INTRODUCTION
ABOUT THE REPORT DATA YOUR GUIDE TO THE SOURCES, SURVEYS AND METHODOLOGY BEHIND THE FIGURES IN THIS REPORT T
his is the fourth Travolution Innovation Report analysing technology (IT and telecom spend) in the UK travel industry. The analysis has been produced by
Kew Associates for Travolution. It covers five travel industry sectors’
expenditure on hardware, software, computer services, telecom services, and IT and telecom staff, from 2010 to 2015. The data also allows us to analyse spend in five company size bands and to benchmark it against metrics such as turnover, employment and passenger numbers.
METHODOLOGY Historical data Historical IT and telecom expenditure is based on the series of government surveys outlined in the Glossary (page 42). The five spend components are split into industry sectors and size of enterprise, with data going back to 2006. Any adjustments to cover gaps in
the government data are reconciled with various sanity checks, such as spend per employee and spend as a percentage of turnover. The final historical analysis provides
a matrix covering five industry sectors with five spend categories across five
insufficient data to carry out the same assessment by travel sector but it is assumed the alignment holds at this sector level.
employee bands. It also reflects the demographic structure of each of the five travel industry sectors as provided by the Inter-Departmental Business Register (IDBR).
Spend Forecast Our projection of expenditure in 2015 is calculated using the following processes: 1. Historical spend data is used in conjunction with growth in the number of employees to forecast future expenditure. Justification for this approach is based on the strong relationship found between total IT spend and all employment. Appendix 1 (page 42) shows these alignments. Both data sets are from government sources and cover the whole UK economy. Unfortunately, there is
2. Employment forecasts for each sector are based on historical trends and on how each sector’s data relates to the whole economy. To obtain the whole economy growth, use is made of the Office for Budget Responsibility employment projections. The historical and the resulting projected employment numbers for each sector are used with the corresponding historical overall IT and telecom services spend to forecast each sectors’ future outlay.
3. The historical and projected total IT and telecom services spend for each of the five travel sectors is disaggregated to produce a final matrix of five spend categories by five employee bands in five sectors for 2010 to 2015. Projections are made by using the disaggregated historical data and forecasting each elemental data series using Excel's Forecast function and ensuring the already derived overall spend totals are matched. Finally, sanity checks are made using spend per employee and spend as a share of turnover.
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TRAVOLUTION.CO.UK
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