Could company-paid leisure travel be a new distribution channel?

Finding and retaining talent has become increasingly challenging for many industries in the post-COVID world. So much so that according to a recent BBC article more and more companies offer to pay towards the cost of the employee’s vacation, including famous brands like Calendar.

As post-pandemic travel booms seem to have faded, any chance to increase sales should be welcome for travel companies. But how should the industry respond to what could become a new B2B2C distribution channel? Some employers will choose to reimburse only the employee’s expenses up to a certain allowance, but many offer real travel products, which means either it must be directly or – more likely – they bring a third party to organize this.

If you are a supplier, a travel intermediary or a technology provider, there is opportunity here if you can create products that this new niche needs that are distinguished from other sales routes.

In some places, this is already happening

In some parts of the world it is not an innovative development as it might seem. In France – where Digitrips is headquartered and I live – employers with a staff base of more than 50 already give a percentage of their salary to benefits and welfare benefits, allocating about 50% of that to leisure and travel.

That is partly because France has one of the higher staff turnover rates in the world; Companies need to be innovative and generous with perks. We also have rules that make this advantage attractive – as part of the country’s long-term commitment to improve access to travel for all, it is not taxed.

In addition, it is forbidden for an employer to ask employees to work during their vacation time, so there are no hidden catches with the offer of such benefits. Companies in other countries looking to offer free travel perks to staff could learn from and replicate France’s model.

We also do not forget that many travel professionals, certainly those who work in hotels or airlines, might already be familiar with the idea of ​​free travel products as an employee benefit.

The price of suppliers – a game of comparison

For travel intermediaries looking to enter this growing space in markets where it is new, consider a B2B2C sales strategy. Targeting corporations with the right travel packages will help you reach a new audience of travelers. Travel intermediaries should enroll corporations as direct customers and work with them to determine the rules and conditions of benefit allowances and what travel options are available. Bespoke is the key word here, though; no two companies will be the same.

Of course, price will always be important too – especially at a time when the cost of global travel is so high. Employees should be sure to pack as much as possible into the employer’s travel schedule. While there will be a certain level of loyalty to using white label portals, in part because in many cases travelers are required to buy through the portals to qualify for the benefits, they still want to know that they are getting the most value. from his advantage

Based on our experience with such programs, the average amount of baskets of these types of portals is typically higher than that of online consumer travel agencies. However, travel packages should still be competitively priced – consider how special branded fares and offers may be tailored to certain groups of employees.

Duty of care, an accessory income opportunity?

Some may argue that vacation benefits could create care problems for employers. But companies do not need to participate in the personal time of their employees, nor should they seek to control every aspect of it through such plans. Therefore, in most cases and predictable markets, this should not be a problem.

however, responsible employers may instead seek to provide optional assistance to employees on their vacations – presenting an opportunity for travel management companies to offer corporate care services as an accessory .

For example, a travel management company could offer video medical consultations for employees before their trips or a help service while they are away. As with insurance products, a company can negotiate a good rate and perhaps one that includes all employees, regardless of health or personal circumstances (something that individuals sometimes cannot get for a reasonable price for the age or medical conditions).

Adopt white label channels

To enact such a plan, a personalized and secure voucher system is the easiest way, while a more complex option would be to create a complete loyalty program dedicated to employees. Employees will be given an allowance – or they can earn points – and then they can burn it by booking travel through the system. This already exists and works, but it relies on having a large employee base and must be managed carefully.

A white label travel portal – an online booking engine that allows travel agents to sell flights, hotels, transfers, sightseeing and other travel products under their own brand – would be the most effective way to market the travel under such a plan. There is an opportunity here for travel intermediaries to adapt their technology towards employee travel plans, and for travel companies to sell expertise and support alongside it. There is certainly room for technological innovation around this new trend – the more common it becomes, the greater the demand for adaptable and attractive systems that can offer employees a consumer-friendly booking experience.

Needless to say, travel providers want to put their content on these portals as they do with loyalty programs. The potential market could be huge.

a new way to encourage sustainable travel

Another consideration is sustainability. Flights are subject to increased scrutiny and offering travel plans to employees can go against a company’s sustainability goals. However, it is difficult for employers to control what their staff do during their private time. What we can see more of is companies financially incentivizing employees who choose sustainable travel options such as rail or eco-hotels.

In conclusion, this is a trend worth exploring for providers and intermediaries (and even technology providers). It’s a great way to diversify and open up new revenue streams. Of course, it will require careful consideration, innovation and planning to carve out a successful niche in this area, although the rewards could be significant for those who can think in the long term.

About the author…

Emilie Dumont is general manager of Digitrips.

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