Corporate travel has come a long way from its early days when businesses managed trips with little more than a phone call and a paper itinerary. In the past, companies often lacked formal travel policies, leading to inconsistent experiences for employees and inefficiencies in the travel process. As technology advanced and global business networks expanded, the way companies approached travel management shifted.
Today, the landscape is defined by strategic partnerships with Travel Management Companies (TMCs), where businesses seek more than just basic booking services. They desire a comprehensive, data-driven approach that drives cost savings, enhances traveller satisfaction, and ensures seamless travel experiences from start to finish.
This article delves into the key trends shaping business travel procurement in 2025, exploring the various types of procurement within the corporate travel space. We’ll also examine how corporate travel procurement stands apart from other procurement verticals, highlighting the unique strategies and approaches that businesses are adopting to navigate this evolving landscape.
Business travel procurement trends to watch out for in 2025
The business travel landscape in 2025 is poised for transformation, with rising costs, a push for sustainability, and smarter technology adoption reshaping procurement strategies. In this dynamic environment, procurement teams will need to evolve their approaches, ensuring they manage budgets effectively, prioritise sustainability, and cater to employee needs.
Managing rising costs across key travel categories
As business travel continues its recovery, procurement teams face challenges driven by cost increases across air travel, car rentals, and hotels. Here’s a closer look at what’s driving these changes:
- Air travel: While airfares stabilise after years of disruptions, fuel prices and limited airline capacity continue to influence rates. Many airlines are now offering greener travel options to meet sustainability demands. Procurement teams can control costs by locking in long-term contracts and prioritising eco-conscious carriers.
- Car rentals: Rising demand and supply shortages have pushed car rental rates up, but this is expected to ease by 2025. Electric vehicles (EVs) are becoming more common in rental fleets, offering sustainable choices for companies. Partnering with EV-focused rental services helps reduce emissions and may lead to long-term savings.
- Hotels: As demand outpaces supply in key business destinations, hotel prices are rising. Procurement teams can manage this by negotiating group rates and leveraging flexible booking terms to keep expenses in check.
Technology driving procurement efficiency
In 2025, technology will be at the forefront of streamlining procurement processes, reducing manual workloads, and identifying new cost-saving opportunities:
- AI-powered insights: AI tools are enabling procurement teams to analyse spending data, predict trends, and make data-driven decisions, improving budget management and identifying savings.
- Digital payments: The rise of corporate digital cards offers contactless payments, enhanced security, and real-time tracking of travel expenses. Integration with travel platforms simplifies compliance and budget tracking.
- Unified systems: Many travel management companies (TMCs) are offering all-in-one platforms that centralise booking, approvals, and reporting, saving time and providing better visibility across travel programs.
Sustainability at the core of procurement
Sustainability is no longer just a buzzword but a key driver in travel procurement. With increased pressure from stakeholders to reduce their environmental footprint, businesses are embracing greener options:
- Eco-friendly options: Airlines, hotels, and car rental services are prioritising sustainability. Procurement teams will need to choose vendors that align with these goals to reduce the company’s environmental impact.
- Hybrid events: Combining in-person and virtual events helps cut down on travel, reducing both costs and emissions while maintaining business connectivity.
- Tracking and reporting: New tools make it easier to track environmental impact and support reporting on sustainability goals, helping procurement teams stay accountable.
Building strong supplier partnerships
A collaborative approach with suppliers is essential for optimising travel programs. Strong relationships can lead to better rates, improved services, and increased flexibility:
- Strategic supplier partnerships: Focusing on fewer, trusted suppliers ensures consistency, allows for better negotiated rates, and simplifies vendor management.
- Interdepartmental collaboration: By working closely with teams in finance, HR, and sustainability, procurement decisions can be more aligned with broader organizational goals, reducing friction and increasing overall efficiency.
Striking the right balance between cost and traveller satisfaction
While keeping costs under control, procurement teams must also prioritise employee satisfaction. Providing flexibility in bookings, personalised services, and accessible support will keep travellers happy and productive:
- Clear travel policies: Ensuring travel policies strike a balance between cost control and employee needs will be crucial. Flexibility, such as refundable bookings or hybrid travel options, can enhance employee satisfaction without inflating budgets.
What remains unchanged in corporate travel
Despite the transformative nature of today’s corporate travel landscape, four key pillars continue to define the corporate travel experience: service excellence, risk management, data transparency, and self-service tools.
These enduring elements provide a stable foundation, ensuring that businesses can navigate the evolving travel industry while maintaining reliability and control. Even with the rapid advancements in technology, these fundamental principles remain crucial to delivering a comprehensive and dependable corporate travel solution:
1. Service excellence
As businesses aim to optimise corporate travel, service excellence remains a top priority. In a fast-paced world, the demand for 24/7 service is non-negotiable, as quick response times, knowledgeable teams, and a deep understanding of customer needs are essential for maintaining employee productivity.
The real shift, however, lies in the evolution of service delivery through digital platforms. These multi-channel tools are designed to enhance both speed and convenience, ensuring that service excellence continues to meet the growing demands of a global workforce.
In this ever-changing environment, the focus on efficiency, reliability, and adaptability makes service excellence a strategic imperative.
2. Risk management tools
Risk management has always been vital in business travel, but the increasing frequency of unforeseen global events and advancements in technology have underscored its importance.
Companies are now more aware of their duty of care responsibilities, and they continue to seek out Travel Management Companies (TMCs) that provide comprehensive risk management tools.
These tools include proactive and reactive risk identification, approval processes, traveller tracking, and emergency communication capabilities, helping businesses navigate travel disruptions with greater ease and confidence.
3. Control and transparency of data
The need for visibility into travel spend is a long-standing requirement, but how it’s delivered has evolved dramatically. In the past, businesses received quarterly reports printed and bound for review.
Today, TMCs offer customised, real-time reporting tools that allow companies to track expenditures, identify patterns, ensure policy compliance, and gain predictive insights into future trends and savings opportunities.
As technology has progressed, these tools have become even more sophisticated, with cloud-based solutions and data analytics giving Travel Managers deeper insights into their programs, making data control and transparency more valuable than ever.
4. Self-service tools
The introduction of online booking tools (OBTs) revolutionised how employees book corporate travel. These all-in-one platforms integrate travel policies and approval processes, simplifying the enforcement of good booking practices while allowing businesses to easily track travel data and spending.
The evolution of mobile apps has taken this experience even further, giving travellers flexibility and easy access while ensuring they remain in line with company policies. What was once a digital tool has now become a personal travel consultant, seamlessly supporting both travel managers and travellers.
While these self-service tools remain a core expectation, it’s the continued advancements in technology and service features that will distinguish leading TMCs from the rest.
Understanding procurement types in business travel
In corporate travel management, procurement is typically categorised into four main types:
1. Indirect procurement
This involves acquiring services that support a company’s operations but do not directly contribute to its core product. In the context of business travel, this includes services such as flights, accommodations, car rentals, and train journeys. These elements are essential for facilitating business operations but are not part of the final product or service offered by the company.
2. Services procurement
This category focuses on engaging and managing service providers, contractors, or vendors that support various business functions. For instance, hiring a business travel agency to handle your organization’s travel needs falls under this category. These service providers play a crucial role in ensuring that the company’s operations run smoothly and efficiently.
3. Direct procurement
This involves acquiring raw materials and products necessary for a company’s end product or service. In the context of business travel, direct procurement is not typically applicable, as it pertains more to manufacturing and production industries where raw materials are essential for creating the final product.
4. Goods procurement
This pertains to the acquisition of tangible items and software subscriptions. In business travel, this might include subscribing to an online booking tool. However, goods procurement is not usually associated with business travel, as it focuses more on physical products and software that support various business functions.
Distinguishing corporate travel procurement from other procurement areas
Corporate travel procurement stands apart from other procurement sectors due to its unique requirements and strategic approach. Effectively managing business travel involves sourcing and consolidating travel services, selecting appropriate travel management companies (TMCs), and negotiating favourable terms to enhance operational efficiency, ensure compliance, and improve the travel experience for employees.
Key differentiators:
- Supplier sourcing: Identifying and selecting the right TMCs, airlines, hotels, and transportation providers is crucial. This process requires thorough market research to assess suppliers based on their ability to meet company needs, budget constraints, and service quality expectations. Factors such as reputation, reliability, technological capabilities, and global reach are essential considerations, especially for organizations with international travel requirements.
- Negotiating contracts: Negotiations with travel service providers involve leveraging data on travel patterns to secure favourable rates, consolidating spend with preferred suppliers for better terms, and focusing on value-added services beyond just price. Establishing clear service level agreements (SLAs) ensures quality while negotiating flexibility accommodates market fluctuations. Regularly reviewing and renegotiating contracts, along with building strong relationships with suppliers, ensures access to the best deals.
- Ensuring compliance: Adherence to company travel policies and regulatory requirements is crucial for controlling costs, maximising supplier leverage, and managing risks. Ensuring employees book through approved channels and contracted suppliers support savings and traveller safety standards. Utilising a TMC and its tools that integrate policy guidelines and real-time tracking helps monitor compliance effectively, reducing risks and ensuring an efficient travel program.
- Maintaining relationships: Strong, long-term supplier relationships are vital for successful travel procurement. They foster trust, enable quick issue resolution, secure better-negotiated rates, and ensure preferential treatment during disruptions. Regular check-ins and open communication enhance these relationships, uncovering opportunities for savings and service improvements, and making procurement more effective and resilient.
Elevate your corporate travel experience with Holiday Tours
At Holiday Tours, we specialise in delivering personalised, end-to-end corporate travel solutions tailored to your organization’s unique needs. As one of Malaysia’s leading travel agencies, we offer comprehensive services, including flight bookings, accommodation arrangements, ground transportation, and itinerary management.
Our dedicated team ensures seamless travel experiences, allowing your employees to focus on their core responsibilities. By partnering with us, you can streamline your corporate travel strategy, ensuring efficiency, cost savings, and a seamless experience for your employees.
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