ABTN’s resident expert Stanley Slaughter analyses the latest figures on business travel and finds that all is not as rosy as it seems in the world of travel management…
It is good to read of an increase in business travel. It shows the industry is on the up and the dark old days of 2009 left increasingly in the distance. So to read two good reports on one day is something of a landmark. Monday was such a day. Out came two reports painting business travel in a positive light. So it must be on the up, mustn’t it?
Not necessarily – but before considering the downside, let’s first look at the good news. The first instalment of this came from the UK’s Guild of Travel Management companies (GTMC). Its figures for the number of transactions by members in the first quarter of 2011 show a rise of 10% on the same period last year.
Hotels bookings were up 15% by members, who include all the major TMCs in the country. Air and rail were both up by 9% and car rental reservations rose by 10%. So roughly a tenth more business was being done by British TMCs in 2011 compared to 2010.
There were no figures for the value of the transactions, but Anne Godfrey, the GTMC’s ceo, said there was a switch from short to long haul with travellers flying more frequently and on longer journeys.
Perhaps most encouraging of all, Godfrey reported that the GTMC had now seen 15 months of growth and hotel bookings had their strongest show for two years.
The second chapter of good news came from insurance company Mapfre Assistance, which in a survey of 526 business travellers found that 34% travelled more in the first six months of 2011 compared with the same period last year.
A slightly smaller percentage (29%) said they expected to travel more in the next six months. It led Leire Jimenez, Mapfre’s head of B2B Travel, to comment: “Our research suggests that the business travel market is on the up and business travellers expect that trend to continue. This should provide an opportunity for business travel firms to increase revenue from an increase in passenger numbers.”
But there is a downside to these figures, which takes the gloss off the rosy assumption that all is on the up. The survey found that while 34% had travelled more, 43% had seen no increase while 23% – a large minority – said the number of their trips was down. Equally disconcerting was the revelation that a similar number thought their number of trips would either stay the same (43%) or decrease (21%). Taken together it is pushing it to say that from this that business travel is on the up.
But what is more worrying is that despite the horrors of 2009 and the severe cuts in travel, some travel managers do not seem to have learned from this sobering time and made the necessary improvements.
A survey by Carlson Wagonlit Travel’s research arm the CWT Travel Management Institute found that corporates were not fully tailoring available services to their companies’ specific requirements, even though doing this could save money and help travellers.
The report Business Traveller Services: Finding the Right Fit was based on asurvey of travel managers, travellers and travel arrangers. It looked at four main areas: the benefits of online booking; the need to balance savings with the needs of travellers; using services which can both boost the travel experience and productivity; and using travel expense systems.
CWT said travel managers estimated tickets prices were 7% lower when booked online. It is a system that has been working well with point to point travel but the problem arises in more complex trips. But when a multi-legged trip booked on an OBT includes errors or needs assistance from the TMC, costs can rise. It means that any savings could be nullified.
Travel managers surveyed said that “at least” 15-20% of assisted bookings could be avoided. In other words, companies are paying more than necessary on up to a fifth of their transactions.
Another worrying statistic to emerge from the CWT research is that most travel managers (54%) do not know if their travellers are using social media for travel purposes. As the growing use of smart phones and the impact they can have on compliance is one of the issues most concerning travel managers, this is a startling figure.
But there is an even more jolting figure in the CWT report. It said 47% of the surveyed travel managers “say travel management companies should include expense management in their offerings”. If there are travel managers who are using TMCs which do not offer such services, what on earth are they doing? Isn’t it time they showed them the nearest door?
What seems to emerge from this mix of the good and the bad is that when the economy is good, people travel more, when it is bad, they travel less and in the engine room of travel management things go on regardless.
The best time to change – when travel managers can get CFO support – is when times are bad. It is often more difficult when things are going well and the incentive is less acute. It seems, from the CWT research, that some travel managers let the opportunity of 2009 to improve slip them by.
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