ABTN editor Martin Ferguson talks to the chief executive
The spring ash cloud crisis plunged the corporate travel community into unprecedented chaos. The airspace lockdown over most of Europe triggered a frantic scramble between travel managers and their travel management companies to repatriate their stranded road warriors.
However, though it wasn't obvious at the time, this particular cloud had an unusual silver lining for the intermediary community. If ever there was any doubt about the role and value of the travel management company (TMC), the April mayhem was the perfect stage to show just how the agency can really perform during the corporate's hour of need.
Yes, it was still the last thing the low-margin business needed after 18 months in the doldrums, and at a time when, economically, things were starting to look a little brighter.
But as these resilient operations tend to do, it was brushed off casually - though probably with an element of tongue in cheek - as ‘just another day at the office'.
HRG was among the many TMCs to receive its gold star for how to cope in a crisis from clients. And having made great efforts to streamline its global operation throughout the financial crisis, the Basingstoke-headquartered PLC propelled from the ash crisis into a solid set of first quarter results (a 6% year-on-year rise in client revenue at a constant currency for April-June).
Its chief executive, David Radcliffe, remains bullishly optimistic about the future. When asked about the potential impact of the soon-to-be-announced public sector cuts, he swerves any notion that the country is poised for a double-dip recession, preferring to concentrate on where the opportunities lie.
"Like many other companies we are engaged with government departments talking to them about how we can save them money," he says.
"I am still viewing this [situation] opportunistically, as companies like HRG have a track record of saving government departments money.
"If we can continue to play our part in helping reduce cost while at the same time keep the government running effectively then we'll be delighted."
Radcliffe does acknowledge, however, that the goal posts in public sector travel are shifting dramatically, and that managing government travel is entering a new phase. But he is confident the company can adapt quickly.
"Data is going to be key. Like any government around the world, it's never easy to get hard and fast information on what it is actually spending on travel and how it could spend better.
"We must obtain the right data and advise what kind of savings can be make on that expenditure."
I ask the chief executive what he thinks of the Coalition's determination to make swinging cuts, about taxation on the travel sector and its opposition to Heathrow expansion. Ever the diplomat, Radcliffe will not be drawn into taking political sides, though he does have strong opinions.
"As a guy that runs a business I think what the government is trying to do is well overdue: you can't keep spending more than you're earning. There is no doubt we will see both good and bad come out of this.
"On the one hand I've been encouraged by the [government's] words about not wanting to do anything that slows business down. But I remain cautious because I have not yet seen any evidence."
"I believe high taxation on people travelling is harming business travel and their ability to do business. I'd like to see something done there. I'm not convinced they [politicians] couldn't do something with minimum financial impact on government but with good impact on business."
Radcliffe also urges the media and travel sector not to talk down the business, warning there could be a danger of provoking over-sensitivity in the market place.
"In the first half [of our financial year] from April onwards we have actually seen some pretty encouraging signs, but if we are not careful, in terms of corporate travel, caution will prevail based on things we think might happen and not on the facts. Companies are going to be pulling their horns in and start slowing down and it will become a self-fulfilling prophecy. We must not snuff out the positive early signs."
On the subject of Heathrow, Radcliffe was at great pains to avoid headlines that would have him demanding politicians back down on opposition to a third runway.
But he says: "I'm for expansion of anything that stimulates business and business travel."
"Specifically on Heathrow, and without wanting to be political, I am an expansionist. We have a good international airport, one of the best in the English-speaking world that connects to destinations all over the world. I think it would be a great pity if we threw away the chance to capitilise on that."
And what of his own company's future? After the last two chaotic years, HRG has entered what appears to be a period of stability. Radcliffe says the company came through the recession in "good shape" and reveales that he may be ready to acquire and expand the global business should the right opportunities arise. But in terms of continued success, he identifies two areas that will be critical in the coming years.
"Technology and staff," he exclaims.
"Good people supplying a first class service, and excellent tech. If you mismatch these you have a real problem with the clients. So it has to be in synch."
He bemoanes the fact the recession meant scores of quality, experienced staff were lost to the industry, but says HRG was in a position to be able to call on many staff who had left the business. The number of frontline consultants working from home has also grown to more than 300, he says.
In terms of the broader industry, Radcliffe says there is a desperate need for better processes and cross-sector efficiency.
"The industry is far too disparate. We need to create common rules of engagement so we have common technology in some places, not in all, as we all have to be competitive, but there are too many [different technologies and processes] out there meaning, by definition, it's inefficient.
"Bookings systems and their inability to link across the globe need to be addressed. And also mid and back office systems need more commonality.
"All of this leads back to how we get data. For a client to get quality data without having to use the same company across the world is still very difficult."
At the National Business Travel Association conference in Houston last month, a panel of chief executives said that Europe was the last economic region to emerge from the depths of the recession. They agreed that growth in emerging markets - particularly India, China and Latin America - had eased any pressure felt in EMEA. While Radcliffe concurrs, he says it would be wrong to concentrate too much on the success of new and growing markets.
"There's no doubt North America has started to come out of this firing on more cylinders than Europe," he says.
"Asia is also coming out much faster. Europe has been slower, though for us as a company new signings have cushioned the impact of the slowdown. Europe is very important to us. And there is nothing worse than regions that pick up dramatically and slow down just as fast."
He observes: "When you run a company globally, you've got to keep your eye on the ball to make sure that whatever resource you're putting in is appropriate for the pick up you expect. Because one of the things we've learned in this global recession is that when people clamp down on their expenditure they are able to do it very quickly indeed. And you've got to make sure you have a flexible work force that can flex with it."
There is no doubt that managing UK domestic travel is at a pivotal moment. HRG seems confident, without being complacent, that it is ready for the "new normal". Only time will tell if the positive vibe continues to spread, or if the UK will fall victim to corporate caution and the Tories' savage attacks on public spending.