Business travel to pick up in a year

Business travel to pick up in a year

The business travel sector will pick up towards the end of 2010, the head of the world’s largest business travel association has predicted.

Kevin Maguire, chairman of the National Business Travel Association said “the end of 2010/ Q1 2011”, was the earliest travel management companies could expect to see a return to growth.

However, the effects of the global recession have led to a paradigm shift in the way we travel – and will not return to the way it was.

Speaking at this year’s Advantage Conference at Heathrow, Maguire said: “There is light at the end of the tunnel, the problem is those lights are of an oncoming train.

“Things aren’t turning as fast as we think, but I don’t think they’ll drop much further. The situation is plateauing.

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“But it’s not going to be business as usual [when it does come back].

“We are not going back to the front of the aircraft and we are not going back to full service hotels.

“Travel is an easy hit. Downgrade your travel and it takes some of the bite out of downsizing your business.”

But Maguire warned that for every 35% of travel stripped out of a company, profits fall by 17% – and take three years to recover.

Maguire said the world was already starting to see the effects of a different type of business class travel, with a number of airlines reconfiguring their cabins.

This included Lufthansa taking out business class seats and replacing them with more economy.

And Boeing has been taking orders to increase the size of premium economy including in its new 787 Dreamliner (pictured), again at the expense of business seats.

NBTA’s president, Craig Banikowski, who is also Hilton’s director of global travel management, said the same thing was happening with luxury hotels.

“It is true that some five star properties are trying to get themselves reclassified as four star just to get included on travel management programmes.”

Banikowski said despite the changed landscape this was the best time for a travel management company to prove its worth.

“The TMC has to offer advisory services. It has to become an analyst of every aspect of the corporates travel patterns.

“Taking bookings is not where you make money,” he added.

Green issues will also be at the forefront of the way we travel in the future, despite being low on the priority list at present, Banikowski said.