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City travel
IT DOESN’T SEEM THAT long ago when splashing out on yet another transatlantic ticket at the front of the plane didn’t merit a second thought, but to many involved in business travel it feels like a different era. At its peak, the vast spending power of the banks and financial service firms in the Square Mile supported a major industry of dependent travel businesses, from taxi firms to private jet providers. Then came the rough-and-tumble
of the global financial crisis five years ago: City firms slashed costs, and put the brakes on profligate corporate travel and entertainment. “At one point in the downturn, spending virtually switched off in the City,” says Ken McLeod, corporate director at Advantage Travel Centres. After the shakedown, the collapse
of Fannie Mae and Freddie Mac, then Lehman Brothers and the bailout of British banks, we saw increased regulation, margins squeezed and head-counts slashed. Iron-clad travel policies were then used as straitjackets to rein in the excess. They’re still firmly in place today. “Overall, the sector is clearly now more cost-conscious. There are also significantly less business travellers in this sector due to smaller workforces,” says Simon
Bean, UK general manager at travel management company (TMC) ATPI. And, come 2013, we’re finally in a more realistic era. Travel budgets are under constant scrutiny in the knowledge that our ‘casino’ banking sector and financial services industries are very much in the public eye, from Goldman Sachs to
After the shakedown, we saw increased regulation, margins squeezed and head-counts slashed
Royal Bank of Scotland – with the media pouncing on signs of excess and the bonus culture. “Certain high profile firms
now have to be seen to do the right thing,” explains Anthony Rissbrook, managing director of Hillgate Travel. “With companies working hard to save money, travellers know that it’s best not to feature on the out-of-policy pre- trip report without a good reason.” Perception these days means everything to a City firm’s reputation.
INCREASED COMPLIANCE Many investment banks and finance houses have therefore witnessed a big increase in compliance with travel policies – applied to junior traders and board members alike. “Our clients tell us that they name rule-breakers in internal reports to ensure they understand the impact their non-compliant activity can
have on the overall budget of the company,” says Anthony Drury, general manager at American Express Business Travel UK. The bigger the financial institution, the more compliance that’s likely to have been put in place. There’s also much stronger buy-in from senior level executives who now endorse specific travel policies. “There’s a real ‘we are all in this together’ mentality at the moment,” explains Bean. “This is extremely positive for buyers and travel management companies.” Many top brass at Square Mile firms are increasingly leading by example when it comes to travel policies – and it’s their companies that are making the biggest savings. “Compliance has been responsible for an 11 per cent reduction in average room rates across our customer base in the financial sector,” says Capita Business Travel director Steve Banks. One City firm insists all
employees use an online booking tool as a means of reducing the cost of arranging travel – and if anyone makes an offline trip they have to personally answer to the CEO. It’s certainly not the norm, but it is an effective way of ensuring compliance.
FURTHER AFIELD In a more globalised financial world, where investments can be found from the Caspian oil fields of Kazakhstan to Indonesia’s mineral
HOT IN THE CITY TRENDS IN MANAGED TRAVEL
• Since the global financial crisis, companies have been making compliance a much greater priority – travel policies are increasingly adhered to in the City and finance sectors.
• Traveller-tracking technology is becoming more important, and the high profile of the finance industry means companies are particularly bound to traveller duty-of-care.
• There is continued demand in the sector for full-service provision, with experienced staff on call 24/7, 365 days a year.
• In the larger organisations, there is an increased element of leading by example when it comes to travel policies.
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