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How EY Is Sustainably Ramping Up Business Travel

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  2. HOW EY IS SUSTAINABLY RAMPING UP BUSINESS TRAVEL

Karen Hutchings is Travel, Meetings & Events Leader at Ernst & Young (EY). Pre COVID, she managed US$2.1 billion in travel spend and approximately $400M in meetings and events spend. Her role and her team have certainly had a challenging time over the past couple of years.

Now she has new goals – to reintroduce business travel with a sustainable drive to cut business travel carbon emissions by 35% by 2025. Helping achieve this is the adoption of virtual meeting solutions. And she’s also driving a hotel sourcing process based on dynamic pricing.

Karen will join Chris Crowley, SVP, Global Sales, Duetto in a Fireside Chat at our upcoming Revenue Strategy Forum in London.

Here, we catch up with her to learn more about why the industry needs to be agile, how client needs should be the starting point for any strategy, and why we shouldn’t be aiming to get back to FY19 levels.

You are the Global Head of Travel, Meetings & Events at EY. What does that role entail? And how do you work with the hospitality sector?

That encompasses hotels, airlines, travel agencies, venue sourcing agencies, and some of the newer food delivery services. It includes managing the relationships, contract negotiations, and getting brand value from those suppliers, which we refer to as above and beyond the rate.

The other half of my role is stakeholder engagement. We spend a lot of time talking with our internal customers which ultimately are the hospitality customers. We say to hotels that their customers are our customers.

We also do a lot of market research with our top travelers to see what they need out of our program, from a travel perspective or for meetings and events.

How do you think the pandemic has sped up the need for change within the meetings and hospitality sector?

The biggest acceleration we saw was in the virtual space. People quickly realized they still needed to connect. We quickly went out to source good virtual event providers. Next was how do you make those virtual events more engaging and how do you bring a spark to it to enable the social interaction and make it an experience?

On the hotels and airline side, things just stopped. Our volumes were reduced by 98%. Then it’s about how do you adapt as things come back? One thing we did with hotel chains was we looked at their more regional offerings so that people could have meetings away from the big cities.

The ability to change and be agile has become critical. I saw it with my team. I had event managers on my team who only did in-person events. They quickly went on training courses and are now managing virtual events.

That whole ability to change and think differently quickly becomes a real positive and it will drive the industry forwards.

Our theme is ‘Strategy Before Forecast’ how do you think hotels can and should put strategy first as they plan for 2022 and beyond?

We keep hearing about when are you going to get back to FY19 levels. We are not going to get the business back to those levels. And if we care about our planet we shouldn’t be aiming to get back to those levels.

What the hotels should be doing is thinking about where they can add value or about how can they support sustainability more consistently? Then it’s about taking that step back and thinking more collectively across the industry about what they need to do rather than looking in isolation.

Being hung up on what the numbers are will mean that you are on a different trajectory to your clients. Because the clients will be driven not by how large their program is, how much they will spend, or when it will get back to FY19 but by how do they support their internal goals.

Ask your clients what they are looking for and then see if you can strategize to provide it.

In 2018 you and your team deployed a new hotel sourcing process based on dynamic pricing. That sounds very aligned with our Open Pricing methodology. How does it work?

We wanted to get away from preferred and non-preferred hotels.

Rather than limit the number of hotels our stakeholders could stay at we opened it up and gave our employees more choice. If they are brand loyal, they can stay within the brand they feel most comfortable with.

We set city caps and that controlled what we would pay. The key thing to a dynamic pricing model is that it fluctuates according to BAR and we get a discount off that. City caps meant there was always a set maximum we would pay.

Now we are creating this open marketplace. We want revenue managers to want open access with a special rate for 350,000 employees of EY. Give us a rate and let’s see if our employees want to take advantage of that. With this, hotels can have access to a captive audience with us.

Large-scale meetings tend to have a lead time of many years. How have these changed?

We’ve got in-person events happening this year. However, a lot of our major milestone events have been virtualized, but we are hoping these can take place in person next year.

A lot of this relies on what’s happening in the country, who can travel there, and what happens with the pandemic and case numbers. We are limited by government guidelines.

What’s interesting is the number of people attending. Our large-scale events are not having the same volume of people attending and that’s down to whether we are holding them as large-scale events and to the personal preference of attendees.

Pre COVID you managed US$2.1 billion travel spend and approximately $400M in Meetings & Events spend. Dare I ask how that has changed?

Significantly! We were running at -98%. It’s coming back but as I said volumes are significantly reduced. We ended FY21 at $350 million.

However, we don’t want it to come back to the same levels. We have significant carbon emission reduction goals. Approximately 75% of our carbon emissions come from business travel and we have come out and said we will reduce that by 35% linked to business travel by 2025. We owe it to our planet not to go back to those levels.

There will be a peak as everyone first gets out to reconnect, then it will drop, and then it will normalize.

For us, FY23 will probably be more of a normal year than what we are seeing now.

You work in the meetings and events sector – arguably the travel sector most impacted by COVID. What have you done to stay sane and optimistic during the past couple of years?

I got myself back in shape again. I used to run a lot. I’ve run 26 full marathons. My last marathon was in 2007. I also own horses and have fallen off them more times than I care to remember. I crushed a leg and never thought I’d be able to run again. But this lockdown, we started doing Workout Wednesdays with the team, and then we had challenges and I got myself back into running and I have now run five half marathons this year.

I’m very lucky I live in the country. I also have a menagerie of animals and they keep me very sane.


Discover revenue strategy top tips from industry leaders from CBRE, ProfitSword, EY, Accenture, and more, in our latest Special Report, Strategy Before Forecast: Open Up Your Revenue. Download today: https://www.duettocloud.com/special-reports/strategy-before-forecast

 

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Sarah McCay Tams, Director of Marketing Communications.

Sarah joined Duetto in 2015 as a contributing editor covering Europe, Middle East & Africa (EMEA). In 2017, she was promoted to Director of Content, EMEA, and in 2022 promoted to Director of Marketing Communications. An experienced B2B travel industry journalist, Sarah spent 14 years working in the Middle East, most notably as senior editor – hospitality for ITP Publishing Group in Dubai, where she headed up the editorial teams on Hotelier Middle East, Caterer Middle East and Arabian Travel News. Sarah is now based back in the UK.

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