TURNING THE CORNER
MARK FRARY INTRODUCES THE ANNUAL BUYING BUSINESS TRAVEL GUIDE TO THE UK’S TOP TRAVEL MANAGEMENT COMPANIES
THE BIG QUESTION IN 2013 WAS: will the economy finally recover, or won’t it? Much to the relief of UK plc, the answer seems to have been a tentative yes. Gross domestic product increased in each quarter and confidence grew substantially among purchasing managers and accountants – as demonstrated by the Markit/CIPS and Grant Thornton/ICAEW indices. In last year’s survey, we published the
results of our snapshot poll of travel manage- ment company CEOs and directors, who felt confident about the year ahead. The figures they have reported this year bear out that optimism. Paul Wait, chief executive of the Guild of
Travel Management Companies (GTMC), says the outlook is certainly looking positive. He told BBT: “In a recent Deloitte survey of chief financial officers, 57 per cent said that now is a good time to be putting risk back on to the balance sheet, and also, therefore, a good time to start looking at expanding businesses and exporting. This, combined with the recent figures showing December air transactions for GTMC members were seven per cent ahead on the previous year, suggests that we have every reason to be confident that this gradual increase in year-over-year growth will continue into 2014 and beyond. “Moreover, with airline pricing strate- gies continuing to become more complex, the need for a TMC that can navigate the field and bring knowledge and value to the table has never been more crucial. This is where a TMC really proves its worth in being able to ensure that the travel they recom- mend is right – be it for budgets, business
56 BBT MAY/JUNE 2014014
objectives, cultures or – more often than not – a combination of all three.”
2014 SNAPSHOT Each year, we ask our surveyed TMCs for their views on the state of the market. Their ag- gregated answers are shown in the charts on p58. They show that TMCs are upbeat about growth in the year ahead, but appear reliant on winning new customers from their rivals to do that – not everyone will be successful. Most TMCs appear to believe that new technology will be a key force in winning that business, and have plans for significant investment. What was clear from the responses was
that TMCs felt they were facing big challenges when looking to the future. The difficulty in recruiting skilled business travel staff (a shortage that may start to be addressed by a new initiative from Giles Travel) and slim margins are the biggest fear factors. Five TMCs have said the International
Air Transport Association’s (IATA) New Distribution Capability (NDC) – which the airline body portrays as a standardisation initiative – is the biggest challenge they face in the years ahead, while another five say it is direct booking with suppliers – two sides of the same coin.
THE TYPICAL TMC The top 50 TMCs in our 2013 survey have combined business travel sales of £8.2 billion, or an average of £164 million each. The average transaction value was £395.82. Our ‘average’ TMC also employs 78.5 people (full-time equivalent), who have an average of 10.2 years of experience.
BUYINGBUSINESSTRAVEL.COM
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