In this extended interview we speak to Clive Wratten, Chief Executive of Business Travel Association, which also featured in our Travel Monthly Review Show February. He guides us through
Trends and market behaviours in Business Travel
Key challenges in Business Travel for Corporates and Suppliers
Why late payments is a key campaign
Partnership with the Tourism Alliance
Role of technology in business travel
Upcoming events
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Programme Notes
This episode has been automatically transcribed by AI, please excuse any typos or grammatical errors
Ryan Haynes:
Hello and welcome to Travel Market Life. I'm your host, Ryan Haynes. And today's extended interview. We are speaking to Clive Wratten, the Chief Executive of Business Travel Association. Now he featured in our Travel Monthly Review show for February where we looked in bit more detail at business travel. In this conversation today, we learn about some of the trends related to business travel, the challenges that the industry is facing, and what the business travel Association is doing to support its members and the wider industry.
Ryan Haynes:
Travel Market Life is backed by Haynes Marcos, a B2B marketing communications, PR consultancy, specializing in the technology travel, hospitality and property sectors. Marketing, PR and social build profile gain, momentum shape strategy with Hanes MarComs
Ryan Haynes:
Hi Clive. Thanks ever so much for joining us today. So, looking at the business travel sector, there's been huge amount of developments and change over the last couple of years. What are the key trends and market behaviours that you're actually seeing in the market between for 2023 to 2024?
Clive Wratten:
Yeah, hi Ryan. Thanks for having me on. Yeah, I mean, it's been a really good 2023 for the, for the industry. It came back very strongly. The trend has been people getting back to business travel, which is, you know, hugely important for the industry and for the wider e economy. I think some things have changed and trends for 2024. Obviously, we are chatting quite early in 2024, so, you know, there's still a bit of question over what will happen, but I think what we have seen is business travellers really getting back, doing longer trips away rather than quick round trips. Two reasons for that. One, clearly from a sustainability perspective, and the other is really around cost and time and wellness of the individuals.
Clive Wratten:
So yeah, there's definitely a trend to longer trips and I dare I say it blended with some leisure time. I'm never going to use the word that as being counter that because it just sticks in my gut. But, so yeah, that's really positive. We're back to pretty much close to where we were pre pandemic in terms of revenues, you know, depending on who you read anywhere between sort of 85 to 95% of where we were in 2019. But the interesting underlying fact under that right now is that that is really driven by yield or cost increase. So, passenger numbers are slightly down, but yield and the cost of everything, as we all know in our daily lives has gone up. So there, there is a higher cost of everything resulting in that revenue figure being close to, than maybe the passenger figures were to the, the pre pandemic levels.
Clive Wratten:
But, so that's strong, certainly a trend towards premium travel, bizarrely enough if you look at it that way. But again, that links to the wellness and what we've learned out of covid and business travellers and Corporates who very much important about the duty of care and wellbeing of their employees are, are really looking at that. And a and a shift to premium economy, which is a, a relatively, our product's been around quite a long time, but really beginning to gather momentum in the, the aviation space. So that's quite interesting. And whether that will continue, I think the, the future of 2024 really reflects that. The issues are that, you know, sadly we have a lot of global instability and that always puts a question mark on what could or might not happen.
Clive Wratten:
But I think we also have that, you know, the cost increase is a concern for business travel that that's going to impact at some point. I mean, particularly in hotels, and I don’t know if you, you've tried to get a hotel in London, for example, at the moment, you, you just can't get anything under about 300 pounds a night. We were even trying to book a, what was called a, a budget chain, and it was over 300 pounds a night at a peak period. And, and that, you know, it spells good for a short term, but longer term, in my opinion, that spells that either, you know, there's going to be a bit of crash in pricing or the market will slow down by passengers not, or sorry, people staying in hotels. So there, there's some interesting trends out there from that perspective. But overall, the trend is back, and I just have to say, sorry, the next question is, it's really important that we get the message out that traveling for work is not just about people traveling for meetings.
Clive Wratten:
It's going to fix things; it's going to play sport. It's, it's lots of things. So, there's, you know, it's not, you can't replace all of that because it's not a meeting. As we're chatting over a, a video call today, you know, physically it has to happen. So, we need to make sure that business travellers both, you know, tends to be priced, but also gets to return on the investment.
Ryan Haynes:
It's fascinating. I mean, I've been speaking to a number of hoteliers and, you know, the, the, the price rates, as you say for hotels have been going up and up and up, and a lot of that's been down to inflation, you know, costs, staffing, a lot of issues in there whilst obviously trying to grab what they possibly can from the market while the market's willing to pay for it as we go into 2024. You know, it's interesting your observations there and you know that those costs, and as you mentioned, it's the increasing costs that are affecting businesses. What are some of the other key challenges, perhaps business travel and Corporates need to be aware of within the travel industry that, that, that you feel could really impact sort of the way business travel can be, you know, effective and, and, and that could be disrupted anymore?
Clive Wratten:
Yeah, well I think the, the big one that we see as the issue we're all grappling with is distribution. Now, you know, it is referred to you a mar modern airline retailing and, and not another three-letter acronym, but that applies right across, you know, the product set within business travel. And indeed, in leisure is companies, airlines, hoteliers, trying to win business direct, which has an impact on many of the things we're talking about. not least TMCs, but duty of care reporting, carbon reporting, the whole trip management piece. And I think the, the move of the airlines and you know, I will say NDC, you know, 15 years in and it still hasn't achieved something. And this year we are seeing it in the conversations we are having with our travel management members, but also with their customers that it is a huge sense of frustration.
Clive Wratten:
Something that is going to run and run through 2024 and a source of much frustration, but also a source of much opportunity if the whole industry could actually finally sit down and say, how does this work for everybody in the supply chain instead of trying to look after number one all the time. And, and you know, it's quite sad in some ways that during the pandemic everybody worked together because we had a common interest, survival. Now we come out, it's about scrambling back to the top and I think hopefully we can learn from that. And around distribution is, is a recognition that there is a supply chain, it works and the most important person it works for is the end customer and we need to get our stuff together. I was going to say another word then get our stuff together to, to make it work.
Ryan Haynes:
Yeah, I mean there's been a lot of new developments, not a new technology, a lot of different direction in way that the industry as a whole, the infrastructure has, has adapted, evolved over the last few years. The direction of Digitalisation. Do you think there's been a lack of, of that real sort of community focus within the industry to actually tackle some of these bigger architectural, I guess ways of having, you know, looking after the industry in a way that's actually going to be profitable and, and, and allow us to scale for the future? I mean, as you mentioned, it's this idea of distribution. You know, are people having enough conversations on these very foundations of the industry?
Clive Wratten:
I think it happens quite widely in pockets between various parts of the supply chain supply and a lot of progress has been made and there's a lot of opportunity and Digitalisation is good and everybody sees that. I, I think where the issue is, is, is the real end to end is it's rare and it's something, you know, I take responsibility for at the BTA is trying to bring that whole chain together to have that discussion right the way through rather than, you know, the left hand not talking to the right-hand kind of scenario that we've seen. So, I think it's really critically important because I've always described it that the industry, and I'm talking about business travel here purely of course, but the industry's been in Civil War for 15 years, really. And you know, the people that we are fighting over don't really care.
Clive Wratten:
They don't want the war, they just want us to, to set peace and make it work for them. And I think we need to really push that forward and we will continue to do that this year of saying, come on, we need to, to make this work. I think it's a big ask if I'm honest, but if we can get it in pockets, then hopefully naturally it spreads and the whole system becomes a lot easier to move forward because we all need to be profitable clearly, and we all need to be able to invest and improve in the future. And that only comes if the whole chain works together in a really cohesive way and we need to improve that. So, I think it's happening, but it a whole lot more could happen.
Ryan Haynes:
I mean one of the great things from the pandemic is that you saw organizations like yourselves, the associations really come into their own and represent their members. You know, you're more than just a group of people happy clappy having conferences, you know, you, you actually represent your members and, and look at some of the issues and particular you've been challenging the industry around late payments. Can you tell me about this campaign and, and how you are looking at things being done differently?
Clive Wratten:
Yeah, I mean I think this is really interesting coming out of, again, the situation we found ourselves in where there was no business that, you know, really customers were very supportive through that to make sure their partners survive. But what we saw over the last 12 months was Corporates and who come out to bid for A TMC to run their travel manage program or one that was existing and saying, sorry, you can't actually bid or you can't carry on unless you extend our credit terms from 60 days to 90 days. And we even had some that were demanding 120 days credit. So, it's kind of weird in this modern world where on the leisure side, everything's done by credit card, over 60% of transactions in the travel management world are still on credit.
Clive Wratten:
So, either you invoice and you wait for the payment to be made. And if you extend, you know, from 30 to 60, 60 to 90 and even beyond that is crippling for our industry as everybody in it will know that, you know, a huge amount of it is air travel and on BSP you buy an air, you sell an air ticket and you have to pay regardless of what you do, it's taken out your bank seven days or 14 days depending on what your terms are with BSP. If you don't have to invoice and wait for 120 days, that's a massive hit on cashflow. In fact, an untenable hit on cashflow. So, through our government lobbying, we spoke to Minister Holland Rake, who is the Minister for small business and he gave me an audience and we were chatting to him and he introduced us to Good Business pays, which is an organization set up to challenge this.
Clive Wratten:
And so, we worked in conjunction with them about how that could work and they do a naming and shaming of those that are really poor and they you to your phase a happy copy those companies that pay very quickly. So, we wrote a white paper to help our members when challenged by Corporates to say, you know, do 60 days or 90 days or you don't get our business is say, well you know, this is just not right. And, and the good news is that campaign now the government have on the statute book rating to go through a maximum payment term that will become law hopefully at some point and not too distant future for when paying small companies. It doesn't apply to huge companies. But yeah, many of our members will be treated as SMEs and I think we just have to have respect in business, right?
Clive Wratten:
There's a lot of respect being lost in the world in my humble opinion, but one of them is in business and if you, you've got a service, then you should be ready to pay for it and pay for it as quickly as possible. And again, that of course helps your TMC in our instance reinvest that money because they're not chasing the cash and provide a better service for you ultimately as you move forward. So, it's a, it is a classic win-win for everybody and we're really, you know, keep working with good business plays and they're using the template that we put together with them beyond the travel industry into other areas as well. So, we were very happy to, to help and really great to get government help and guidance to, to lead us to that.
Ryan Haynes:
I mean I certainly would welcome a maximum payment term because there are times where, you know, yeah, if, if even, you know, my customers can take months even to release the cash and you know, as you say that it's just not fair on small businesses that, you know, their cash flow is pretty tight. Now, at the end of last year, you got behind the Tourism alliance. What does this mean for BTA and its members?
Clive Wratten:
Well it was really good. I was chatting to Richard at Tourism Alliance about, you know, business travel and, and you know, he said, well, why don't you join? And of course, the Tourism Alliance is very much about bringing inbound tourism to the UK and all of the service sector around that. And, and it was like, well where does business travel play in that? But of course we do. We have a, a massive part in that, in that, you know, we run conferences here in the UK travel within the UK and you know, I personally believe that collaboration is a good thing. They didn't have any representation for business travel within that sector, so it seemed a natural fit. So, it gives us a chance to hear from our peers in other sectors. You know, a wide and varied sector which you can learn from, everything from caravan through to big venues is, is really important to pick that stuff up from.
Clive Wratten:
And it gives us a unified voice into government as well through their lobbying, which we were very happy to add our piece into. And you know, we encourage and always have done as much collaboration across the industry as we possibly can, but remembering there is always nuances. It, it's a wonderful industry to be in because there's a zillion different parts with a zillion different issues, but so many of them are concentric circles and it's those pieces that we need to, to pick on and that's why we think being part of the Tourism Alliance this year will really help us and we, we had to help them as well.
Ryan Haynes:
I mean it is fascinating. It's like, as you mentioned at the beginning, how business travel, the concept has massively diversified but also, you know, how we consider ourselves what business travel is, whether it's, you know, daily traveling for work, whether it's conferences and events or whether it's, you know, longest days at other offices or, or clients and meetings and all sorts. And the, the importance of having that face-to-face connection, there's, there's know the digital nomads right through from those who want to take those combined vision business and leisure trips. Just another question here, Clive, that, you know, I'd be interested to, to get an idea as to where thinking is I've heard in particular in especially in related to business and leisure trips, there could be an issue there particularly with the likes of tax offices, HMRC, et cetera, of how they sort of recognize that as an expense between business and leisure.
Ryan Haynes:
Is that an issue you're currently seeing for any of your members or businesses themselves of, you know, how, how they're sort of categorizing this and whether that's considered an additional benefit or a tax relief for the business or their employee?
Clive Wratten:
It is actually, yeah. We, we've had some conversations very much around the tax implications of people working anywhere overseas to, to the individual and to the company's liability. And that is something that is kind of snuck under the radar because it was a lovely thing to do and if you're a big corporate, you've got all the governance and you are across this, but if you're a, yeah, a relatively small business or a or a small travel management company says, yeah fine, go and work in Tene for whatever you want to do for three or four months. It doesn't matter. Wouldn't be top of your radar to realize the tax implications around that. And you know, it kind of snuck up on people that that was an issue. So, we've done some seminars with some of our legal partners to help our partners in that, in that area.
Clive Wratten:
And I also think we are still kind of getting to grips with the implications of if you are, you know, going on a trip and we're seeing much more of it, as I said, staying on for the weekend or even bringing your partner along for the trip, maybe being paid personally, but staying in accommodation that have being paid for the company. All of those things, you know, do have a, a potential knock on effect and it is really, as I say, the large Corporates fairly comfortable with it. The others is a job of our members to educate their customers around it. And I'm not for a moment claiming that we are experts and that's where we turn to other partners within the industry to help us. But all of these things are brand new, really post pandemic and it's the job of the industry and Association such as ours to educate both members and their customers around it.
Clive Wratten:
So, we will be working on that through the year as well. Because you, you're right to bring it up is an issue.
Ryan Haynes:
I mean it's fascinating. I've been working, you know, as a, as an independent consultant now for 15 years and it's one of the things that I was sort of aware of and certainly much more aware of in recent years that, you know, if you've got a two day conference but it's a five day trip, you're taking, you know, there's only 40% of that trip you can really claim for business that the rest of it I is under leisure. So, it's great that you've got, you know, quite a number of events and forums that you run with A BTA. Now, a couple I just want to focus on here is firstly, you know, let's a tech, you do a technology one. Can you tell me about the role of, of tech within business travel?
Clive Wratten:
Well, it is huge. I mean most of our members are technology companies these days. That's what is the backbone of, of business travel and, and a real key part. And that, you know, has seen a huge amount of investment in difficult times to make sure that it, that it moves. But technology touches every piece of the, the chain that business travellers do. Same, same for leisure but there's a lot more of it in business travel because you've got pre-trip approvals right away through to carbon reporting, all done through digitalisation, then apps on the move for changing bookings and moving them. So, technology is, is absolutely critical when we spend a lot of time looking at technology and there is constant, we do an innovation hub usually twice a year, sometimes more.
Clive Wratten:
We are bringing new products that are coming in technology products 99% of the time into the business travel sector. And I think that, you know, this is, this is great, there is a piece of technology for everything in business travel, but that also leads to a problem that you can see, you know, I think 15 different companies doing 15 different things with each, with their own bit of kit that has to be fed into a central API or onto an online booking tool to be able to feed in it. So, it creates its own problem. The sheer spread of technology and it's something we were talking about this week in the technology is, you know, how do we pull it all together and what technology is coming round to say actually here's a piece of technology that pulls all the technology in together to give you the TMC it all in one place.
Clive Wratten:
And that's where we've got to, there's almost a technology intermediary or an aggregator situation developing because there's just too much to go. So yeah, it's exciting but at the same time it creates a lot of, a lot of issues because everything that comes in people want, even though sometimes you may only use it once or twice a year in some of the instances of the product that is out there. So yeah, it's complicated, but it's exciting to see it move but never will we ever lose the human touch because it's a human business. Right. And that's, that's the biggest thing we always say. Technology will wipe it out still. The first thing that happens is if you really want reassurance or you want to feel good about yourself as you talk to a fellow human and that will never go away.
Clive Wratten:
Absolutely.
Ryan Haynes:
Now you have your spring conference coming up on the 11th of March 2024. What can we expect and what are the key talking points?
Clive Wratten:
Yeah, sure. It's not far away now, which is why I'm losing even more hair than, than I have already when you get close to these things. But yeah, really excited about this. It's the, the theme of the pro of the conference is progress and we've linked it to a manifesto that we created just before Christmas. We got in early to send to the whole of Westminster, whichever political persuasion you've got. So, we are really focusing on rail industry is a big part of business travel. I spend a lot of time in the rail sector and we have Lord Adonis coming to speak who is ex Minister of Transport has some very outspoken views as I think you would've seen before Ryan on the railway and particularly around HS two, which we were, you know, very disappointed on the way it's moved.
Clive Wratten:
But equally pleased that some of the, the mayors are suggesting a private investment might get it to actually go somewhere where it needs to go. So, we've got rail very much on the agenda, really excited. We generation BTA, I don’t know if you, we have a shadow board which is middle managers that shadow our exec board. So, we are doing a session with them on what the industry needs to do to change, to be more attractive to bringing new people into the sector, whether straight from school from uni or more mature that want a career change. We've got a bit of a marketing job to do in our industry post the pandemic because it, you know, everything being closed and people going, well that's a bit of a risky place to come or whatever. So, we're having a really good session.
Clive Wratten:
They're great. The enthusiasm and passion they have for the industry is really good, really excited. Also, we've got shy, the CEO of Virgin Atlantic who coming in to do our second keynote and he'll be talking around the progress version of May post the event and also around their SAF progress with the flight. I was very lucky to be on the first SAF with him and lots of other bits and pieces. We've got the classic ai, we're doing a legal perspective on ai, who owns the data. He gets in trouble if you do something wrong with AI, which is a bit scary on occasion. So that should be fine. And we're doing a bit of government stuff in what we need to do in a general election year.
Clive Wratten:
We've got actually the Tourism Alliance and airlines UK on the stage with me and our government advisors just chatting that through. So quite a wide and varied agenda and some other, some other stuff. So, I'm looking forward to, to that day. It's all fixed up now, kind of sorted and should be a good day.
Ryan Haynes:
Excellent. Fantastic. That does sound like a packed program. Clive, thank you for taking us through all those questions today. I really appreciate your insights and hopefully that would be beneficial to our listeners. Much appreciated.
Clive Wratten:
Pleasure. Thanks for having me.
Ryan Haynes:
So that was Clive Wratten, the Chief Executive of the Business Travel Association. For more of our podcast, please head to your chosen podcast channel, whether that's Spotify or Apple, or head over to LinkedIn, Travel Market Life and follow our latest updates. I'm your host, Ryan Haynes. Thanks for listening. Ciao for now