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THE EVOLUTION OF BUSINESS TRAVEL ACCOMMODATION

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By Cherry Wang, Country Manager, UK & Ireland, Homelike.

Business travel accommodation is undergoing drastic changes as the sector moves into a new era focused more on travellers’ well-being and health.  Following a year of uncertainty, restricted people movement and the wide adoption of remote working, perspectives of what makes a business trip worthwhile has adapted. Corporate travel managers now need to consider leisure time for the traveller while keeping budgets affordable, with flexible booking policies and wider choices of locations, including beyond traditional commuter cities. 

As the world begins to return to normal, one of the biggest shifts we’re seeing is the significant reduction in budget spend of traditional customers.  Where large corporates once had an almost unlimited budget, these have more recently become similar to that of an SME. The Global Business Travel Association (January 2021) reported that 90% of travel managers and procurement professionals said they think their companies will spend less on travel in 2021 vs 2019, with an average budget decline of 52% 

Visible change in corporate travel

The way companies are considering how they view business travel and its importance is also changing.  Care and attention to the health and safety of employees is becoming a higher priority than the need for face to face contact.  Key changes have included:

Travel policies – More attention into which trips are really necessary for the company and the potential return on investment/risk

Corporate COVID policies – Duty of care is now one of the top elements for TMCs and corporates, with the increased usage of tracking tools and COVID update data.

Cherry Wang

Employee welfareEmployees physical and mental wellbeing has become a top priority, with more autonomy for the travellers to decide whether or not travelling is safe and necessary

So ultimately what does this mean for businesses, employees and the accommodation sector?  Businesses will need to be increasingly flexible in their approach to staff and work locations, and understand that some workers may be more inclined to travel away from home if it can be more of a ‘workation’, where they can take their family along too. 

More hospitality operators are ready and willing to cater for this growing demand, with the introduction of new measures such as subscription stays, where companies can pay a set rate for use of one or more properties without any further costs.  A number of hotels and other accommodation providers have already introduced subscription based offerings to appeal to remote workers and digital nomads. Intercontinental Hotels Group, Marriott, Accor, Zoku, and hostel brand, Selina, are just some examples of hospitality operators embarking on this trend.

In the same vein having a ‘home away from homeis something business travellers are looking for from their accommodation.  This is where apartment rentals trump hotels as they are able to provide all the comforts of home including a deskspace, fast internet and kitchenette, making serviced accommodation and the extended stay sector much more in demand.

Business travel is also keeping alive the accommodation sector in core cities, where a lack of leisure travellers has meant an increase in rooms available. This trend is driven by those who moved away from core cities during the pandemic to secondary cities or even rural locations.  This has ultimately led to a demand for business accommodation in the biggest cities as the return to work occurs and people need to be back in offices in the likes of London, Edinburgh, Manchester and Birmingham.

How we interact with our accommodation providers and ultimately pay for it has also changed considerably in the last 12 months.  Contactless is a trend fuelled by Covid, that will be here to stay.   Businesses have been quick to adapt to this form of technology and communication, creating a seamless experience for the end user.  Most commonly we have seen:

  • Automated communication (text and email)
    • Smart device access to accommodation via app or Link (Hilton have been leading the way on this, also Sonder)
    • Payment and procedures carried out online and digital guest identity checks via an app or digital form (Your Apartments)

The future:

As for where we see the corporate and leisure accommodation sectors in the future, it’s clear many of these latest trends are here to stay. 2021 is likely to still be a year filled with travel uncertainty with continued focus on flexibility, digitisation and safety / duty of care.

We can already see this taking place in the extended stay sector from hotel groups, which has increased their investment in this type of accommodation.  The resilience of the extend stay sector during the pandemic, in addition to the lower operating expenses and higher occupancy rates means that there is a strong pipeline currently under development (see occupancy rates of luxury vs economy extended-stay hotels below)

With this investment, we will see a number of new on-going future trends which will drive forward how the mid-to-long term accommodation sector is utilised and booked.

  • Digitisation: We’ll see more and more companies utilising technology to operate the business from booking through to staying.
  • Flexibility: will become the new normal for corporates and business travellers, especially given the pervasive uncertainty around regulations and restrictions. Insurance policies need to be able to cater to this and the ever changing needs on their customers
  • Blurring of business and leisure travel: It’s time to start thinking of these as one in the same.  As more and more people mix business and leisure travel, we’ll likely see changes in the way businesses are built and operated..
  • Demographic of business travellers: Step away from the views of a business traveller being a typical white collar worker.  Embrace the fact that a huge source of demand will come from alternative sources; people working in entertainment, construction / infrastructure, medical industries.

In summary, it appears that it will be the accommodation providers that will have to be flexible and nimble in their approach to a new era of business travel and accommodation – putting the needs of customers above growth and profitability.  This should in return mean great choice, flexibility and pricing for bookers.

Business

HOW WILL DIGITAL TRANSFORMATION EFFECT JOBS SKILLED IN TECH

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Maria Paola Resta, HR Manager at Auriga

 

The world of technology is constantly evolving, and digital skills are also rapidly changing over the years. The interaction with the end customer is becoming more and more digital since the pandemic, therefore tech jobs, particularly in the banking industry, may need professionals to “humanise” the interfaces used by customers.

 

Tech jobs on the rise

Tech talent is growing, particularly in the Artificial Intelligence (predictive, customer profiling, etc.) sector, and technical skills regarding augmented reality, the user experience, and interface design are also on the rise. The outbreak of the pandemic has led to an unprecedented acceleration in the digitisation of processes, therefore jobs that specifically require knowledge of digital skills has increased in order to meet the needs of customers. Tech jobs remain focused on specialised areas of tech, however as the technology industry is in constant flux, some areas might be in more of a demand in comparison to others.

 

How remote working will affect the tech talent pool

The increase of remote working has already impacted the tech skills business, as the day-to-day working environment now exists in the digital realm. Tech skills are needed now more than ever, and employers have a huge role to play in helping people to continue their personal development while continuing home working. They need to focus on their personal development in order to build the workforce they need for tomorrow’s world.

 

Skills beneficial to the banking industry

There has been a massive shortage of skilled candidates in digital and technology disciplines. IT and financial companies need to upskill existing staff to fill these exciting new roles. In an age of high-frequency change, learning is truly for a lifetime.

In the debate about tomorrow’s skills in the banking sector, the rising value of each employee has often been overlooked. People are a valuable asset as machines take on the more robotic processes, and uniquely human skills come to the fore. How we develop these skills becomes a critical question for employers and workers alike. It will be many years before schools and universities nurture students well versed in these skills.

 

More tech talent required for business digital transformation

The process of digital transformation has already started with some businesses as a modernization process. This has undoubtedly accelerated strongly following the COVID-19 pandemic which forced everyone to overcome situations of technological immaturity and to radically review flows, work processes and models of consolidated business. Digitisation has entered even more pervasively into working life, becoming an essential and permanent condition, and making it necessary to acquire skills that are best suited to the new digital paradigms.

It’s inevitable that companies looking for ways to counteract the effects of the pandemic on their operations will ask their technology function to bear part of the burden. However, they must be strategic about any shifts made to the tech workforce. To ensure that vital digital services remain up and running, organizations must do everything possible to protect mission-critical talent. By showing their support now, companies can create goodwill that will carry over to when better times return.

Another of the direct consequences of remotisation is the emergence of new demands for soft skills suitable for managing collaborations and partnerships as well as specific technological talents that are increasingly specialized to support the new needs of businesses.

 

Tech skills that companies can use for their benefit

The movement towards technological areas are becoming increasingly crucial. Companies must necessarily equip themselves with professionals experienced in cybersecurity and train their people on the adoption of new operating models to protect all internal workflows from possible cyberattacks. In parallel, the need to acquire skills in the cloud, artificial intelligence, automation and user experience fields is growing exponentially in order to adequately support the changes in progress and allow work processes to be increasingly safe, intelligent and functional as well as suitable for supporting the new business models developed by companies following the pandemic.

 

How tech skills will support remote working

Soft skills are essential as they allow remote management and collaboration in virtual environments, but the importance of digital skills is growing. All HR departments are engaged in planning and finalizing training and learning projects whose main topic is information and communication technologies. The high complexity and technological vastness necessarily imply a high level of know-how and specialization in order to guarantee an optimal performance in the production and line areas, unlike the managerial or corporate areas where a disciplinary transversality of skills is generally privileged to allow a global overview.

Businesses have to work in order to build the right talent into the organization as a long-term plan during and after the pandemic, and this might be possible by applying AI, automation, and other exponential technologies to make workflows more intelligent. All of this affords a new opportunity to build better businesses and a better world. It starts with enabling a diverse workforce to perform optimally, and building trust and confidence among employees will be critical. How they are treated now will have an outsize impact on perceptions and value in the future.

 

Maria Paola Resta, HR Manager at Auriga

Maria Paola Resta has been a HR Manager at Auriga since 2018. Her role includes the coordination and overseeing of the group’s HR initiatives. She has a background in occupational and organizational psychology, and has been working in the human resources profession for 15 years. Her role focusses on talent acquisition, people development, training and employee relations. In the last 10 years she has worked in the HR departments of important companies that specialise in Information Technology, and her roles have increased in responsibility as she has progressed throughout her career.

 

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Banking

TO ENABLE BETTER LENDING FOR PEOPLE AND BUSINESSES, WE HAVE TO LOOK TO OPEN BANKING

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By Iain McDougall, CCO of Yapily

 

A recent FCA study found over 14 million people were grappling with financial issues at the end of 2020, representing more than a quarter of the UK adult population. The picture is similarly tough for SMEs, too, which have been impacted hugely by lockdowns, loss of earnings and more; it’s estimated the pandemic will cost SMEs an extra £173,000 in debt per year.

This is resulting in a lack of lending options for both consumers and businesses, as well as expensive or high interest loans, or worse, rejection from lenders all together. This in turn is driving unaffordable lending, and penning consumers and businesses in an ongoing and irresolvable debt cycle – at a time when they need the most support.

One of the biggest causes of this lies in lenders relying on credit scores and credit bureau data to inform their decisions, which simply aren’t accurate enough to truly get the full picture of a borrower’s financial situation.

The case for using Open Banking data in lending decisions has never been stronger.

Data accessed through Open Banking permits lenders to retrieve accurate information about the borrower’s financial history. This can provide more accurate assessments, and therefore enable fairer lending decisions.

 

Credit scores aren’t helping consumers

Take NHS workers as an example. Despite working tirelessly throughout the pandemic, NHS workers make up a sizable portion of the UK adult population currently struggling with debt.

Iain McDougall

An independent report from the University of Edinburgh Business School, in partnership with Salad Projects, found NHS workers are heavily reliant on long-term overdrafts and high-cost credit, where APR is as high as 1,333%. Almost all (93%) respondents said they use one or more types of credit or loan, compared with 75% in the wider UK population (according to the Financial Lives Survey). More than half (58%) use up to three loan providers and 68% use up to four loan providers.

This situation is the result of relying solely on credit scores. While these are the near-universally accepted method of determining credit terms, each credit reference agency has a different method for calculating a credit score. They rely solely on financial history, whether they’ve previously defaulted, or failed to get credit, and not a consumer’s actual financial position, whether they’ve recently got a pay rise or new income, to see how likely it is they will pay back any money borrowed. This can mean, no matter if a consumer’s financial position has changed, they can’t get a better loan because of a previous discrepancy.

 

The challenges facing SMEs

These issues are not just limited to consumers. SMEs, particularly those in the hardest hit industries like hospitality and travel, have struggled to access credit throughout the pandemic.

While many may have been thriving pre-pandemic, their lack of ability to turn a profit during lockdowns, meant they needed extra support. In an effort to keep these industries alive, we saw numerous government backed loan schemes launched, such as the Bounce Back Loan Scheme, to help struggling businesses survive. In total, these schemes have provided almost £180 billion worth of lending to date, supporting over a quarter of businesses in the UK.

However, the soaring demand from businesses in need of these vital funds meant lenders were unable to keep up and many businesses did not receive support quickly enough. What’s more, providers may register these types of loans with credit reference agencies, which means companies that previously had strong credit ratings may see their credit scores negatively affected by any delayed or missed repayments.

This is why it’s vital for lenders to get lending limits right the first time round, so SMEs can avoid potentially adding to their already growing list of debt and thrive in a post-pandemic world.

 

Enhancing lending with Open Banking 

Using Open Banking can add a much-needed layer of trust and loan personalisation for businesses and individuals. By basing credit decisioning on real-time financial data, lenders will be able to create a more accurate picture of their financial situation; and so make fairer credit offers.

Through adopting Open Banking principles, lenders will be able to onboard new customers and grant loans more efficiently, providing businesses with the cashflow required to maintain their workforce and support the economy.

With the borrowers’ consent, it will also give lenders oversight into how the economy is recovering, and enable them to monitor the rate at which the individual or business can expect the loan to be repaid. Meaning they can step in and provide extra support if and when required.

Open Banking provides what credit scores alone simply cannot – real-time insight into an individual’s or a businesses financial position right now, not three to six months ago. By leveraging the data that is readily available to them, lenders could achieve far better and more responsible outcomes. This will reduce the risk of loan default – for both businesses and individuals – and lead to more responsible lending decisions that can help people and businesses bounce back after what has been a difficult year.

 

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