BUSINESS NEWS
TMCs face slowdown ‘but there are opportunities’
Ian Taylor
Covid-19 safety requirements are “changing the landscape” of corporate travel but provide opportunities for travel management companies (TMCs). That is the view of Abby Penston,
chief executive of the Focus Travel Partnership. Corporate travel is likely to see a
cautious return, said Penston, who warned: “Recovery will be slower than first anticipated.” But after talking to Focus Travel
partners and suppliers, she said: “It’s no secret the crisis has accelerated technology trends, but the security concerns are providing opportunities.” Until now, Penston said: “Most
corporates have worked on the assumption that everyone wanted to travel. Now many businesses are wary of sending valuable assets on the road and individuals are nervous about travelling. Safety has become top, front and centre of considerations.” Approval processes have
tightened, she said, executives “are asking why teams are travelling” and
“travel policies will change”. Penston said: “We’ve heard
of some organisations turning off booking tools to force teams to get approval and not just go online and book. These developments provide opportunities to move the industry away from a commoditised transactional model to an appreciation of value for money and service delivery.” She added: “The pandemic and
risks of a second wave underpin why it’s so important to use a TMC. It’s not just about the booking process and
Approval processes for business travellers have tightened, says Abby Penston (inset)
reducing cost. TMCs provide value by ensuring travellers are taken care of.” Yet tighter policy restrictions
“will mean fewer bookings outside agreed protocols”, when prior to the pandemic “up to 40%” of bookings were outside corporate travel policies. At the same time, she said:
“Airlines are seeing business travellers choose premium cabins which provide social distancing.” Penston said: “The pandemic
has changed the landscape. I won’t say it’s for the better, but there are opportunities for TMCs.”
Arabian Travel Market
Trade shows lose $145bn revenue in first half of year
The return of trade shows and events will be uncoordinated and depend on local licensing, the head of the global exhibitions and events association UFI has warned. Chief executive Kai Hattendorf
said: “Markets are opening up. [But] outbreaks of Covid-19 are uneven, so licences to operate will be local for the time being.” He told a Hong Kong Tourism
Board global online forum: “The loss of events resulted in a $145 billion loss in the first half of 2020.” In May, UFI released a global
framework for reopening. Hattendorf noted events would change. “We will have some more digital events,” he said, but insisted: “The main driver of business is face-to-face. Digitisation alone is not sustainable. Clicks don’t discuss business deals. Eyeballs don’t sign orders. IP addresses don’t stay in hotel rooms.”
China’s travel recovery hindered by safety concerns
China’s travel recovery is proving “slower than expected” with outbound leisure trips “not considered safe”, business services giant McKinsey has reported. Steve Paxton, partner and lead
travelweekly.co.uk China’s recovery is ‘slower than expected’
on travel for Asia, noted “good and bad news” from consumer research in China. He said: “Chinese optimism about economic recovery stands out.” But just 4% of Chinese consumers expect to travel more post-Covid than before, with 36% expecting to travel less. Speaking on a Hong Kong
Tourism Board global online forum, Paxton said: “China shows signs of recovery – 90% of domestic flights are back and 70%
of domestic passengers, led by VFR traffic and some leisure travel.” However, he said: “The recovery
is slower than expected. Outbound leisure travel is not considered safe. The industry has a lot of work to do to convince people it’s safe to travel.” Paxton added: “Business travel
is not likely to return to its previous level. We see a structural shift. Maybe 20% is not coming back. Spending is likely to be well down on the peaks we saw before Covid-19.”
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