Unless companies are prepared to pay for the travel services they receive, there may be “a lot less choice” of TMCs and airlines in the European market in the future.
The warning came from Jim Tweedie, CWT's executive vp North Europe speaking at a meeting of the Swedish Business Travel Association (SBTA) in Gothenburg.
Mr Tweedie told SBTA members that choice came at a price. “The more we want today, the more it costs, the more we should expect to pay. For some strange reason, that form of logic doesn't seem to work in travel the way it does in other areas of business.
“The problem is unless someone is prepared to pay for the service they receive, there is the risk that a lot less choice will be available in the European market in future. And that is not healthy for anyone,” he said.
The fee structure in Sweden and many other countries meant that TMCs provided a full range of services for one transaction fee. This fee often did not cover their costs and they received no payment until the ticket was issued. He said this was not a good business model.
He said airlines faced similar problems over payments for their services.
“There will be an even greater price to pay, if we do not find a solution to what has become a critical issue in the world of corporate travel,” he said.
“Airlines and TMCs will continue to struggle to make any sort of profit. That is a fact – an unemotional plain fact.
“That is not a healthy position to be in – and it can only have a negative impact on the business travel market as a whole. That cannot be a good thing.
“Travel is not simply a commodity. The ‘corporate client' today often wants a fixed price for a product or service throughout the lifetime of the contract – regardless of any changes there might be to the shape, size and style of service. Is that reasonable? I don't think so.”