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The Forces Shaping Business Travel

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Today’s business travelers are more mobile and connected than ever before: they work from the hotel, or even the plane; they attend meetings across town, or across the country. Lyft and Skift teamed up to look at how mobile habits, the changing demographics of the workforce, and the rise of the sharing economy are shifting the corporate travel landscape, and how business travelers are becoming more independent than ever before.

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The Forces Shaping Business Travel

  1. 1. THE FORCES SHAPING BUSINESS TRAVEL Skift Data Deck A curation of charts and stats illustrating the trends impacting business travel worldwide.
  2. 2. HABITS OF THE MODERN BUSINESS TRAVELER 2 Overview The Forces Shaping Business Travel Data Deck paints a picture of the business travel landscape and the trends impacting the business traveler of the future through a curation of charts, stats, and data. We’re looking at how mobile habits, the changing demographics of the workforce, and the rise of the sharing economy are shifting the corporate travel landscape, and how business travelers are becoming more independent than ever before.
  3. 3. HABITS OF THE MODERN BUSINESS TRAVELER 3 Section 1 6 Business Travel Outlook Section 2 11 Mobile + Booking Habits Section 3 19 The Future Of Work Section 4 26 Rise of the On-Demand Economy Executive Letter 5 Table of Contents Conclusion 32
  4. 4. HABITS OF THE MODERN BUSINESS TRAVELER 4 About Lyft About Skift Lyft Mobility Solutions is bringing safe, on-demand ground transportation to thousands of organizations. Give your team more affordable, reliable rides wherever work takes them. Our account managers will work with you to build a custom solution and keep it running smoothly. Your team just downloads the app, and gets matched with a local driver at the tap of a button. Visit Lyft.com/work to learn more. Skift is the largest industry intelligence platform providing media, insights and marketing to key sectors of travel. Through its daily news coverage on Skift.com, industry- leading Trends Reports, and SkiftX content studio, Skift is defining the future of travel. Want to work with us? Email skiftx@skift.com.
  5. 5. HABITS OF THE MODERN BUSINESS TRAVELER 5 Designing Travel for the New Traveler In and outside of the Lyft community, we’re seeing a new type of traveler emerge. One who makes flight changes on her smartphone en route to the airport, schedules dinner with an old friend after her last work trip meeting, and embraces visiting new cities. We’re proud to partner with Skift to offer insights into the behaviors of modern business travelers. Today’s employers manage teams who are more diverse, global, and connected than ever. However, it’s difficult to update travel programs at the same pace as team profiles change. The result: Over half of travel transactions made by millennials are not compliant with their company policies. Corporate travel programs — services, spending, and safety programs — need to evolve to fit modern business travelers’ lifestyles or they’ll find a workaround. Through the Lyft platform, we help our partners access safe, affordable rides that are custom fit to their individual needs. From small businesses to Fortune 500 companies, we’re helping teams integrate ridesharing solutions into their travel programs every day. The uncertainty that comes with a quickly changing, connected travel landscape also brings a huge opportunity. Suppliers who are creating solutions for plugged-in travelers can create smarter solutions based on vast amounts of behavioral data those travelers leave behind. We now have close to real-time visibility into traveler trends, and can keep improving custom solutions as more usage data surfaces. Through data-driven solutions and conversations with partners, we’ve introduced a line of new product offerings for today’s business travelers and will continue to make them better. We look forward to seeing more innovative solutions to keep travelers safe and happy, however they choose to travel. David Baga Chief Business Officer Lyft Mobility Solutions
  6. 6. HABITS OF THE MODERN BUSINESS TRAVELER 6 Section 1 Business Travel Outlook Around the globe, spending on business travel is increasing with 2016 expected to be a record year. The biggest growth is in the Asian market, with China leading the way and edging out the U.S. in business travel spending for the first time. On the American front, spending associated with ground transportation adds up to the greatest business travel expense for U.S. companies.
  7. 7. HABITS OF THE MODERN BUSINESS TRAVELER 7 Spending on Business Travel Will Continue to Grow SOURCE: GBTA: 2015 Total travel spending: $1.25 trillion 8 7 6 5 2015 +6.5% +6.9% +6% +6.4% +5.8% 2016 2017 2018 2019 Slow but steady growth is predicted for business travel around the globe. Companies are taking a more mindful approach to business travel, factoring in rising transaction costs and sending employees on less international trips.
  8. 8. HABITS OF THE MODERN BUSINESS TRAVELER 8 Top Global Markets for Business Travel Spending SOURCE: 1. GBTA: 2015 2. GBTA: 2016 China United States Germany Japan United Kingdom France South Korea Italy Brazil India $291 $290 $64 $62 $47 $37 $32 $31 $31 $30 2015 Total BTS ($ Billions USD) 2 China edged out the U.S. in business travel spending for the first time. 95% of China’s business travel spending is for domestic travel. United States China Japan Germany UK France South Korea Brazil Italy India $288 $262 $62 $58 $44 $36 $32 $32 $31 $26 2014 Total BTS ($ Billions USD) 1
  9. 9. HABITS OF THE MODERN BUSINESS TRAVELER 9SOURCE: 1. Asian Business Traveller Survey 2015 2. Amadeus 2013 Asian Business Travel Is on the Rise Business travel spending in Asia-Pacific makes up 38% of the global business travel market. 2015-2018 business travel in this region will grow 4x faster than in the U.S. and more than 2x faster than in Europe. From 2011-2030, there will be a 400% rise of female business travelers coming from Asian-Pacific countires.
  10. 10. HABITS OF THE MODERN BUSINESS TRAVELER 10SOURCE: GBTA 2015 Meal Airlines Miscellaneous Lodging Gas Cell Phone Car Rental Supplies Taxi Shipping Tolls Parking 19% 17% 17% 14% 11% 5% 5% 5% 3% 2% 1% 1% What U.S. Companies Are Spending Money On Spending associated with ground transportation - gas, car rentals, taxis, tolls, and parking - adds up to the greatest business travel expense for U.S. companies at 21%, more than both meals (19%) and airlines (17%).
  11. 11. HABITS OF THE MODERN BUSINESS TRAVELER 11 Section 2 Mobile + Booking Habits Travelers around the globe are reliant on their smartphones, and business travelers are the biggest offenders. Better coverage and faster service are enabling travelers to stay constantly connected, allowing them access to information and the social universe while on-the-go. While mobile booking is still slow to catch on, business travelers are increasingly integrating smartphones and tablets into every step along the travel journey.
  12. 12. HABITS OF THE MODERN BUSINESS TRAVELER 12 Business Travelers Never Put Down Their Phone SOURCE: 1. Adara 2014 2. GBTA 2015 97% of business travelers carry at least 1 mobile device.¹ 78% say that access to Wi-Fi is vital to their work and expect it wherever they go, including hotels and airplanes. 2
  13. 13. HABITS OF THE MODERN BUSINESS TRAVELER 13 Reliance on Mobile Means Leisure Travelers Never Unplug SOURCE: 2015 Expedia/Egencia Mobile Index Over 50% of travelers check in on work at least once a day while on vacation. 23% of travelers have purchased inflight WiFi on a leisure trip in order to connect to work. 84% of travelers worldwide want to access information from anywhere while they travel. 60% of travelers say they agree they never truly “unplug” on leisure trips.
  14. 14. HABITS OF THE MODERN BUSINESS TRAVELER 14 Business Travelers Are Using Mobile To Research Trips... SOURCE: Travel + Transport 2016 69% of business travelers turn to the web to research travel. 64% start their booking process with Search.
  15. 15. HABITS OF THE MODERN BUSINESS TRAVELER 15 But Not Necessarily Book… SOURCE: 1. Travizon 2015 2. GBTA 2015 Laptop computer Desktop computer Smart phone Tablet None of the above 58% 43% 39% 25% 13% Always Sometimes Never 2% 37% 59% How often do you book business travel on mobile? 1 Top Devices Used to Book Hotel Accommodations for a Business Trip in the Past 6 Months: 2
  16. 16. HABITS OF THE MODERN BUSINESS TRAVELER 16 Deciding Factors for Travel Purchasing Decisions SOURCE: 1. GBTA 2016 2. Expedia/Egencia Mobile Index 2014 3. Phocuswright 2016 33%Convenient schedule When it comes to booking flights, convenience and cost are key. 1 When it comes to booking accommodation, amenities matter. 2 56%of travelers report that WiFi availability and pricing impact their purchasing decision when selecting a flight and hotel. Price 27% Frequent flier miles and status / Travel reward points 20% When ordering a ride-sharing service over a taxi, business travelers ranked convenience and ability to order from their phone key decision factors.³
  17. 17. HABITS OF THE MODERN BUSINESS TRAVELER 17 Average Booking Window for Business Travelers SOURCE: 1. Concur 2016 2. Carlson Wagonlit Travel 2016 50.6% 25.0% 16.9% 7.5% 2015 Booking window 1 15+ days 8-14 days 4-7 days 0-3 days The booking window for business travelers has remained steady over the years with the most common planning time of 15 days. Though, a study from Carlson Wagonlit Travel found that female business travelers book 2-4 days earlier on average than their male counterparts.2
  18. 18. HABITS OF THE MODERN BUSINESS TRAVELER 18 In Mobile Apps, Business Travelers Really Want Utility And Convenience SOURCE: 1. Travizon 2015 2. Expedia/Egencia Mobile Index 2014 Real-time flight info Instant itinerary access / sharing Please, don’t give me more apps I’ll never use Weather / travel alerts Local language translation Other 52% 19% 13% 9% 1% 6% Email/messaging Camera/video recording Maps/navigation Social media Weather Utility (alarm, calculator) Entertainment 61% 50% 47% 45% 38% 33% 24% What are the most useful features in a business travel app? 1 Top uses for mobile on the road: 2
  19. 19. HABITS OF THE MODERN BUSINESS TRAVELER 19 Section 3 The Future Of Work Things are changing in the American workforce. With more than 1 in 5 employees determined to leave their job at some point in 2016, it’s clear that the U.S. worker has become more independent than ever before. Led by the rise of the millennial workforce, which as of 2015 makes up the largest portion of the labor pool at 54.5 million and counting, and technology making virtual collaboration nearly seamless, employers are at a crossroads between the 9-to-5 careerists of yesterday and the liquid workforce of tomorrow. Reexamining business travel and corporate travel policies will be key for recruitment and retention of highly-skilled workers in the evolving work landscape. Here are some of the factors making workers more independent:
  20. 20. HABITS OF THE MODERN BUSINESS TRAVELER 20 The Shift to a Service-Based Economy SOURCE: Bureau of Economic Analysis Finance, insurance, real estate, etc. Government Manufacturing Professional and business services Educational services, health care, etc Wholesale Retail Information Arts, entertainment, food service, etc. Construction Transportation and warehousing Mining Other services, except government Utilities Agriculture, forestry, fishing, and hunting $3,293 $2,186 $2,080 $2,005 $1,388 $999 $956 $802 $623 $611 $490 $449 $361 $287 $269 Service Industry Production Industry Gross Domestic Product by Industry in 2013 (Billions of Dollars) Goods-producing jobs have diminished and service-based jobs have become the norm. In fact, four of the five high- est-grossing U.S. industries today are service-based.
  21. 21. HABITS OF THE MODERN BUSINESS TRAVELER 21 Technology is Enabling Productivity and Freedom SOURCE: Adobe 2016 Cloud-based communication technology is enabling workers to collaborate seamlessly. From across the office to across the ocean, technology is fueling the worker’s need for independence, productivity, and flexibility. 81% say technology that helps them connect to colleagues more efficiently is important to their ideal workspace. Workers believe technology makes them more productive (85 %), improves work-life balance (70%) and would make their workday better and easier (74%). 60% say tech gives them the freedom to work where and when they want.
  22. 22. HABITS OF THE MODERN BUSINESS TRAVELER 22 Technology Has Even More Promise for Future Workers SOURCE: 1. PwC 2016 2. Adobe 2016 53%think technological breakthroughs will transform the way people work over the next 5–10 years. 1 64%of people around the world believe that tech will improve their job prospects. 2 53%of menial office tasks will be done by a machine or technology in the next 20 years. 2
  23. 23. HABITS OF THE MODERN BUSINESS TRAVELER 23 Millennials Have Overtaken the Workforce 2015 Millennials had an estimated spending power of $2.45trillion, 1 of which $226 billion was set aside for travel. 2 2020 50%of all business trips will be taken by millennials. 3 2025 Millennials make up 75% of the workforce. 4 SOURCE: 1. UMass Dartmouth 2015 2. Hotwire 2014 3. BCG 2013 4. Amex 2014 5. PwC 2011 75% of millennials believe that access to technology makes them more effective at work. 5 41% of millennials say they prefer to communicate electronically at work than face to face or even over the telephone. 5
  24. 24. HABITS OF THE MODERN BUSINESS TRAVELER 24 Millennials Are Spending More on Business Travel SOURCE: 1. BCG 2013 2. Expedia 2013 60% more likely to report buying flight upgrades like extra legroom and in-flight entertainment during business trips. 1 Millennials spend 13% more on airline tickets than non-millennial business travelers. 1 37% spend more on room service when their companies are paying, compared to just 21% of 46-65 year-old business travelers. 2 Millennial business travelers are utilizing downtime on business trips to experience the local scene and are increasingly extending their time in-destination for microvacations. The convergeance of business and leisure (painstakingly known as "bleisure") is a rising force that mobile- minded workers have latched onto.
  25. 25. HABITS OF THE MODERN BUSINESS TRAVELER 25 Lines Are Blurring Between Business and Leisure Travel SOURCE: 1. Bleisure Report 2014 2. Virgin Atlantic Survey 3. GBTA Business Traveler Sentiment Index 2015 Business travelers want to mix leisure with trips. 83% use time on business trips to explore the city they’re visiting. 1 65% percent extend business trips to explore a new country. 2 67% say it’s important to be able to extend their business trips for leisure. 3 But their travel policies don’t always allow it. said YES were UNSURE said NO 14% 27% 59% When asked if their company had a corporate travel policy about “bleisure” travel1:
  26. 26. HABITS OF THE MODERN BUSINESS TRAVELER 26 Section 4 Rise of the On-Demand Economy Broadly defined, the On-Demand Economy is an online marketplace in which technology companies connect consumers with immediate goods and services. With the press of a button, users can hail a ride, rent a room, hire a handyman, or order takeout from rated, customer-approved sources. The immediacy and transparency of the on-demand services have re-engineered consumer behavior. From more reliable ground transportation to more cost effective lodging options, business travelers are increasingly embracing the On-Demand Economy.
  27. 27. HABITS OF THE MODERN BUSINESS TRAVELER 27 Annual On-Demand Economy Spending SOURCE: 1. HBR 2016 2. Intuit QuickBooks Survey 2015 Average spending per year in billions of $US $35.5 5.6 4.6 8.1 3.8 Other services (i.e. Task Rabbit, Elance) Online marketplace (i.e. Ebay, Etsy) Transportation (i.e. Lyft, Uber) Food/grocery delivery (i.e. Instacart, Seamless) All other categories As of 2015, the On-Demand Economy is attracting more than 22.4 million consumers annually and $57.6 billion in spending.1 The On-Demand labor market will grow by 18.5% a year over the next five years and by 2020, 7.6 million people will be working in the On-Demand Economy. 2
  28. 28. HABITS OF THE MODERN BUSINESS TRAVELER 28 2010 2011 2012 2013 2014 2015 (Projected) Investor Funding ($M)* $57 $392 $371 $672 $4,124 $15,140 Investment in On-Demand Economy is Accelerating SOURCE: CB Insights 2015 More investment in this category will yield even more innovation and present new opportunities for business travelers to be more productive and independent.
  29. 29. HABITS OF THE MODERN BUSINESS TRAVELER 29 Growth of Ride-Hailing vs Taxi vs Car Rental SOURCE: Certify 2016 55% 8% 37% 50% 25% 25% 40% 46% 14% Q1 2014 Q1 2015 Q1 2016 Ride-Hailing TaxiCar Rental 23% decline in 2 years Taxis have seen a 23% decline from 2014-2016 as consumers opt to use ride-hailing services instead. According to data compiled by Certify, taxi fares were found to be 55% higher per ride than Lyft. Users also show higher levels of satisfaction using ride-hailing services when compared to taxis or car rentals.
  30. 30. HABITS OF THE MODERN BUSINESS TRAVELER 30 Airbnb’s Growing Impact in Business Travel SOURCE: 1. Airbnb 2016 2. Certify 2016 Most Popular U.S. Cities for Airbnb San Francisco Chicago Seattle Oakland New York Most Popular International Cities for Airbnb Vancouver (Canada) London (UK) Toronto (Canada) Mexico City (Mexico) Sydney (Australia) Since July 2015 - 50,000 employees from over 5,000 companies have booked for business travel. Companies saved an average of 30% on accommodations and travelers are staying twice as long overall, claims Airbnb.1 Business travel spending on Airbnb grew 261% in the U.S. and 249% overseas in between Q1 2015 and Q1 2016.2
  31. 31. HABITS OF THE MODERN BUSINESS TRAVELER 31 What business travelers want What corporate travel policy allows Business Travelers Have Embraced the On-Demand Economy SOURCE: Travel + Transport 2016 of travel managers have received significant or fair amounts of interest in ride sharing services from travelers 77% travel managers say corporate travel policy does not address the sharing economy 70% allow travelers to expense ride sharing services 70% of allow travelers to expense Airbnb 18% of business travelers are considering Airbnb for their next trip 34%
  32. 32. HABITS OF THE MODERN BUSINESS TRAVELER 32 Conclusion As the demographics of the workforce change, the millennial-led demand for flexibility and work-life balance is forcing an evolution in the way companies approach business travel. We’re at the start of a new era in which business travelers are given the freedom to design business trips the way they want. With mobile technology and the On-Demand Economy becoming more advanced and seamlessly integrated into our everyday lives, the rise of the independent business traveler is just beginning.

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