7 DECEMBER 2009
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David Radcliffe is the CEO of Hogg Robinson Group (HRG), one of the leading international corporate travel services companies operating in nearly 120 countries around the world. HRG’s client base spans a broad range of industry sectors including: automotive, banking and finance, manufacturing, oil and gas, pharmaceutical and telecoms. Mr Radcliffe has worked in the business travel sector for over 30 years, and is a respected and popular figure in the industry.
“2009 has been a challenging year for the travel industry and business travel has been no exception to the rule. The global economic crisis has forced companies to rethink the way they travel, by questioning the need to travel and by keeping a close eye on budgets.
Unlike previous recessions, this one has been markedly different. Whereas other crises have been consumer oriented, what we are now facing is something that has its roots in the financial systems and is affecting whole corporations. We don’t expect the recovery to be quick and it may not be painless, but levels will return – the unknowns include when, how and in what shape.
The way companies have been purchasing business travel has changed over the past year, with a sharp refocus on value. Corporates want to see their money go further. During the recession we have seen companies downgrading from Business Class to Economy, particularly on short haul flights, and advanced bookings and pre-trip approvals have also become commonplace, as companies look to gain better visibility of their travel spend. This has started to change, especially in the Far East where the economy is showing small signs of recovery and restrictions on travel have started to ease. In Europe and the US the picture is mixed and the future remains difficult to predict.
We expect some of the fiscal discipline and justification of travel to continue once the economy picks up. It is good business sense to question the value of travel. However, we strongly believe that there will always be a need for face-to-face meetings. Human beings need to meet each other to do business, a handshake after all goes a long way. Because the nature of corporate travel has changed, the use of meeting technology such as video conferencing will continue to have a place in the mix of doing business.
The biggest challenge for corporates over the next four to five years will be to maximise the benefits of travel expenditure. As the economy emerges from the recession, the need to travel will increase as new business opportunities arise. The challenge lies in managing travel expenditure to generate the most value and ensuring there are policies and mechanisms in place to facilitate this process. Travel Management Companies play an important role in this scenario, by ensuring companies can choose from the best available fares to suit their travel needs.”
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