Business travellers face scarcity
Business travellers are eager to go abroad on business again. Our account managers hear this from VCK Travel customers every day. Research by ANVR, IATA and McKinsey, among others, also endorses this. COVID-19 still gets in the way of that, because travel restrictions don’t always make it easy to travel internationally. The safety and health of travellers are the most important issues in this regard. But is there another problem, we have to deal with scarcity.
Travel today is characterized by scarcity in many areas; scarcity of employees and scarcity of materials and facilities. There is hardly any unemployment and many employees have gone to work in other industries. Thus, a scarcity has also developed in the labor market of the travel industry. And then in our industry we are also talking about means of transportation. Here too there is a scarcity and without planes, trains and rental cars we won’t get far abroad. All kinds of issues that affect business travel and create practical problems.
Dealing with rising demand
Our suppliers, such as airlines, car rental companies and international train providers, say there is no immediate problem right now. Planes and trains are not yet fully booked and that is mainly because demand is not yet at its old level. This was also indicated by CBS in August. Despite the fact that four times as many people boarded a plane via a Dutch airport in the second quarter of this year as in the same period in 2020, on average only 44 of the 100 seats were occupied. Within Europe, planes do tend to be full, but intercontinental occupancy is much lower than average. But what will happen when demand rises? Can the travel industry cope?
Lower frequency and capacity affects flying
Airlines are pretty much back to flying the full network, but still less frequently than you were used to, or with much smaller aircraft. KLM indicates that they can easily scale up if demand increases. The fleet is large enough and there is a flexible on-call workforce. At other airlines, there are worrying signs. Some are struggling with a shortage of pilots, who have been laid off in recent times. It is still unclear how any vaccination requirement will affect available staff. But also parts of the fleet may have been sold, making scaling up difficult. Due to this scarcity, there is a good chance that ticket prices will rise when demand increases. On the other hand, airlines are very flexible in their booking policies. We see therein that many continue to push their conditions further and further forward, as it becomes clear that we will continue to have to deal with COVID-19 for some time to come.
International by train is still different
The ICE trains to Brussels and Berlin are following their normal schedules, but the Thalys and Eurostar are still limited. The NS, which offers these international trips, recently reported that the trains are not yet full and that frequencies can be scaled up if necessary. However, service on board international trains has been cut. If you want to eat or drink something on the train, you will have to bring it yourself or buy it in advance at the stations. This is because the bar and/or restaurant in the international train is not yet available.
Car rental is difficult due to shortages
The rental fleet has also shrunk tremendously from car rental companies due to COVID-19. Companies such as Hertz and Avis say that their fleets have been matched at a rapid pace with the virtually stagnant market. They often have short-term contracts and could easily get rid of their rental cars. Now that demand is starting to pick up, the market is facing a limited supply of new cars due to delivery problems. The global chip shortage plays a role here, as it means that far fewer new cars can be delivered than before. And what is delivered also has to be distributed among all those rental locations in many different countries. This can mean that sometimes the right car is not available that you wanted to rent in advance, or even more annoyingly, that there is no rental car at all at your destination.
Hotel accommodation and business dinners
We all know the stories about the hospitality industry where there has been a huge walkout. This has affected occupancy in hotels and restaurants. Anyone who has ever eaten out or booked a night away at the moment has noticed it for themselves. There is less capacity in hotels and restaurants. Employees are busy and waiting times are often longer than before. This applies not only in the Netherlands, but also abroad. The stay at a foreign destination can also be different because of this.
Noticeable price increases
We note that in many areas there are higher prices and rates than before. The old economic law, that when there is scarcity, the price rises, is noticeably current. Airfares are sometimes much higher and when there are crowds, prices will rise further. It is plausible to assume, that this will be emphatically noticeable in the coming period.
Personal and professional advice
We also notice the consequences of COVID-19 within our organization. We see that making a booking currently takes exceptionally more time, due to all the travel restrictions. The complexity of business travel during corona requires an adapted service. We are asked many more questions when making a travel request than in the past. And that makes sense, because uncertainty and concerns about health play a major role. More than ever, our Personal Touch, which is so characteristic of our services, gives you the assurance of professional advice.
Travel well prepared
Travel has become more complicated and will remain so for some time. For the time being, business travel is not yet possible in the old way, is not yet at the old levels and also not at the old prices. We expect to face bottlenecks around scarcity for quite some time to come.
With our Personal Touch, we are available to you 24×7, to personally take every travel request and pick out the right options for you and your travellers. Especially in this day and age, it is important to travel well prepared and that is where a Travel Management Company helps you. That is what we are good at and happy to do for you.
Are you not yet a client of ours, but would you also like to experience our Personal Touch? Then contact us and experience it yourself.
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