FCM Travel Solutions has released the results of its State of the Market report, revealing the impact the COVID-19 pandemic has had on corporate travel.
The State of the Market report forms part of FCM’s commitment to lead companies out of the COVID-19 crisis through a number of customer pledges that set the benchmark for the ‘new normal’ in business travel.
“This month, FCM pledges to help customers ‘maximise their travel budget’. After a period of intense financial challenges, FCM commits to help save customers money when it comes to corporate travel,” says Bonnie Smith, GM FCM Southern Africa.
The uncertainty of the virus and its impact on individuals, communities and businesses, became evident very quickly as different scenarios unfolded globally from January 2020. Since April 2020, 66% of businesses said they had to make changes to their organisation’s structure, while 33% of businesses saw a headcount reduction and office downsizing, the report revealed. Large global enterprise businesses, FMC’s main customer base, were more likely to have restructured and reduced employee numbers.
Only 13% of businesses indicated that they would not have to make any changes to their financial targets in the year ahead. Unfortunately, in difficult economic times, corporate travel and expense is often seen as the number one cost item that businesses can quickly dial back. ‘Travel & Expense’ was named as the common item to be reduced moving into 2021, followed by ‘Office/Building Expenses’ and ‘Workforce Restructures’.
Only a quarter (26%) of businesses said they are planning to return to the same pre-COVID-19 levels for domestic travel during 2021. The remaining 74% of businesses predicted reduced domestic travel for the immediate year ahead.
Smith warns, however, that reducing travel can have a considerable negative impact on the growth of a business. “Ultimately, the focus should not be on cutting down, but rather on maximising the funds available. This is where the FCM Travel Solutions budget pledge comes in. Taking into consideration the intense financial hardships shouldered by local businesses both big and small, FCM Travel Solutions is committed to saving clients money through optimising business travel spend. After all, travel should be seen as an investment.”
To help companies save money, FCM has released a whitepaper on how travel managers can help identify missed savings through the use of data and automation. The white paper includes tips on how to optimise travel programmes and increase policy compliance. Smith concludes: “Now that borders have reopened and travel is resuming, it has become more critical than ever before for companies to have a solid travel policy. This policy needs to include set guidelines around traveller safety, budgets, required documentation and purpose for travel, while empowering employees to use careful judgement when booking and incurring travel expenses. Turn to your travel management company for advice.”