“Businesses should be prepared for anything.” That was the counsel Rohitesh Dhawan, KPMG’s Brexit Centre of Excellence director, imparted during a panel discussion he led at the Business Travel Show about the impact Brexit will have on corporate travel.
Interestingly enough, Dhawan’s six words of wisdom very well could have been uttered in any of the panel discussions at the three-day conference in London, where everything from the “evolution of crisis management” to the “future of urban mobility” was explored.
If there were one overarching message of the show, which wrapped up Feb. 23, it’s that change is a-coming.
With a record turnout at this year’s event, which drew more than 7,500 industry professionals, it seems like travel buyers and suppliers already know that and are eager to find out more.
For those who couldn’t make it to what is the corporate travel event in Europe, here are a few interesting takeaways.
Brexit + Donald Trump
Not surprisingly, Dhawan’s panel discussion was a popular one at the convention. Everyone wants to know just how Britain’s exit from the European Union (EU) may affect them.
Well, the answer isn’t great. According to Dhawan, air travel into and out of the United Kingdom likely will fall 3 to 5 percent by 2020 because of Brexit.
The goods news is, Britain will experience a bit of a spike beforehand.
The sharp devaluation of the pound following the June 2016 EU referendum vote has made British companies an attractive mergers and acquisitions (M&A) target for businesses based elsewhere in the world.
“In the last few months, we’ve seen an uptick in M&A and that is forecast to continue, so there will be an uptick in corporate travel,” he said, according to a Travel Weekly report.
When asked what issues would most affect travel management companies, Dhawan said: “One is the volatility of the pound. Companies have to plan for that now.”
If all goes according to plan (which, if you have been following the news, may not) Britain’s exit from the EU should be finalized by the summer of 2019. Stayed tuned!
What may have an even greater effect on corporate travel? The travel bans imposed by U.S. President Donald Trump. “There has been a significant drop in arrivals to the U.S.,” Dhawan said, concluding, “That might overshadow any effect Brexit might have.”
Is business the new first class?
Airline Passenger Experience Association (APEX) made an astute observation about what was MIA at this year’s Business Travel Show: first-class cabin products.
APEX noted that of the 44 airline stands at the exhibition, only two, American Airlines and United Airlines, exhibited cabin products—both of them business class.
Hmm, very interesting.
And when you connect the dots of two industry news stories, it certainly seems like first class is taking a backseat.
First, Lufthansa announced it will launch an all-new business class seat for its Airbus A350 fleet in 2018 without a first class suite. Then, Qantas revealed its plans to unveil in October 2017 its new Boeing 787-9 Dreamliners, which offers a business class cabin with flat beds and privacy dividers. Conspicuously missing from the mix: a first class cabin.
So, what exactly is the point of upgrading to first class when you can get pretty much the same perks in business? We don’t know either.
‘B’ is for blockchain
If blockchain—the rapidly emerging digital ledger technology behind Bitcoin and other cryptocurrencies—isn’t on your radar, it’s time to check your antenna. The technology poised to revolutionize the way the travel industry conducts business was a hot topic at the show.
“Blockchain is a highly auditable process that documents transactions, locks them, and makes them unchangeable,” Amon Cohen explained in a Business Travel News report.
“The technology issues each transaction block to both the buyer and seller, including information like buyer and seller identities, transaction details, the value of the buyer’s digital wallet from which payment is taken, and the unused balance returned to the buyer.”
Blockchain, by design, is inherently resistant to data modification. Once recorded, the data in a block cannot be altered retroactively.
Johnny Thorsen, a speaker at the show who was touting the technology, said blockchain could make expense reporting obsolete and will make self-regulating ”smart contracts” commonplace in travel procurement in 2018. It also can eliminate the need for credit cards since transactions are completed instantly using a digital currency, such as bitcoin.
As Thorsen, senior director of value services for SAP Mobile Services, suggested, “If you are a travel buyer, this is a time for you to go and knock on your CFO’s door and say, ‘Why don’t we use my area to test these new capabilities?'”