The Sharing Economy Is On The Brink Of Disrupting Business Travel

The Sharing Economy Is On The Brink Of Disrupting Business Travel

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A lot of investment will occur in the business travel industry in 2015, 6.2 % more than last year investment. The competition has evolved, focused on new technology use, therefore traditional vendors are forced to adapt their supply.

From a BtoB point of view, for companies that manage corporate travelers’ fees (travel managers), new services that work on a sharing economy system as Uber or AirBnB are switching the formal system.  Travel managers used to make deal with traditional services companies for their corporate travelers: airlines, hotels chains, car rental companies… These relationships were resulting in perks and attractive prices depending on the number of travelers and were really advantageous in comparison to leisure travelers’ prices.

But corporate travelers using the sharing economy services in their personal lives know the advantages to do so, and tend to use it more and more in their business travels. It is more convenient and cheaper than the services provided by the company’s travel platform.

It has several consequences, first the volume of travelers might be insufficient to sustain the perks and prices for companies. Then the insurance policies does not work the same with traditional services than with sharing economy services and most of the time the insurance does not cover the latter. In case of safety problem it could transform into financial abyss for travel managers.

It results in dilemmas for travel managers, if they do nothing and let business travelers use the sharing economy services, it could be cheaper but they will lose the perks and price hardly negotiated and will face a high safety risk. If they force travelers to use traditional services they will create conflicts and conflicts with employees are rarely positive.

This article conclusion makes the statement that traditional travel services will have to evolve for business travels because of the popularity of sharing economy services. The author assume that sharing economy services will evolve to fit the safety issues and that they are also able to negotiate advantageous prices and perks with companies. So they will be many changes due to new technologies that challenge the formal system, all these changes will create a cost decrease and winners will be travel managers and business travelers. 

This article highlights several issues regarding the impact of IT on tourism. Indeed, sharing economy has become possible thanks to the spread of ITs and the worldwide potential networks. The problem is that legislations are struggling to cope with the incredibly fast evolution of technologies. As explained above, one of the main concerns would be regarding safety. Legislation on the insurance policy for the services provided by sharing economy companies is still very blurry and incomplete and it represents a risk for travel managers and the companies they are working for.
It is essential to realize that today trends are dictated by the consumers more than by companies, and if business travelers are used to using some services in their personal life they will be more likely to keep their habits even on their professional travels. A good example is the use of apps such as Uber or AirBnb. It is just one touch away from the consumer, being available directly on his/her mobile device, and this practicity is, as much the price, a key decision factor. Why waste time and energy to go through the company's rental car process, when it is so easy to get a uber cab ? Today keys to the service industry are velocity and practicity. The whole travel industry is facing a major shift and travel managerss will have to follow it. If they want to perpetuate the formula used so far (company offering deals negociated with major travel companies), they will have to embrace that shift and maybe consider proposing an app to the employees, on which they could easily and quickly book a flight or a cab on the behalf of the company during their business travels.