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Severnside Consulting founder Chris Pouney asks: when will global companies embrace business travel in the Middle East?
WHILE IT’S THE BRIC countries that seem to get the headlines, travel managers should be looking more closely at the Middle East for opportunities to drive cost savings and improve services.
Historically, it was really only energy companies that managed corporate travel well here. But with many organisations beefing up their presence in the Gulf Cooperation Council (GCC) states, it is time for companies to wake up to the potential and implement processes properly before they become too ingrained to change.
So why is it so difficult to see all your spend from the Middle East? Among the challenges are:
• Lack of data due to the number of people not using corporate travel management companies (TMCs) for air bookings.
• Low penetration of payment-card solutions.
• Per diem payments, sometimes in cash, are normal here.
• Hotels booked by meeting organisers locally, rather than at origin along with the flight booking.
• Stories of suppliers offering cash incentives to travel bookers who go “off programme” are common.
So why should global organisations focus on the Middle East? Demographics Despite the Arab Spring, stability exists in the financial powerhouses of Qatar, the Kingdom of Saudi Arabia and the UAE to name but a few. There is also a young and technologically savvy population – the UAE, for example, has almost twice the number of mobile phones per capita than the US.
The region is growing in global importance Some describe a shift in global power eastwards from north America and western Europe to the Middle East and beyond. From the part ownership of financial corporations by Middle East investors to the growing influence of the region’s huge airline industry and sponsorship of major western sporting teams, the Middle East’s global influence is expanding.
Travel management infrastructure is largely in place, but not always used Some TMCs are incredibly sophisticated, high-quality low-cost carriers link major markets, all major global distribution systems are here, and online booking tools are available – so why are many global buyers not using them?
Geography While the Middle East is small in terms of size compared with, say, APAC, and significant cultural differences exist across the region, there is commonality of language and travelling behaviour, and only small variances in time zones. These factors make it ripe for building a healthy, functioning and efficient travel programme here. One service centre supporting all GCC countries has already been implemented by a number of sophisticated buyers.
Women in business Some of the traditionally-held perceptions in this area that women can’t be successful are changing. Recently, Arabian Business magazine published a “100 Most Powerful Arab Women” list. But there is still a way to go, of course – in the Global Gender Gap Report 2011 by the World Economic Forum, no Middle East country ranked in the top 100 of the 135 nations covered.
So how can you better manage travel in this region? Review your data Are you really seeing the true picture from your TMC or card provider? This can be used as leverage for better rates with your suppliers.
Look at governance If your travel programme sees an EMEA manager based in Europe managing 30-plus countries, it’s unlikely he or she will have the time to manage this spend properly. Companies who manage travel well have someone to take a strategic view, close enough to the action but not immersed in the operations.
Communicate and collaborate No-one likes to simply be given a policy or project to implement without any consultation, but in a recent survey of global travel managers conducted by the Association of Corporate Travel Executives, only 24 per cent engaged with their Middle East-based team prior to launch of their global travel policy.
Trust your TMC Empower them to benchmark your service and rates with other organisations of a similar size, look and feel; install a payment model to ensure transparency of spend; and conduct regular audits so that you can demonstrate to senior local management that they are being effective.
Understand the drivers of your company culture in this region Words like “consolidate” and “centralise” do not encourage cooperation; instead, talk of “co-ordination” and “communication” is much better received on the ground.
CHRIS POUNEY, founder of Severnside Consulting, has more than 20 years of experience in business travel, and provides independent travel management support to clients across multiple industry sectors. Chris splits his time between the UK and UAE, where he is currently working on a detailed research paper, entitled Project Sahar. To be launched in autumn 2012, the paper will include a detailed buyer benchmarking exercise that, for the first time, will identify best-in-class travel processes in this region.