Business travellers to cut costs in 2012

Business travellers to cut costs in 2012

Business travellers are likely to move from business class to premium economy seating in 2012, and may avoid travelling to destinations with high airport taxes.

This is the view of Corporate Traveller UK’s general manager, Graeme Milne, who believes that while business travel bookings will remain steady next year, companies may look at other ways of cutting costs. This will also include clients seeking longer payment terms in a bid to ease cash flow.

“Clients are increasingly asking if they can delay payments and it’s not an easy decision for any TMC to make as we have to weigh up the risks involved,” said Milne. “We have also seen a marked increase in hotel bill-backs as clients look for ways to stretch their finances by paying after departure.”

On the issue of airport taxes, Milne said he believed that levies like APD would have an impact on corporate travellers’ flight choice. “All taxes associated with air travel are high and clients are seeking ways to reduce costs if they can fly indirectly to a destination via an airport with lower rates,” the Corporate Traveller GM said.

Milne also said he believes that companies will look towards flying with carriers offering good frequent flyer benefits, and that rail bookings will remain steady, although corporate travellers are likely to shift down to standard travel classes.

Despite this trend of cost-cutting, Milne said that Corporate Traveller was expecting to increase its turnover by 30% to £200 million by the end of its financial year in June 2012. This follows a 35% rise in the past 12 months.

“The ongoing challenge for us is to demonstrate that we can add value. There is so much choice out there in the marketplace for clients to book online, direct with a supplier, or with a rival TMC, that customers need to see a tangible value in using us for their travel requirements,” said Milne.

“The economic outlook is still challenging, but we are confident about our growth in 2012. As in any recession, some companies fair better than others depending on the nature of their business. Corporate Traveller has a wide client base – a total of 1,500 clients across 50 industry sectors – so we are less vulnerable to a drop in trading in one particular sector,” he added.

Gary Marshall
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Gary Marshall
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