CAR RENTAL
SPECIAL REPORT
Paul Turner BMW 4-series coupe ON YOUR MARQUES...
CAR RENTAL GIANT AVIS has launched a new range of premium cars, aimed at senior executive business travellers and the leisure market. The Select Series collection allows specific models to be specified when booking. The range includes the new BMW 4-series coupe, Audi A5 Sportback and Peugeot RCZ sports car. Avis UK managing director Mark Servodidio said demand
for premium cars was strong with inbound business in the UK, particularly with Middle Eastern, South African, US, Russian and Chinese clients. Avis has also signed a 15-year global partnership agreement with British Airways, with an option to bring its Budget brand into the portfolio during the agreement. The partnership means business travellers renting on their Avis corporate account can earn three Avios [loyalty points] per £1 spent.
RESEARCH
CUTTING COSTS PRIORITY FOR 2014
REDUCING COSTS WITHIN THE TRAVEL PROGRAMME is the top concern for buyers in 2014, according to research from ATPI Group.
The study polled 150 senior travel buyers, who ranked reducing costs as the most important factor when planning a global travel programme. The study found that buyers plan to use different strategies to help tackle costs, with the majority aiming to put a greater emphasis on travel planning, with about 55 per cent making more advanced air bookings in 2014, compared to 50 per cent in 2013. Buyers also ranked having a flexible travel policy as another
BUYINGBUSINESSTRAVEL.COM
main concern for 2014. ATPI said the “increased consideration for flexibility and advanced planning carries the implication that business travel is becoming increasingly important as part of the economic recovery”. In addition to focussing on costs and forward planning, duty-of-care is still a key consideration for buyers, the study found. “It is a responsibility that extends throughout an organisation – from travel managers, to HR and senior management – to ensure any travel management plan has sufficient risk assessment and a robust safety strategy in place,” said ATPI.
MARKET VIEW
PAUL TURNER IS AN ASSOCIATE DIRECTOR WITHIN THE TRAVEL, HOSPITALITY AND LEISURE SECTOR TEAM AT DELOITTE. THE TEAM SPECIALISES IN BUSINESS TRAVEL MERGERS AND ACQUISITIONS (M&A)
BETWEEN 2006 AND 2012 there were approximately 30 deals in the business travel sector where the target has been a UK- based company, with a combined deal value of £1.2 billion. The recession, banking crisis and subsequent credit crunch at the end of 2008 through to 2010 had a well-documented impact on the UK economy, and this impacted M&A activity both in the business travel sector and the wider market. The number and value of deals resumed to pre-recession
levels in 2012, driven by a returning confidence in the sector. Lloyds Development Capital (acquiring TD Travel and the subsequent bolt-on of Hotelscene), Key Travel (Delta Travel), Capita (Expotel) and Intermediate Capital Group (ATPI) all transacted in 2012. We expect this renewed confidence to be sustained for the foreseeable future. With a limited number of strong businesses being sold
recently, competition has been strong. Many of the private equity houses are keen to deploy capital in an improving economy and, with increased debt availability, they are able to offer attractive pricing. This is backed up by higher levels of capital available in the larger corporates, who are becoming increasingly confident in making acquisitions. ATPI, Instone and Griffin are all examples of specialist business travel companies that have successfully transacted with private equity buyers in recent years. In addition, the summer of 2013 saw the management buy-out of Key Travel backed by Isis Equity Partners, a deal on which Deloitte Corporate Finance advised the shareholders of Key Travel. The level of buyer appetite was very strong and proves the continued and strengthening interest for investing in the sector. According to the Institute of Chartered Accountants in England and Wales’ (ICAEW) monitor of business confidence, the UK economy was set to grow by 1.5 per cent in the first quarter of 2014. The rise in confidence has driven an industry expectation for growth in exports and investment, indicating a strong year ahead for business travel. With the market offering a wide range of prospective
investors, 2014 may be an excellent time to realise value from businesses.
BBT MAY/JUNE 2014 11
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