According to the BTN Asia Pacific/Airclaims survey 2004, now in its third edition, services provided by travel agents are still very much valued by corporate travel managers.
Respondents said the services they rated highly included “personal advice, someone to resolve problems” (50 per cent) and “handling a complex itinerary” (42 per cent).
Agents acknowledge their business model has had to change as more airlines reduce or cut agent commissions as they struggle to lower their costs to compete with low-cost carriers, and more travellers start to make their travel purchases online.
Most agents see their businesses evolving and in fact only nine per cent of those surveyed feel the model will not change.
The majority (41 per cent) surveyed see the service fee-based model as the model of the future and 39 per cent said it was necessary to provide Internet-based services.
Agents are beginning to find the Internet an essential tool especially in communicating with clients and disseminating information about new products.
Suppliers upbeat
Things are definitely looking up for travel suppliers after the downturns in the business travel
sector and in the region in 2002 and 2003. The overall picture provided by the 2004 report painted a picture that appeared exciting and dynamic, with a significant majority of all
respondents expecting major changes in their business – and being prepared to face up to the challenge.
Some key findings for corporate travel suppliers (which included hotels, airlines, GDSs, credit card companies and car hire companies) were as follows:
Travel suppliers estimated an average growth for international air travel for this year of around eight per cent. Sixty per cent expect growth of above five per cent and 35 per cent expect double-digit growth or more. Last year, even when a strong rebound after SARS might have been expected, only 15 per cent expected double digit growth.
Looking at the areas of the travel business most influenced by the Internet (in terms of the
proportion of revenues generated) suppliers suggested the airline and hotel businesses were top of the list, with tour operators the least impacted. Again, a broad band of between 20 per cent and 50 per cent of revenues from Internet sales was seen as being the norm across the travel business.
The view is hotels and resorts, IT suppliers, GDSs and airlines would see the biggest volume growth, and credit card companies and banks, IT suppliers and GDSs were singled out as the likely centres of profitability. There was sharp contrast between the volume growth expected of airlines and their level of profitability. Few suppliers believed travel agencies would register higher growth, contrasting with the views of the travel agents.
More than 70 per cent of suppliers believe the hotel industry in Asia-Pacific will consolidate in the next five years. However, there is no agreement about the “right” market balance between luxury and mid-market hotels.
Forty-eight per cent of the respondents think the business market is growing at a faster rate than the leisure market, with about 30 per cent disagreeing with that view.
Security issues
On the part of corporate travel buyers, other than “value for money”, the biggest stated issue in Asia-Pacific is passenger security (34 per cent) – see other story on page 6 – followed by seat availability (21 per cent) and flight frequency (17 per cent).
This response reveals a surprisingly high level of security concerns, which are expected to influence managers’ guidance on travel options for corporate travellers.
In fact, 25 per cent of respondents expressed caution about a trip to or within the Asia-Pacific region.
A picture emerged of an increasingly wired corporate travel workforce.
Some 77 per cent of travellers had a mobile phone, 40 per cent a laptop, 18 per cent a PDA, and 14 per cent a laptop with wireless facility.
However not more than 39 per cent benefit from a corporate card while on the move, with 50 per cent having to use their own money and make a claim later.
The response from corporate travel managers has a decidedly optimistic tone, with an average of 69.3 per cent forecasting growth in budgets and 81.5 per cent forecasting growth in flights expected in 2005.
For larger companies, between 60 and 80 per cent said growth in budgets and flights was expected.
The relative growth in these two elements indicates the decline in premium traffic may be slowing, even stabilising.
Around 70 per cent of travel managers indicated an increase in both air travel and budgets for next year and among them, 17 per cent expect to see growth of 11 to 20 per cent, or more, for flights or budgets.
The survey was carried out during August/September 2004 among 469 respondents from the corporate travel sector including agents, suppliers and corporate travel managers in 19 countries across the Asia-Pacific.
