A frigid winter, dipping commodities pricing and improved teleconferencing software have not slowed optimism for the travel or business sectors in Canada, according to senior travel executives at the annual Business Travel Summit in Toronto.
Executives from Best Western International, Egencia, the Hotel Association of Canada (HAC) and Vision Travel Solutions cited the adaptation of online and mobile, personalization tactics and the continued growth of new offerings appealing to today’s traveler as reasons to expect 2015 to be another successful year for Canadian business travel.
Vision Travel Solutions’ senior vice-president of Sales and Account Management Ian Race said that business travel will be up modestly in 2015 – an expected eight percent increase, with Ontario leading the way. Though some business travelers say they have reduced their business travel because of a greater use of tele- and video-conferencing, as well as fuel prices, the projections for 2015 tell otherwise.
In Canada, Best Western’s 2014 numbers were very good with consumed room nights up 6%, revenue up 8%, and the brand set record-breaking revenue per available room (RevPAR) index compared to midscale/upper midscale brands at 114.
Other panelists concurred that RevPAR for the region has remained strong. Egencia vice-president of Supplier Relations Chris Vukelich went as far as to say that RevPAR is currently at the highest Canada has seen for quite some time, driven by the lack of big time growth capacity and continual high demand for business travel. Adding to this, referencing the recently completed Hotel Association of Canada Annual Travel Survey, HAC president Tony Pollard said capacity has been restrained and demand continues to be high.
Though many thought decreasing fuel prices would have a large impact on the travel industry, to date, there hasn’t been a significant impact, and most likely won’t be until the price sustains for an extended period of time. “Logic says if fuel prices fall, airline prices should fall with them, but the reality is that this is not happening and most airline CEOs have no intention of lowering flight costs,” noted Vukelich.
One of the key topics at the panel was centered on today’s traveler and their fundamental needs – fast Wi-Fi, mobile connectivity and personalization throughout their entire experience. In terms of technology adaptation, Canada has traditionally been much slower to adapt with online sales, given different currency and tax structures. The market is now at a turning point and sees tremendous growth in online booking. “For Best Western, more than 50 percent of our volume is booked through the web today,” said Dorothy Dowling, Best Western’s senior vice-president of Marketing and Sales.
Though online sales have adapted at a quicker pace, an even larger change is in store with mobile. To date, mobile is generally used solely for searching, not necessarily for conversion. However, in the next 18 months, the panelists expect that to change as most of what’s in desktop will be handled in mobile.
In the same vein, technology will play an even larger part for business and leisure travelers alike in 2015. Mobile, wearables, drones and in-room/in-hotel experiences are expected to play a major role for consumers as they travel. According to Pollard, “Eighteen to 24-year-olds use their smartphones for everything except making a dinner reservation.” According to HAC’s recent survey, business travelers use their smartphones for three primary reasons: to communicate with friends and family (60 percent), to check the weather (51 percent) and for GPS access or to gather directions (50 percent).
There is also a movement toward the “consumerization of business travel” where companies are challenged by employees who find better deals on their own rather than going through outside resources. Likewise, online booking has significantly reduced the cost for managed travel. “Five to six percent of transactions were booked through an online booking tool five years ago. Today, we’re at 40 percent, which will only grow,” said Race.
Looking ahead, mobile, personalization, and new features appealing to today’s traveler will remain key for growth. Travelers expect brands to know them and know what they want as they travel, whether for leisure or business – or “bleisure.”
To view a video recap of the Business Travel Summit, please visit http://youtu.be/WOqu-Ea9MF4.