The fall out from the global credit crunch, heightened security concerns, Open Skies and continued attention on climate change will push companies to tighten travel management policies even more in 2008, warned Hogg Robinson Group in a Jan. 8 report. With business travel a barometer of the global economic climate, and corporate travel often a company's second largest controllable cost, corporate travel budgets will be under increased scrutiny with corporate services companies playing an important role in helping organizations to manage such costs, according to HRG.
The ability of corporate travel management companies to track and provide real time information on employee movements will continue to be a business necessity in 2008, and the coming year will also see a continued focus on environmental concerns in the travel industry, according to HRG. The Open Skies agreement between the United States and European Union, set to take effect in March, is good news for travelers, said HRG chief executive David Radcliffe. Open Skies expected to generate 26 million more airline passengers over the next five years, intensifying congestion problems at European and U.S. international hub airports.
"Open Skies is good news for most airlines and travelers. Paving the way for airline expansion on both sides of the Atlantic, it should increase travel options for our corporate travel customers and greater competition is likely to generate lower fares - particularly welcome in the current price sensitive climate. However, there are likely to be some knock on effects; some larger airlines may be forced to give up their monopoly over flight slots, which could restrict their future growth. In addition, Open Skies may spur a wave of consolidation as airlines scramble to secure prime slots," Radcliffe said.
Key emerging travel markets in 2008 will be the BRIC economies (Brazil, Russia, India and China), according to the report, and an Open Skies agreement between China and the U.S. is expected to increase accessibility and corporate travel to that market.
"It is another challenging year for the corporate travel industry but it is also one which continues to provide opportunity," said Radcliffe.