There was limited optimism regarding the recovery of
business travel among suppliers and TMCs on day one of the inaugural Business
Travel Show America, where a host of CEOs took to the virtual stage to debate
the current state of the industry.
Speaking in the opening session of the BTN Group’s new
event, Marriott CEO Arne Sorenson said business currently sits around 65 to 70
per cent below normal levels but had recovered from 90-plus per cent declines
globally in the early months of the coronavirus pandemic.
“Each week is a little better than the last. They [guest
numbers] are going up on the leisure side but it’s less quickly for business
transient. The groups business is the slowest of all, as well as long-haul
international travel.”
Chrissy Taylor, president and CEO at Enterprise Holdings, said:
“At our airport locations we’re seeing the same things as airlines – business
is really down – but it’s better in urban areas.”
Taylor said car hire has become the ‘go-to’ option for many
companies travelling domestically on business and noted that travel policies
have changed to allow longer trips.
“Business travel will be down for some time but there is
some optimism,” she said.
Taylor was among several speakers to note the importance of
trust and confidence in driving the recovery. “We have to work now to build
confidence and it will be a competitive advantage when the time comes. We all
have to make sure consumers feel comfortable when they travel.”
Sorenson, meanwhile, also urged more companies to return to
their offices and help stimulate economies.
“There are far too many companies remaining closed. For
goodness’ sake, it’s safer to go into the office than the grocery store,” he
said. “We have too many companies sometimes showing off by saying we’re staying
closed. What that does is withdraw those workers from the economy. We need to
take the steps to get back. I’m not saying everyone all at once, but we need to
take those preliminary steps.”
Taylor noted that although Enterprise had a put a hold on
travel in April, “we are a travel company and we want people moving and collaborating.
We’ve had some international travel but the most important thing is that those
employees feel comfortable, that it’s their choice and that we know where they
are.”
The bosses of several TMCs, meanwhile, were quizzed on their
current circumstances and the development of new pricing models that would
leave agencies less exposed.
Kevin O’Malley, chairman and CEO
of Travel and Transport, said transactions were down 97 per cent in March and
April but in August were 91 per cent down.
“We have hundreds of people still
working and we have to control our cash-burn – including IT building out new
solutions – and we’re trying to do it in a zero-revenue environment,” said
O’Malley.
“We’ve had to look at pricing
models but there were already conversations about whether the model was broken.
It’s not about us getting paid more, it’s about making sure there’s enough
revenue coming in so we’re healthy on the other side when customers will really
need us again. We need to share the risk.”
O’Malley continued: “We’re having
conversations about a programme management fee as a fixed proportion, we’re
having conversations about [paying for] a minimum number of transactions per
month, others are talking about software as a service, some are talking about contact
fees. In all of this, customers have been very understanding.”
He believes business could return to 20 to 25 per cent by
the year’s end and gather pace in 2021.
JD O'Hara, CEO at Internova, said
the TMC is “recovering as we speak but it’s slow and steady” and said business
had slumped to similar levels described by O’Malley during the pandemic but
could be back to pre-Covid levels by the end of 2021.
“We’re in a cash conservation
mode. We decided we’d furlough [staff] where we can but not to the point where
we can’t service our clients. We’re looking at transactions day by day and
revenue, and we’ll continue to bring employees back. We have to service the
revenue.”