NEW DIRECTIONS

If the Covid-19 pandemic has taught us anything, it’s that flexibility is a key element of any form of business policy and this has certainly proved true for the management of ground transport.

Not that 2020 is a boom year for car rental. Car hire companies are “having a hard time,” says Nicolay Nedrelid, France-based founder of the car rental consultancy Nedrelid Corporate Advisory. “Car rental is closely linked to air travel and when that’s down 90 per cent, rental is affected too,” he says.

While all elements of corporate travel have been ravaged during the past 18 months, the decline in ground transport usage (excluding rail) has been far lower in percentage terms than air travel.

American Express Global Business Travel notes the share of air travel transactions in Europe has fallen from 70 per cent to 50 per cent, while the share of ground transport has risen from 30 per cent to 50 per cent since the start of the crisis.

The appeal of using ground transport as business travel resumes is straightforward from a health and safety perspective, with travellers able to ensure social distancing in the “bubble” of their own or company vehicle, hire car or even a taxi or chauffeur-driven journey.

Josh Collier, head of proposition for rail and ground transportation, at Agiito (formerly Capita Travel and Events), says while rail suffered drops in passenger numbers of up to 80 per cent due to “nervousness about social distancing”, other forms of ground transport only fell by 45 per cent.

But to accommodate this shift from air and rail to the road, organisations have moved to “relax” their travel policies – at least in the short-term. “One customer said if you need to travel – use cars,” adds Collier. “It’s probably mostly the grey fleet with people using their own cars. There’s definitely been a more relaxed policy on the grey fleet.”

COMING INTO FOCUS
Ground transport has often been a subject that falls through the cracks of travel policies, which have traditionally focused on higher spending categories of air and hotels. But there are signs this is changing. Scott Davies, CEO of the UK's Institute of Travel Management (ITM), says its members are now spending more time looking at ground transport policies than they did pre-Covid.

“Firstly, because they had more time and the opportunity to review policies while business travel volumes are supressed; and secondly because ground transport is one of the areas where travel is expected to return more quickly,” he adds.

Davies says buyers are looking for ground transport providers who can “aggregate” a variety of options encompassing car rental, ride-hailing and the grey fleet, as well as new options such as bike hire and even e-scooters.

“By increasing the choice of solution, buyers are able to increase adoption and compliance – and have more effective control, reporting and visibility of their entire ground transport programme,” adds Davies.

One European-based buyer admits ground transport has previously “not been much of a focus” due to its relatively low amount of spend compared with air or hotels. But adds: “This is definitely an area we will look to address as we come out of Covid”.

INCREASING FLEXIBILITY
Many corporates have chosen to temporarily amend policy around ground transport to deal with the challenges thrown up by resuming travel while Covid remains a factor and employees have understandable health concerns.

Examples have included dropping the requirement to always travel by train (rather than road) for journeys of a certain length, as well as allowing car rental to be used more widely to give reassurance to travellers concerned about taking public transport.

"We are seeing more clients doing road trips to avoid public transport and have their own flexibility. There is no defined policy change, but this is more of a temporary user-led change," says Ian Currington, Gray Dawes' director of account management and client implementation.

Most agree these changes are likely to be temporary, with a return to rail set to be one of the first corporate travel trends as vaccination rates continue to rise and restrictions are lifted around Europe.

“When we look at current transaction volumes across Europe, we see that rail is recovering faster than air,” says Adrien Cannes, consulting manager for GBT Global Business Consulting. “This could be because the first wave of returning travel is largely domestic, where rail predominates. But looking ahead, the strong client interest in rail suggests that rail volumes will continue to expand relative to air.”

The nature and format of “face-to-face” meetings that organisations can practically hold will also shape ground transport policies.

Rob Coomer, senior director, global customer management at CWT, says ground transport will be important with “hybrid” business events, combining physical and virtual elements, set to become the norm for a while.

“With hybrid events now filling the ‘in-person global conference’ void, inevitably flight needs have reduced and localised travel via ground transport has increased, specifically train and/or self-drive with a rented car,” he adds.

SUSTAINABILITY CONSIDERATIONS
Whatever the short-term considerations, there is general agreement that sustainability will be more important post-pandemic with increased focus on reducing emissions and this is going to be reflected within travel policies.

In this context, emissions-friendly rail travel is set to become even more important across Europe. It’s worth noting the French government’s bailout of Air France came with a condition to cut domestic flights on routes where there are existing alternative high-speed rail services.

The increase in the importance of self-drive and taxis may be short-lived as more cities and countries impose stricter emissions and anti-congestion regimes – not to mention corporates’ own emissions reduction targets. However, rental, taxi and transfer providers are also making efforts to "green" their fleets.

Travel policies are also going to have to include more forms of transport – GBTA research found newer options, such as hiring bikes or e-scooters, were only addressed in less than 50 per cent of travel policies in Europe.

Traffic congestion was one of the first things to return to major European cities after the initial stages of the pandemic. “The roads are beginning to be at capacity – people will spend their life in traffic jams and that’s not productive,” adds Agiito’s Josh Collier.

Ground transport’s time may finally have arrived and being flexible enough to adjust to these trends will be crucial to ensuring the policy is on the right road or track.