We’re officially (more than) half-way through 2023. Crazy…right?
Over the last six-or-so months, we’ve all been tasked with rethinking how we book and manage business travel.
And we all know (and are being reminded of at seemingly every turn these days) – that’s no easy task.
The travel industry is running full speed ahead on an industry-wide rebuilding marathon.
From where we sit, things don’t look to be slowing down anytime soon.
Recent technology updates have only intensified the race to implement some of the changes that were already in the works in years past. Like the NDC. And single-system, holistic program management. And improved travel data for Risk Management/Duty of Care/Personalization initiatives.
Not to mention the completely new tech entering the industry and bringing with it completely new processes, expectations, and rules.
With the busy travel season upon us, the widespread, overarching changes to a once-familiar industry are leaving many travel managers… and their travelers… feeling lost and overwhelmed.
Mostly because they are no longer certain they’ve done everything they need to do.
Or that they’ve done it the way it needs to be done now.
It’s hard to feel prepared when you aren’t sure you understand the rules. As such, we felt it’s time for a recap on what’s been happening (and what still might be coming) this year.
Looking for a travel update for something that’s going on right now in the industry?
Here’s some of the highlights (and lowlights)…
Travel Update – New Distribution Capability (NDC)
Earlier this year, American Airlines moved forward with its controversial plan to make about 40% of their fares/rates available only through an NDC connection. As expected, dozens of major airlines quickly followed in their footsteps. That left most Global Distribution Systems (GDSs), third-party technology partners, and TMCs (like us) – and the airlines themselves – working to fill in the technology gaps of the record-fast transition from legacy GDS to NDC.
Airlines that are implementing NDC fares have continued to reach agreements with GDS suppliers to provide this new content through traditional channels. For example, Air Canada agreed to offer their NDC fares through both the Amadeus and Sabre GDSs within the last few months. Other major airlines, like United Airlines and Virgin Atlantic, also made deals with GDSs suppliers to distribute their NDC content soon after rollout.
On the other side of this change, new surveys found that most travel buyers “do not support” the transition to NDC fares and feel airlines are moving too quickly for the industry to keep up.
The American Society of Travel Advisors (ASTA) is pushing for government intervention on American Airlines’ strategies. ASTA president and CEO Zane Kerby met with the Department of Transportation (DOT) and sent letters to the Department of Justice (DOJ) surrounding price differences between NDC and traditional GDS content. Kerby was “hopeful that our regulators in Washington will take a really hard look at this,” as fares limited to American’s NDC channels continue to range from 20% to 120% lower than fares sold through GDS or EDIFACT based channels.
Travel Update – COVID-19 mandates
While pandemic restrictions are mostly long gone, vaccine and testing mandates remain in place in over a dozen countries around the world. Even the U.S. didn’t lift vaccine requirements for international visitors until mid-May.
That said, most countries will now allow visitors to enter without showing proof of COVID-19 vaccination or test results. Those travelling to certain destinations in Africa, China, South America, and the Middle East may need to have their vaccine card or test negative prior to arrival. Many locations/destinations expect masks to be as well.
You can always check the Gant Gateway or our weekly recap emails for updates on these rules.
Travel Update – Customs and borders
If you’ve travelled internationally at all in recent times, you might’ve noticed that the process to get through customs in many airports has sped up. A LOT.
More countries are upgrading their border gates to include facial or fingerprint recognition. This allows travelers who use an e-passport (or have a U.S. passport with a chip icon stamped in gold foil under the “United States of America” lettering on the front cover) to pass through customs in just a few minutes. That means… No more customs lines. No more face-to-face interviews. And sadly… No more passport stamps.
The U.K. is one of the latest countries to announce they will “fully digitize” their borders over the next few years. International visitors will be expected to receive government permission and pay an entry fee of £10 (or $12.59 USD) per applicant starting this fall. As part of their new Electronic Travel Authorization (ETA) system, anyone without a current visa is going to need to fill out the application for travel online prior to arrival. Those who are approved for entry can remain in the countries for as long as six months.
What about US passports?
U.S. passport wait times are now sitting around four months or longer due to “unprecedented” demand for international travel. Americans hoping to go abroad in late 2023 or 2024 should complete their applications as soon as possible to avoid mishaps. Turnaround times have been extended at least 3x already this year.
Why is it taking so long? In addition to the demand spike, the State Department (DOS) is short-staffed and currently working to rehire workers in positions that were affected by the COVID-19 pandemic.
Unfortunately, you can expect these delays to get worse throughout the summer travel season. Check out our recent passports blog to see what you can do to shorten the waiting period.
Travel Update – Rising prices
Experts warned us that travel prices were going to increase along with demand in 2023.
They were right.
It has been quite an expensive year for the travel industry so far. The cost of an average trip rose about 9% this spring alone.
Hotels have led the charge as prices keep going up, breaking record after record in the first two quarters. STR and Tourism Economics predict that the average daily room rate in the U.S. will be $154.28 this year, which is 3.5% higher than 2022.
Luckily, airfare costs seem to be going down. At this time last year, flight tickets were approximately 13% more expensive. Plus, domestic airfare dropped again significantly over Independence Day weekend.
Travel Update – Operational issues
Not only have severe weather and wildfires disrupted air travel across the world this year, but operational issues are also causing more frequent delays and cancellations for just about every major airline.
Recent storms led to thousands of delays and cancellations ahead of holiday travel. In addition to the weather disruptions, United Airlines CEO Scott Kirby blamed the Federal Aviation Administration (FAA) for the impact on customers, citing that “the biggest issue with us is Air Traffic Control. Every day, we wake up with Air Traffic Control delays.”
On top of these Air Traffic Control delays, the FAA experienced an overnight system outage at the start of this year that delayed over 10,000 flights within, into, and out of the United States. Government officials paused all domestic departures for a couple hours as a result of the failure. According to reports, the system, which allows pilots to receive safety notices before scheduled flights, has since been updated to “prevent a corrupt file from damaging a backup database.”
Travel Update – Staffing shortages and contract negotiations
But… the FAA and the US Dept. of State aren’t the only organization facing staffing shortages and technology mishaps. Many airlines and airports have struggled with a lack of workers since the pandemic began. Part of the reason for the current disruptions to air travel systems is because virtually no one has enough staff to keep up with the demand.
Air travel also isn’t the only sector of the travel industry that’s faced staffing shortages. Hotels, TMCs, travel agencies, car rental companies have had to deal with the impact of the lack of workers. So has pretty much every other type of travel vendor/supplier/advisor.
In fact – new reports discovered that more than 80% of hotels in the U.S. still don’t have enough staff members. Data from the American Hotel & Lodging Association (AHLA) shows that most hotels have been unable to fill their open positions for some time. Approximately 26% of respondents said that these staffing shortages are “impacting the hotel’s ability to operate, with housekeeping remaining the most critical staffing need.”
To make matters worse… Contract negotiations between pilots, flight attendants, and other crew members have stalled at some major airlines.
While United Airlines and American Airlines are moving closer to reaching agreements with their pilots on new contract terms, pilots at Southwest recently voted in favor of authorizing a potential strike after more than three years of negotiating with leaders.
Multiple European airlines and their workforces are also in ongoing contract negotiations and wage disputes that may continue to disrupt summer travel throughout the continent. Pilots and other crew members have planned or carried out strikes in several countries, including France, Italy, Spain, and Sweden.
Prepare for potential disruptions as a result of these strikes.
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We’ve experienced a ton of changes (and challenges) so far this year. There’s a good chance they’re just getting started, too.
Not to sound like a broken record (or a pandemic-era commercial) … but this new reality is in fact the new normal for business travel. At least for the foreseeable future.
Staying up to date with industry changes and proactively managing a fiercely dynamic travel program are the only viable and actionable paths forward.
…if you’re looking to mitigate stress and control your budget, that is.
On the brightside… #teamgant is here to help you navigate the travel industry no matter what comes our way.
Not a Gant client yet? Get in touch at [email protected] whenever you’re ready to talk.
Not quite ready to reach out yet? Read other recent posts linked here and here to see what else we can do for your experience and ROI.
You can also see what the Champion, Finance, and Traveler experience looks like here at Gant Travel.
