Carlson Wagonlit Travel’s (CWT) director of programme management and business development, Nigel Turner, believes its ‘base business’ is not expanding because buyers are becoming smarter about their travel spend.
Turner told BBT that businesses haven’t reduced travel expenditure but are becoming more effective about how they are spending it.
Base business means the travel expenditure on flights, hotels and surface transport that is transacted through CWT by its existing customers.
“Part of our value proposition is working with customers to help them manage this expenditure more efficiently, which is reflected in some changing their travel programmes and travel policies to take advantage of these savings,” Turner said.
“Examples of this may be using different booking methods, such as online v phone, different types of ticket e.g. off-peak/restricted changes/advance booking period or alternative carriers or hotels. So transactions may be showing some increase but not traffic.”
He was speaking to BBT after the release of CWT’s end of year financial results. The figures showed overall sales in 2013 fell by 2.7 per cent to $26.9 billion, a decrease the TMC put down to reduced demand for US military and government travel.
In the UK and Ireland, CWT’s sales remained flat with a decrease of 0.4 per cent at £1.2 billion compared with 2012.
“The customer knows reducing the amount they travel could damage the business, so they still buy the same product but buy it smarter - booking tickets further in advance, more restrictive tickets, travelling off-peak or combing two trips into one,” said Turner.
“It’s not surprising that as the economy picks up people are getting better about making their money go further.
“The amount people are travelling hasn’t dropped but they are definitely buying smarter.”
Despite a drop in overall sales CWT recorded strong annual growth in the Asia Pacific region for 2013, the company’s end of year financial results showed.
The figures showed transactions increased by 4.5 per cent in Asia Pacific, enhanced by operations in China and Japan. There was also strong growth in Hong Kong with a 23 per cent increase in 2013 compared to the previous year.
Turner said one of the main areas to target for growth in 2014 will be in mobile technology. “I feel the thing travel buyers want the most is on-the-go technology, the big shift change is people are less-office based now.
“We often buy things in our personal life that sometimes is hard to do in the business world, so we are trying to replicate that for the travel buyer.”