BTN Europe presents an overview of business travel and MICE predictions for this year
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One stop services offered by travel management companies (TMCs) which focus on air spend are “obsolete”, John MacOmish, director of business strategy for BSI, said.
Mr MacOmish, whose company is one of the UK's largest hotel booking companies, said that corporates could be “unwittingly increasing their cost of travel” if they opted for a one-stop shop solution. “Air travel probably no longer takes first place as a corporate's main area of travel spend. The impact of fierce competition in the airline market has seen the estimated hotel accommodation expenditure in Europe at $140 billion per annum now being greater than that of air travel.
“It accounts for at least 50% of a company's overall travel spend - and that's without considering the cost of events and meetings,” he said. Mr MacOmish said that corporates still went to TMCs to book hotels to go with air travel. But he said that by going to a TMC or booking accommodation direct, they were missing out on savings of at least 15% on more than half their travel budget.
“The problem is that a TMC still relies on the GDS. The result is that clients are not getting best value or best practice because, in order to offer an effective cost-management programme that produces the highest level of savings, a supplier must be influential at the point of procurement - a principle that is the foundation of a specialist's offer,” he said.
M & C hotels report leap in profits
Millennium and Copthorne Hotels said pre-tax profits for the first half of 2005 rose to £40.1m, more than double the £18.6m figure for the same period in 2004.The chain reported revenue up 8% to £81 compared with £263.6m in 2004, revenue per available room (revPAR) was up 7% and occupancy rose to 73.9% compared to 70.3%.
The group runs 91 properties in Europe, America, the Middle East, Asia and New Zealand. Kwek Leng Beng, M & C's chairman, said the strongest performance was in New York where revPar grew by 17.8%. But revPAR in the group's London properties also rose by 7.3% while in the UK regions it grew by 8.9% and in France and Germany where M & C have four properties, it increased by 11.8%. Occupancy in these two countries also grew.
During the period, the group signed agreements to run two more properties in the UK but there are no current plans for more expansion on the continent.