, methods, and frameworks used in project management are constantly changing and adapting.
Projects and teams are very diverse; for this reason, there are a multitude of methodologies that are used in project management.
There still needs to be some clarification about what a methodology, a method, and a framework represent.
A methodology is a set of methods, practices, processes, techniques, procedures, and rules. They contain a series of steps and activities for each phase of the project’s life cycle.
A method is a systematic procedure, technique, or mode of inquiry employed by or proper to a particular discipline. In other words, a method refers to a single action, technique, process, or way of doing things.
A framework is an overview of how the guidelines should be implemented.
While methodologies offer strict principles, a framework is more flexible because it adapts to a company’s needs, leaving room for the project manager to find the best way to complete the projects.
Some of the most popular project management methodologies, methods, and frameworks are:
Read our extensive guide about project management methodologies, methods, and frameworks.
A project charter is a concise document that contains the project’s scope, stakeholders, benefits, and objectives. Its purpose is to give stakeholders minimum but vital information to authorize the project.
Usually, the project manager creates the project charter and presents it to the stakeholders for approval. A misconception is that the project sponsor is responsible for writing the project charter, but sponsors might not have the time or expertise to do this.
You should not confuse a project charter with a project management plan. While the latter is a comprehensive document containing all the details and steps required to complete the project, the project charter is brief (3-4 pages, at most) and doesn’t include all tasks.
A project charter should contain the following:
Check this detailed article about the project charter, where you can also find a downloadable project charter template.
A solid project management plan outlines all the information you need to ensure the completion of the project on time and within budget and scope. Think of it as a detailed map indicating the shortest and safest route you must take from point A to point B.
Its purpose is to help you organize the team’s activity, save time you’d otherwise spend on clarifying misunderstandings, and save money you’d waste on useless resources.
Creating a detailed plan is often the most overlooked step in the project’s life cycle. That’s because you don’t see its purpose, or worse, think of project planning as a bureaucratic time-waster. But even in the case of smaller projects, having a project plan is vital. It gives clarity and, more importantly, as pointed out above, will save you time and money in the long run.
In our extensive guide, you’ll find out if there’s a difference between a project management plan and a project plan or how to create a project management plan step by step. You can also download a project management plan template.
While a project management plan is a formal, approved document that outlines how the project will be executed, monitored, and controlled, the project schedule is a timeline of tasks, activities, milestones, durations, and deadlines.
The project schedule includes a comprehensive list of tasks, who’s responsible for what, what resources are needed, and how long each task takes. It should be simple enough to be understood by all stakeholders yet detailed simultaneously to be followed by those who must execute it.
For complex and long-term projects, PMBOK—a standard terminology and guidelines for project management—defines activities, sequences, and resources as individual processes with inputs, tools, and output.
A simple project schedule, though, looks something like this:
This guide looks at a project schedule’s theoretical and practical aspects.
A resource plan—or resource management plan—refers to assembling resources (people, money, and technology) for a project, allocating and using them in the most coherent way to improve efficiency and contribute to the completion of the project in time and within budget and scope. It is a balance between demand and capacity. The resource plan is the project manager’s responsibility.
To create a resource plan, you always want to start by looking at the tasks that need to be done, as stated in the project management plan.
Regardless of the specific work methodology, effective resource management requires the following:
Effective resource management involves strategically allocating resources to meet business goals and deliver value to stakeholders.
Ideally, the project manager should use resource management software to create the resource plan and make adjustments when necessary.
Check this article to see how you can create a project resource plan and schedule your team step by step.
The project management software provides a comprehensive suite of tools for managing the entire lifecycle of a project. It helps project managers and stakeholders track progress, manage resources, control costs, track work time, and ensure quality throughout the project. Modern project management software features often include task management, resource management, file management, time tracking, and budgeting.
Project management software comes in many shapes, from more general tools to industry-specific. The online reviews platform G2 lists more than 440 applications. While only some of these are dedicated project management software, if you look for a universal and popular tool, there are still at least 50 you could choose from. The rest market themselves as project management software but are insufficient compared to established PM tools.
Some popular project management software include Paymo, Asana, ClickUp, Monday, Teamwork, and Wrike.
If you want to save hours of research and read a comprehensive review of the best project management software you can use for your projects, check this article.
As the name suggests, a stakeholder is a person who has a direct stake in the project, someone who finances, oversees, or executes the project. It can be a project sponsor, manager, team member, contractor, or customer.
The stakeholder management plan ensures you will lead with a plan instead of your heart.
In a nutshell, the plan will determine who the project stakeholders are—even if they’re not part of the project—and how to engage with them before any conflicts of interest arise.
The plan shouldn’t be too complex, or it would end up defeating its purpose. When creating one, you should focus on four things:
Example of a stakeholder register
The following article details each step and provides a template to help you create an accurate stakeholder management plan.
You’ll be asked to take over other projects as your project management career progresses. That happens because the previous PM has been fired or moved or your skills are fitter to handle that project.
What do you do? Where do you start? Here’s a checklist of the things you should do when you face this situation:
In this article, we look at each step in detail. You’ll also find there a free printable checklist.
The project manager’s worst nightmare, project failure, is something you’ll face sooner or later, whether you’re an experienced or novice project manager. Countless factors can cause a project to fail, and sometimes, things might not be in your control. More important is to detect the warning signs in time so you can take the appropriate measures.
Below are the four warning signs you should look for as a project progresses.
The following article discusses these factors that can lead to project failure. You should also pay attention to inadequate team training, unrealistic schedules, low morale, too many useless meetings, or the dreaded scope creep.
Whether you plan to pursue a project management career or you’ve been assigned this role without your will, project management training is something you can’t ignore.
A study conducted by PMI—a not-for-profit professional organization for project management—compared the level of education of underperformers to that of “champions.” The study found that:
Specifically, 77% of project champions had undergone a formal process to improve their project management skills, compared to only 19% of underperformers. This highlights the importance of investing in education and training for project managers to achieve better results. The study suggests that the more educated and trained project managers are, the more likely they are to succeed in their projects.
Depending on your resources and availability, there are many things you can try:
This article presents the best paid and free project management training opportunities you can benefit from.
Project management blogs can be a primary source of knowledge, mainly if project management experts contribute to or own them. Considering their growing number, finding the best ones to follow can be difficult and time-consuming.
We have thoroughly analyzed more than 300 project management blogs and resource websites. Our final list is based on their posts’ quality, frequency, and accuracy.
The four top criteria we used to find the best project management blogs are:
The collection of project management blogs is divided into three main categories:
Check our list of the best 55 project management blogs you should follow.
The Project Management Institute (PMI®) offers the PMP® (Project Management Professional) certification to prepare high-capacity professionals by validating the project leadership skills that employers seek. With a PMP certification, you stand out from the crowd since PMP-certified professionals have a reputation for working in highly successful businesses worldwide.
Obtaining your PMP certification, though, takes work. But when you look at the benefits of having one, it is worth the effort:
If you want to become PMP-certified, here’s a simple 6-step plan you can follow:
This article details all these steps and provides a plan to get your PMP certification in 30 days.
It is estimated that 2.2 million project-oriented roles will be available by 2027 in countries like the US, Canada, Germany, or India. This is an excellent opportunity for those pursuing a project management career.
Another way of gaining project management knowledge is through project management courses and university degrees.
You have several options depending on your location, availability, or budget.
In this comprehensive article, we look at other courses you could choose from and read the opinions of some instructors and professors about them. You’ll learn more about their experience as trainers and see why they think their project management course is helpful for you.
You shouldn’t have an issue understanding these acronyms if you’re an accredited project manager. Yet, if you do project management in your spare time and you’re not familiar with these departments, here’s what they stand for and the hierarchy inside a company:
A company can have none, one, some, or all of these departments. Choosing one over the other depends on the degree of help you need and the complexity of your projects. They all fulfill different roles and are placed in separate hierarchical spots.
Large organizations make the switch from smaller departments, like PMOs, to more complex ones, like PPMOs.
This article explains in detail the role of each department.
Project management isn’t just for the experts. As an accidental project manager, you’ll probably encounter terms you’re not familiar with. Understanding these project management terms, techniques, processes, and tools used daily to manage projects is mandatory. Not knowing what these stand for or how to use them can cause confusion and delay a project until all misunderstandings are fixed. This is why it should be easy for everyone to know when and how to use these.
