By Monika Canty
Is a recovery in sight for the loss-hit corporate sector?
Corporate travel bans were imposed throughout the world in 2009 as companies fought to ride out the global financial crisis. But as a fragile economic recovery takes hold, has business travel spending resumed? Ahead of the Business Travel Show ATN asks exhibitors if a recovery is in sight for business travel.
Abdulla Abu Khamseen, executive general manager, Kanoo Travel
In general we have noticed positive signs of economic stability from the main markets in the MENA region. Business travel has picked up in the last few months. We remain optimistic and look forward to a better 2011. In terms of travel spend, companies are going to be much smarter at budgeting travel costs and other T&E [travel and entertainment] related expenditure. We see more and more companies implementing strict controls on travel policies to keep costs down, and we will help them achieve those objectives. Travel companies will also have to be smarter at controlling their costs and concentrate on offering quality service to their customers in order to remain profitable in the business. The travel industry, post-recession, will never be the same as we experienced before. Times have changed and so has the way we do business.
Paras Dhamecha, executive director, Empire Aviation Group
Our charter operations have performed very well so far this year, with a 10 percent increase in charter bookings, since the start of the year. In fact, the latter half of 2010 has definitely seen an up-swing in the executive charter market. We have also seen a substantial increase in jet charters for business clients flying into emerging markets such as Iraq and Afghanistan. Given the momentum we have seen develop through the course of 2010 so far, we are confident that we will continue to see an increase in charter business through the end of the year and into 2011, well ahead of the same period last year. It is very difficult to predict the future in the current global situation but we remain cautiously optimistic about the prospects.
Gina Costa, commercial director, Hertz Middle East and Africa
From a regional perspective, we are seeing a recovery from some countries. However the approach to buying practices are changing with a focus on compliancy. Service and quality are still very much part of the expectation of the business traveller, which fits well with our brand. I am not sure business travel budgets are increasing, but business travel is back. This means that travel freezes have been lifted from certain companies; however companies seem to be more aware of what they are spending these days on travel and looking closely at their commercial partnerships and suppliers.
Asim Arshad, CEO, Orient Travel
Business levels have been steady this year and in some months there has been a slight increase in travel. But travel companies are facing a challenge as there is no reduction in [operational] costs whilst income is being diluted with lower fares, smaller service fees from LCCs and business lost to airlines due to their online offers. There has also been an increase in online booking portals who have been promoting aggressively, which has also taken a considerable amount of business. The travel budgets have not increased but the business has been steady since last year. We have to take a reality check and it would be futile to compare it to the peaks of pre-recession.
Paulo De Renzis, area commercial manager, British Airways
We are seeing positive indications in all of the major markets that we operate, and it seems that more companies are beginning to see the merits of increasing their travel budgets in 2010. However, I think there is still a long way to go before we see travel budgets being re-instated to pre-recession levels. Whilst we are not seeing anything specific that would cause us to be concerned about the strength of the economic recovery, we are aware that there are a significant number of experts and analysts expressing such concerns. I think one of the challenges for the industry is accurately gauging the potential strength / fragility of the recovery in the context of the global environment.
John Morgan, vice president commercial, Royal Jet
Over the last 12 months, the Middle East business aviation sector has followed an interesting curve – an upward curve. The sector has been resilient in continuing to show a 15 percent increase in charter bookings. The market is certainly recovering and we envisage that this recovery will continue over the next few months. There is, of course, still significant pressure on travel budgets. However, business must continue and companies are seeking the most cost-effective way to travel and visit their key customers and partners. A recent study found that for any regional business trip involving several senior executives, a private jet will almost always be more cost effective than commercial airlines, when taking into account the value of wasted executive time.
Tim Waddell, director of marketing, Al Shamel Travel
The corporate travel sector is certainly starting to bounce back from the recession and travel volume is on the increase in most companies. Our own growth in 2010 is unprecedented (through new sales) and, especially in the UAE, we are lucky enough to have hardly noticed the recession. Going forward we are sure that 2011 will continue the pre-recession trend of expansive growth. When it comes to travel spend, many corporations are look at restructuring their travel policies to allow more travel within existing budgets before making major increases. Low cost carriers are becoming more widely accepted as the core choice for inter-regional travel and class of travel rules are being applied more strictly. As the recession winds down and companies need to travel more for continued growth, budgets will have to be analysed, but consolidation and savings – from travel spend, online adoption and expense management automation – will offset large increases in the year ahead for the smart company director.
Carol Maddison, UAE manager, VisitBritain
Figures collated by VisitBritain show that business travel to the UK from the UAE has picked up in 2010 on the back of last year’s slowdown as a result of the global recession, which hit Britain’s economy hard. Globally business visits to Britain have risen by three percent so far this year compared with the same period last year, however numbers have not returned to their pre-recession levels yet. It is great to see that visitor numbers from the UAE to the UK are picking up after last year’s slowdown, and we are anticipating that this growth will continue for the rest for 2010. The high proportion of people continuing to travel from Dubai to Britain for business purposes also proves that commerce between the two countries is a strong as ever.
Andrew Fyfe, Virgin Atlantic
Virgin Atlantic has so far come through the economic downturn reasonably well after matching capacity to demand; and our flights to Dubai have remained relatively unaffected. Load factors to and from the UK held up pretty well during the downturn and we are optimistic for next year, provided the remainder of 2010 shows signs of growth.For all the latest travel news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.