p26-27 feature July10 6/7/09 17:45 Page 26
knowledge business travel
ttglive.com
Travel management
Surviving the
perfect storm
With the downturn slashing corporate budgets,
the business travel sector has taken a battering.
Martin Ferguson looks at prospects for recovery
T
he depth of the recession has
changed the landscape of business
travel for ever. Last year’s sky-high
oil prices and the catastrophic
credit crunch created a perfect storm which
washed away the sector as we knew it.
As the corporate world fought to stave off
bankruptcy, travel bans were enforced with
depressing regularity.
Other firms simply clamped down on
spend and tightened travel policy with the
help of their travel management company.
Last month, the Association of Corporate
Travel Executives polled its travel buyer
members in the UK and Europe, and found
as many as 86% had slashed travel budgets,
with the majority warning cutbacks would
remain in place when the economy recovers.
As a result, airlines have posted record
losses, hotels are trashing rates to fill rooms
and environmental pledges made during
the good times have been shelved as focus
switches from climate change to cost cutting.
Some hope for agents
But it’s not all bad news. Rail companies are
enjoying an increase in passenger traffic
and, according to one of the industry’s most
experienced buyers, the economic downturn
is a fantastic opportunity for TMCs to show
their worth to the travel supply chain.
Mark Avery, head of procurement at Price-
waterhouseCoopers, says TMCs must shout
about how they can save clients money.
“This is a golden moment for TMCs,” he
says. “Company directors are queuing up to
ask how travel can be more efficient and
cost-effective. That’s where the TMC brings
value and expertise.”
Former HRG boss Mike Platt estimates
more than 20% of significant business
travel spend in the UK still goes unmanaged
and he urges TMCs to “get out and win the
business”.
26 10.07.2009
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