In January 2006, the travel management industry returned from their holiday break to find a major re-shuffling of assets and management amongst the world’s leading agencies. Though the dust from the merging and re-branding campaigns has largely settled some years on, the industry now faces a number of new challenges.
In Europe, there is an ongoing aim to square business travel with a growing sensitivity to the environment. New security threats and regulations implemented this year at airports throughout Europe, the rise of new all-business jet carriers, the impact of open skies, and the ever important matter of how changes in ownership and the landscape of the global distribution firms will affect access to supplier content, are all key topics for EU travel managers and buyers.
“Our industry is evolving rapidly. We face new pressures in the industry everyday but they often bring new opportunities and ways of working that improve our client services,” observes David Herrick, head of American Express Business Travel, EMEA, American Express. “Environmental concerns have become one of the emerging issues this year, with a heightened focus around many business activities including business travel,” he says.
Indeed, Eurostar, which reported a 13 percent rise in its business travel passenger sales in the first six months of this year, believes the rise is directly related to corporate travellers’ growing environmental conscience. German financial giant West LB, for example, recently implemented a travel policy mandating travellers on the London-Paris route take the Eurostar, rather than fly. Industry pundits believe concerns over climate change will continue to be reflected in many more businesses’ travel policies and purchasing decisions.
Earlier this year, the UK government announced plans to implement a standard for carbon offsetting and is proposing an accreditation for offsetting firms to ensure that self-proclaimed sustainable development projects are truly making a positive impact on the environment. The policy changes are likely to bring a shift away from a focus on carbon offsetting, toward adoption of more intelligent travel policies, of which offsetting will be only one component.
In addition, the new UK Companies Act, which will go into effect October 2007, will strengthen companies’ Corporate Social Responsibility remit, making company directors responsible for environmental decisions. This is expected to have a massive impact on the supply chain, as company directors in a purchasing capacity will have to think more cautiously about the environmental practises of the companies they work with, including travel suppliers. They will also be responsible for the environmental impact of their own companies’ operations and this will include business travel.
“The Green agenda is here to stay,” says Bob Govan, head Portman Travel. “We can expect further measures to try to reduce carbon emissions—many of which will impact travel companies, so the upcoming challenge for business travel users and their suppliers must be to develop core business models which are self-evidently socially robust.”
Beyond the environment, Mike Buckman, CEO of BCD Travel sees the hot-button issues confronting the travel management industry in Europe as centering on the “three C’s” of capacity, compliance and content. “Airplanes packed to the brim and high hotel occupancy rates mean that traveller frustration is at an all-time high,” says Buckman. The situation is not helped by new, more stringent security procedures being implemented throughout the UK and Eurozone.
New baggage restrictions put in place at London’s major airports following this summer’s terrorist attack at Glasgow airport, have caused many problems for those transiting to other European cities from North America, for example. New passenger security measures in Spain, which, akin to the US, requires airlines to submit the names of passengers prior to departure, has also caused a number of headaches for frequent, last minute business travellers.
“In the face of a deeply-pressured infrastructure, both corporations and TMCs have a huge role to play in giving travellers the tools they need to stay focused, informed and productive,” says Buckman. On the plus side, he points out that increasing price pressure on transatlantic routes, helped by the entrance of new business carriers such as Eos and SilverJet, along with global consolidation, has brought a number of savings opportunities for buyers who are willing and able to shift market share.
“The current environment is a perfect storm for travellers trying to get where they need to go and travel managers/procurement officers seeking to control spend and optimize supplier contracts,” says Buckman. More than ever, he says policy compliance must be corporate travel managers’ bulwark. BCD’s recently released 2007 Client Benchmark Survey marks the first time in three years that mandating travel policy ranks as the number one travel policy change.
“Companies are becoming stricter in their efforts to police policy adherence and implementing procedures that penalise non-compliance. Those efforts are bearing fruit, as we have seen significant increases in air programme compliance,” says Buckman. “Online booking tools, automated fulfillment and intelligent management reporting remain important weapons in the arsenal to improve communication to travellers and increase compliance.”
When it comes to content, Buckman observes that executives responsible for managed travel programmes feel caught between travel suppliers’ drive to remove costs from their distribution systems and their own need for easy access to full content inventory. “Despite last year’s flurry of opt-in agreements between GDSs and airlines in the US and the UK, this remains a painfully uncertain issue,” he says.
Isabelle Koch, vice president of corporate and marketing communications for Carlson Wagonlit Travel, and a member of the global board of directors of ACTE, believes transportation is one of most significant issues facing the industry. “Transportation systems must be modern and efficient, both at domestic and international levels. In Europe, major air and rail hubs are saturated and mobility is undermined,” says Koch. In addition to the challenges presented by an overburdened infrastructure, the priorities that demand our collective attention include a pragmatic but optimal approach to safety and security, more liberal access to foreign ownership of airlines, particularly with regard to US carriers, and a more efficient global air traffic control system, says Koch.
“We need effective measures to halt the disproportionate taxation on air travel, ensure the continuous reduction of greenhouse gases and guarantee access to relevant content through global distribution systems. In order for business travel to continue to generate economic prosperity for individual organisations and society as a whole, governments and the private sector must work together now to find solutions that will ease the demands on organisations and their travellers.”
