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September 2022, Virtual
September 29 2022, Virtual
David Chapple, event director of the Business Travel Show, looks at how to tackle and survive the economic downturn
When people ask how the current economic climate is affecting the business travel industry my answer is that it is affecting it significantly and totally but non-exclusively. The economic downturn certainly hasn't been picky about the industries it has impacted, the companies it has affected and the people it has worried.
Travellers are faced with increasing prices but decreasing choices as all airlines cut back on routes and capacity. Buyers are finding that their jobs are becoming increasingly more difficult as they are faced with disappearing routes and flights which force them to reconsider their preferred supplier agreements. And talking of suppliers, well they're not exactly rubbing their hands at the moment, are they? Everyone's being forced to either drop - or consider dropping - prices and cut costs. Oil prices may have crept down from the horrendous peak they reached earlier in the year, but there is talk that oil output will be cut back with the aim of sending those prices back up again. This will leave many airlines trying to make ends meet while others may be forced to bow out completely. But it's not just the airline industry that's suffering; the hotel industry, which has enjoyed a boom era for many years, is also watching with baited breathe as its bubble begins to burst in line with the bursting of the property bubble. Hotels everywhere are being forced to drop prices and, in the forthcoming months, that will include London hotels too.
So the question now is whether things are likely to get better over the next six/twelve months? Well the good news is that, yes, I think that things are likely to improve over the next year. But the bad news is it's very doubtful that the economy and the impact it's having on the travel industry will have turned around within the next six months.
Quite simply, we've had sixteen years of growth and economic prosperity and this downturn has come as a major shock to us all. House prices have dropped, banks have been rescued and we're entering - if we're not already in it, that is - a global recession. People are wondering when it's going to stop. Commentators have said things will start to improve by Q3 2009. The election of Barack Obama as President of the United States is filling people with optimism. We - travellers, bookers, buyers and suppliers - want to be optimistic, we really do, but we are just a bit too scared. So, we're being cautious instead. Consumers have stopped spending. Buyers are being told to stop buying. Companies are spending less on business trips and either freezing unnecessary trips or, in many cases, simply postponing them until things start looking up. Travellers who are making trips are being asked to make cheaper ones. Dropping from business to economy. Staying in 3 star not 4 star hotels. Getting the bus from the airport rather than a chauffeur. And while this is all going on, suppliers are trying to convince us all that everything is okay.
So who will emerge from this unscathed? People who make money and save money survive. People who spend money are in jeopardy. In the business travel industry, the people in the best position right now are the buyers. In times of recession - when costs need to be cut and budgets need to work harder - then companies need the expertise of a professional buyer more than ever before. But that means the pressure's on - more than ever before - for that buyer to be on the top of his/her game.
What can suppliers do to try and survive? This is the million dollar question isn't it? But what I can say is that suppliers need to resist the temptation to diversify. In times of recession, moving into areas in which you have no expertise is the worst thing you can do. Instead, you need to concentrate on the things you do well. Stay true to your core values, core business and core customers. Aim to keep your existing customers happy. Look after your relationships with your bigger corporate clients. Help them through the hard times now and they will repay you when the good times return.
Quite simply, it's more important than ever to stay in the minds of your customers - and in the minds of potential new ones, too - and to stay ahead of the competition, and there's no better way to do this than face to face.
At the Business Travel Show you can meet current clients, new suppliers and hundreds of prospects under one roof in one day. To register for a free visitor pass, simply visit www.businesstravelshow.com.
The Business Travel Show takes place at Earls Court 2, in London on February 10-12, 2009.