So here’s the good news. Corporate travel managers expect travel volumes to increase in 2015, according to AirPlus’ 2015 International Travel Management Study. But here’s the bad news – a third of those travel managers said “mobile payments won’t be relevant” in the space – despite the fact that corporate travelers are the mobile device’s best friend. And, according to AirPlus’ Managing Director and Chairman Patrick W. Diemer, data is the silver bullet. Why? Diemer told MPD CEO Karen Webster that the integration of mobile with payment travel solutions would really take travel data consolidation and corporate card programs to a more global and seamless level.
KW: According to AirPlus’ recently released International Travel Management Study, 2015 is going to be a year filled with more travel. With that in mind, what are your perspectives about the use of corporate credit card programs by organizations?
Indeed, the number of corporate travel managers worldwide who expect travel volumes to rise again in 2015 has increased. Compared to 31 percent in 2014, 35 percent forecast more trips in the upcoming financial year. 41 percent of travel managers anticipate no changes compared to 53 percent year over year, and 17 percent expect travel volumes to drop. The 2015 study is the first to emphasize the link between a nation’s economic situation and travel managers’ expectations regarding business travel. Despite the crises in many parts of the world, on a global scale more travel managers expect the economy to have a positive impact on business travel compared to 2014. Year over year, this percentage has increased from 14 to 18 percent.
Since 2005, AirPlus has been asking travel managers worldwide about their views and expectations of business travel for the upcoming year. The AirPlus International Travel Management Study delivers forecasts as well as insights into the professionalism of managing business travel budgets. This longtime research shows that the professional management of travel costs is an important management task, which can only be fulfilled by particularly analyzing the payment flows for travel spending. Corporate credit card programs are the key to the payment data – only with a professional travel payment solution can companies have a tool to realize effective cost control.
KW: So how are expenses managed, and what are the top challenges faced by businesses today?
Our study shows that companies worldwide are keeping an eye on their travel spend, for it is one of the top expenditures in companies (after production costs and wages and salaries).
There wasn’t a big development since we started our study. In 2008, already 78 percent of the surveyed travel managers did a travel spend analysis. But it is important how this analysis is done for effective cost controlling: the usage of special analysis tools (2008: 35 percent, 2014: 49 percent) shows how much potential there still is for organizations. There’s a difference between small- and medium-sized companies and large corporations: only 39 percent of SMEs are using professional tools in contrast to 59 percent of large corporations.
But even the best tool does nothing if there’s a lack of data quality. The top challenge for companies is to get the payment data worldwide, wherever and whatever their business travelers pay for – only that data enables companies to detect the right measurements. This is what a professional corporate card program guarantees: high quality data, complete and seamless.
KW: Based on your experience, what can be done to make travel management programs more efficient?
We can assume that a professional analysis of travel spending will lead to a more effective travel policy to manage those costs – a professional payment solution is the key element for this. Only with a comprehensive consolidation of payment data can you elaborate an effective travel policy for your company, and only with this policy can you steer the booking and payment behavior of your travelers.
KW: Do you believe that mobile will gain traction with organizations? How and why?
Mobile payments are the future of corporate credit card programs – they will enhance the field of applications we have with the classical corporate payment solution with walking plastic and lodged accounts. The principle of the credit card payment will not change but the possibilities will be much better. By integrating the corporate travel payment solution into the smartphone of the traveler, the data consolidation reaches a next level.
Today, mobile solutions are available to support the business travel process all the way from travel planning to settlement of invoices. Frequency of use, however, varies between process segments. Our Travel Management Study shows that for companies across all the regions, mobile check-in is by far the most relevant mobile application. In contrast, the use of mobile payment and credit card management solutions still is at a very low level. Even though a large number of new mobile payment functions and diverse applications for managing credit card transactions online were introduced to the market many years ago, their use by business travelers is not yet widespread.
This is due to the extreme hesitation of users who do not frequently use mobile payment applications for private transactions. In addition, many companies have stringent regulations regarding the mobile applications in place. But assuming consumer behavior will extend to the business travel sector step-by-step, mobile payment will become part of our everyday lives. When we asked if these corporate survey respondents had already implemented a mobile payment solution or if they planned to do so, 66 percent of interviewees gave a positive answer.
Still, one third of travel managers answered, “Mobile payments will not become relevant.”
Therefore, payment providers are tasked with convincing corporate customers of the benefits of mobile payments for cost management and compliance, and assuring the security of these payments.
To get the full results of AirPlus’ International Travel Management Study, download the whitepaper here. For a better understanding of how virtual payments can be leveraged on a business trip, view Airplus’ video here.
Patrick W. Diemer
Managing Director and Chairman, AirPlus International
Mr. Patrick W. Diemer serves as Chairman and Managing Director of Lufthansa AirPlus Servicekarten GmbH and is responsible for Strategy, Marketing, Sales and HR as well as all activities concerning the international expansion of AirPlus. Mr. Diemer serves as Chairman of the Executive Board at AirPlus International. He has held senior roles in a number of organizations including PRODIGY Inc; Commerzbank; and Visa International in Germany where he was General Manager. He concentrates his activities especially on international sales: The foundation of a subsidiary company in Switzerland and of a Headquarter in Hong Kong were very successful as well as the diverse strategic partnerships with airlines, car rental companies etc. Mr. Diemer served as General Manager of Visa International in Germany. He serves as a Member of the Advisory Board at Commercial Cards and Payments Limited. He serves as a Director of The Universal Air Travel Plan Inc. He is member of the Advisory Committee of the Marketing Club in Frankfurt as well as member of the Board of Directors of Travel Industry Club (Frankfurt).