Travel management was among the industries hardest hit during the recent worldwide recession. As consumer spending decreased sharply, fewer people traveled for business or leisure, leaving travel agencies and management companies with substantial losses. However, the travel management industry has recently experienced a bit of a rebound, due to the growth of business travel, advances in technology, and signs of an economic recovery.
Whats behind the growth?
Recent signs of economic recovery have contributed greatly to the travel management industry’s rebound. While national economies remain at low levels compared to their levels before 2008, there are indications that a number of countries are beginning to stabilise. As these economies become less volatile, citizens are beginning to spend money again, and this may spur a renewal of interest in leisure travel.
While a number of corporations scaled back operations or closed their doors because of the recession, many of those that remained open are spending more money on business travel than they did previously. In an effort to adapt to the globalisation of commerce, a number of corporations have begun to engage in business travel at record levels. This trend is supported by the comments of the president of a design firm based in the US who recently said: “We have to go where the work is, and more and more of our work is out of town. We’re on an airline nearly every day.”
The Global Business Travel Association reported that business travel revenues actually increased in 2011, growing by over seven percent. The association’s Executive Director, Michael McCormick, summarised the increase, saying: “Although the economic recovery is still modest, we see business travel remaining healthy and growing at a steady rate that outpaces GDP growth.”
Advances in technology have also played a role in the travel industry’s gains. As consumers increasingly use the internet to arrange their trips their costs go down, encouraging them to travel more frequently. Savvy corporations have seized upon this convenience, giving travellers greater control over their own arrangements and making it simpler for them to find reasonable prices.
Concur: A leader in e-travel commerce, Concur provides travel arrangements through a variety of websites and applications, including Room 77, RideCharge, and AppExchange Mobile. The company also created the Concur Connect platform, which enables users to take advantage of a cloud system for travel and expense arrangements. Concur reported a 25 percent revenue increase in the first fiscal quarter of 2012.
China International Travel Service Limited: As more Chinese citizens attain middle class status, they are spending more money on travel within their own country. Drawing on the booming Chinese economy, China International Travel Service Limited (CITS) has expanded into new regions of the nation, providing business tourism and travel services to more individuals. The company was named in the Top 50 of the 500 Most Valuable Brands in China in 2011.
Statesman Travel Group: Already known for its high levels of customer service, Statesman Travel Group recently partnered with a travel management company to allow employers to reconcile their business travel expenses more efficiently. Statesman recently received a £4.25m capital investment from Business Growth Fund, which plans to combine Statesman with Commodore Travel. The joint company is expected to report annual revenues approaching £100m.
