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Carlson Wagonlit’s CEO Douglas Anderson has said he is “cautiously optimistic” about 2011, but warned it would not be an easy ride.
In an exclusive interview with ABTN, Anderson said he expects business travel to continue to rise in 2011, after a strong 2010.
For him, 2011 will represent a normalising year, with the major economies out of the woods in terms of a double-dip recession.
However, “I don’t think we are there yet,” he said. “I think there’s still enough uncertainty around.
“Governments are going to spend less, it’s uncertain where the price of energy is headed, and instability in the Middle East could create a much broader area of instability.”
The increase in the price of oil is the main thing which could cause a fall in business travel, said Anderson, due to sheer cost.
“There is a tipping point,” he said. “There’s a point where price starts to affect demand, but I don’t think we are there yet.
“There’s also a point where supply starts to contract as airlines decide it’s not economical to support the capacity they have in the market.”
Airlines will take capacity out if needed, said Anderson, as it’s a strategy that has worked in the past.
“I think the last two years has been the first concerted effort on behalf of the world’s major airlines to manage capacity in a rigorous way, and it worked well for them,” he said.
“I think they will keep their finger on that button and if oil price goes up the cost of travel is going to be much more expensive because supply is going to be curtailed.”
Despite the recent political upheavals and future threats to travel, Anderson said there has been little to no increased demand for telepresence.
Companies that have invested in the virtual meetings technology are continuing to use it, but they are continuing to travel as well.
The major uptake in telepresence over the last few years, since CWT started offering the technology, has been more down to cost, as businesses sought to cut their travel budgets during the recession.
“I think the step change occurred during the slowdown, when it became more important to save money and they looked at telepresence to be one of the levers they could pull to reduce their travel spend,” said Anderson.