Hogg Robinson Group (HRG) has said growth in use of online self-booking of travel has put further “downward pressure” on the company’s revenue.
In the travel management firm’s half-year results, it showed revenue fell 4 per cent from £162.3 million to £155.9 million, although pre-tax profits were up 26 per cent for the six months ending September 30.
HRG reported that 49 per cent of all client travel bookings used self-booking for the first half of 2015 – a new high and up 3 per cent from the previous six months. In the UK the figure was 58 per cent, up from 53 per cent last year.
HRG said: “It is worth remembering that while revenue to HRG may reduce in the short term as a result of this shift, once the cost associated has been re-directed or lost, we expect our margins to increase.”
The TMC cited “cost reduction actions” for an improvement in operating profit margin from 10.8 per cent to 12.3 per cent.
The financial results showed air travel bookings accounted for 47 per cent of all bookings in the first half of 2015, rail 17 per cent and hotels 28 per cent. Client travel transactions rose 2 per cent and client travel spend fell 2 per cent.
HRG said it expects to deliver a full-year performance broadly in line with market expectations.
There was positive news for HRG’s service Fraedom, aimed at the unmanaged and individual travel sector, as it delivered a 10 per cent rise in revenue and 17 per cent increase in underlying operating profit.
HRG CEO David Radcliffe said: "This is a positive first-half performance, which reflects the ongoing work we are undertaking to reshape and realign the business to current and future market conditions.
“In particular, we are encouraged by our profit growth and the continued reduction of net debt. Fraedom continues to grow and it is pleasing to see the benefits of our proprietary technology continuing to win us business. We look to further accelerate its growth and invest in new technology across the Group,” he added.
HRG were placed at number two in BBT's Leading 50 UK TMCs.