A new travel experience

WITH the global downturn having affected virtually all businesses regardless of sector, size or structure, service-oriented industries reliant on a buoyant marketplace have renewed their focus on key priorities and services to ensure survival.

This is especially true for the corporate travel sector in Western Australia, which took a serious hit when the impact of the global financial crisis was felt towards the end of last year.

These corporate agencies rely on strong client connections and positive buying relationships with airlines, hotels, and car hire companies.

Some corporate travel agencies, or travel management companies (TMCs) as they are known in the industry, have experienced a drop in demand for their services of at least 25 per cent since the financial crisis, while others felt a crash closer to 40 per cent.

This includes smaller operators focused on leisure travel with room for some limited corporate travel servicing local SMEs, as well as the sector's main players responsible for the executive movements of the world's largest multinationals.

Flight Centre's corporate arm, FCm Travel Solutions, is a leading TMC in WA.

Last financial year, the company reached an annual total turnover of more than $120 million for WA, thanks largely to its 50 corporate staff servicing key clients including WesTrac, Newmont Mining, Gold Fields and Iluka.

FCm state manager WA, Stephan van Arnhem, admits while the downturn has affected his business, it presents an opportunity to improve the service given to clients.

"I think it's a great chance for our clients to look at their travel policy, to see whether they can identify leakage, and see if they can make further savings for them to get ready when things pick up again," Mr van Arnhem told Business Class.

"Furthermore, I would say lots of clients see this as an opportunity to see what's out in the marketplace.

"Clients are sniffing around to make sure they are getting the correct deals, and they are going out to tender or trialling out a new TMC to see what they can offer and making sure we are doing the right thing by them."

At the smaller end of the corporate scale is Travellers Choice, a buying-marketing group currently representing about 35 independent agents in WA.

Travellers Choice managing director Gary Allomes said he still served some corporate clients, although his company was more leisure-related, and business dropped dramatically last year.

"The impact has been quite dramatic in terms of downturn and our agents business and our business in some cases is down anywhere between 15 and 40 per cent on the previous year," he said.

Globetrotter Corporate Travel has also felt the bite of the downturn.

Globetrotter managing director John Battley said demand fell by 25 per cent toward the end of the year and has been "bopping along the bottom" ever since.

"Businesses, particularly in the resource and oil and gas, they're just generally running a lot tighter budgets, every industry is, and that means where before they were travelling business class domestically, say to Sydney because it's more than three hours, a lot of companies downgraded everybody to economy," he said.

Across the board, TCMs agree corporate travel has been affected by changed travel plans - the use of lower quality hotels, taking shorter trips, and even the greater use of video conferencing.

However, none of the TCMs spoken to by Business Class believes the increased use of video conferencing will take too much away from their business, all suggesting there is no substitute for face-to-face contact with potential or existing business partners.