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The Future of Corporate Travel – Today. A business model for a new world
 

The Future of Corporate Travel – Today. A business model for a new world

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Keynote of Bernard Harrop at NICT 2010, Istanbul (Next in Corporate Travel)

Keynote of Bernard Harrop at NICT 2010, Istanbul (Next in Corporate Travel)

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    The Future of Corporate Travel – Today. A business model for a new world The Future of Corporate Travel – Today. A business model for a new world Presentation Transcript

    • Bernard
Harrop
Head
of
Sustainability,
ICARUS
Europe,
 Institute
of
Travel
and
Meetings

    • ‘Next
in
Corporate
Travel
2010’




















Bernard
Harrop
 The
Future
of
Corporate
Travel
–
Today
 A
business
model
for
a
new
world
……
 IG
Management
 _________________________________________________________________________________ Advisers for Responsible Business Travel
    • 271

 6+

48
 365


    • SUCCESS
3
+
3
=
?

    • Todays
Goals
   To
discuss
the
changing
world
of
 business
travel
   Focus
on
Europe
   Look
at
life
from
a
pracPcal
 perspecPve
   Challenge
leadership
   Challenge
yourself

    • Todays
Objec0ves
   Size
doesn’t
maSer!!
   Same
principles
apply
   Buyer‐
Traveller
‐
ExecuPve
   Different
scale
   Right
applicaPon

    • Where
are
We
Today?
   Crisis
is
short‐term
event
–
soon

 return
to
normal
   Economic
recession
NOT
a
short
 term
event
   …how
will
travel
look
aer?
 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ 
   Economic/financial
indicators
 suggest
world
is
re‐emerging

   Future
=
repair
of
financial
system
 &
return
to
growth
   Fundamental
industry
restructuring
 now
required
 Sources: D. Swords, NBTA ICARUS…
    • Economists
Model:

    • Economists
Model:

Fix
Fix

2008
focus
on
cuDng
costs
–
damage
limita0on

    • Economists
Model:

Fix

‐

Stabilise
 Stabilise

 2009/2010
BoMoming
out
–
re‐think
the
strategy
Fix

2008
focus
on
cuDng
costs
–
damage
limita0on

    • Economists
Model:

Fix

‐

Stabilise
 Stabilise

 2009/2010
BoMoming
out
–
re‐think
the
strategy
Fix

2008
focus
on
cuDng
costs
–
damage
limita0on

    • Economists
Model:

Fix

‐

Stabilise

‐

Grow
 Grow

 2010/11
‐
move
to
the
‘new
normal’


 Stabilise

 2009/2010
BoMoming
out
–
re‐think
the
strategy
Fix

2008
focus
on
cuDng
costs
–
damage
limita0on

    • Economists
Model:

Fix

‐

Stabilise

‐

Grow
 Grow

 2010/11
‐
move
to
the
‘new
normal’


 Stabilise

 2009/2010
BoMoming
out
–
re‐think
the
strategy
Fix

2008
focus
on
cuDng
costs
–
damage
limita0on

    • AEA
Airlines
–
20m
Fewer
Passengers
in
2009
  RPKs
fell
4.5%
  Middle
East
&
Africa
was
posiPve
  PAX
fell
5.8%,
from
346m
to
c.
326m
  Load
factors
‐
0.3
points
to
76.0%
  Cross‐border
traffic
in
EU
was
‐
5.3%
  North
AtlanPc
‐
5.6%,
Far
East
‐5.9%
  Capacity
decreased
by
4.2%.
 Source: IATA/AEA
    • AEA
Airlines
–
Traffic
star0ng
to
return
  Sharp
rebound
in
business
travel
  Downturn
in
premium
travel
cyclical
and
not
permanent
  World
trade
is
rising
&
business
confidence
has
regained
pre‐recession
levels
  Premium
travel
rebounding
strongly
at
+20%
in
Q1
  Economy
travel
recovered
to
pre‐recession
levels
  Difficult
to
get
the
premium
yields
to
grow
at
same
rate
as
PAX
numbers


 Source: IATA/AEA
    • IATA/AEA
Forecasts
–
Look
Posi0ve
  Large
variaPons
by
market
  Non‐Japan,
Asia
&
‘emerging’
eco
+10%

“Our
sector
has
just
come
through
an
astonishing
year…….”

  Large
dev.
economies
‐10%
  Asian,
S
American
&
Middle
Eastern
 “The
crisis
has
not
receded
–
its
repercussions
will
be
felt
well
into
 conPnue
strong
growth
 the
future
….the
face
of
the
industry
will
be
changed
  Europe
and
across
the
North
AtlanPc
 fundamentally”
 remain
sluggish
Quote:
Secretary
General
of
the
AssociaHon
of
European
Airlines
  AEA
forecast
for
air
travel
to
grow
7.1%
  Load
factors
have
reached
record
levels
 as
capacity
returns
to
the
market

  Overall
esPmate
is
a
2.8%
return
on
 capital
this
year
 Source: IATA/AEA
    • The
Old/Tradi0onal
Ways
of
Doing
Business
Are
Over
   The
stale
and
unsustainable
noPons
of
the
 value
chain
are
over
 ‘OLD
NORMAL’
will
be
replaced
by





















 ‘NEW
NORMAL’


    • Does
the
‘new
normal’
look
like
this?

    • Or
This?

    • Or
This?

    • The
Old/Tradi0onal
Ways
of
Doing
Business
Are
Over
   The
stale
and
unsustainable
noPons
of
the
 value
chain
are
over
 ‘OLD
NORMAL’
will
be
replaced
by





















 ‘NEW
NORMAL’
   The
‘new

Normal’,
by
necessity,
requires
a
 new
corporate
approach
‘PUT
THE
TRAVELLER
AT
THE
HEART
OF
 THE
TRAVEL
PROGRAMME’
 ‘CREATE
REAL
VALUE
FOR
YOUR
 COMPANY’

    • Is
Your
Glass
Half
Full
–
OR
–
Half
Empty??

    • The
New
Model……

‘Crea0ng
Value’
‘CUSTOMER
ORIENTATED’



V


‘COMPANY
INTEGRATED’
 ‘Focus
on
the
WHY
of
travel’
 then……
 ‘The
HOW
of
travel’

    • The
New
World
Order
is
‘Value
Based’

 UlPmate
goal:
Protect
and
Increase
Company
Value
 Move
from
price
vs.
quality
 Strive
to
create
absolute
value’
to
meet
wider
responsibiliHes
to

































 employees,
suppliers,
clients,
communiHes
&
the
environment
at
large.
 Product
 A
Balance
Between

 Contract
 
Policy
that
delivers
 A
programme
that
is
sustainable
&

responsible
 purely
cost
driven
with
pracPces
for
stakeholders
 no
regard
for
the
 and
employees
 travellers
or
customers
 Policy
that
drives
true
 Policy
is
inward
 shareholder
value
and
 looking
&
 maximises
the
efficiency
 completely
ignores
 Improved
 of
the
organisaPons
 the
needs
of
 
Business
 resources
 stakeholders
 Efficiency

    • How
is
the
Right
Balance
Achieved?

‐

Scorecard
Copyright: IG Management
    • Tightly
Manage
the
Finances
–
Measure
your
performance


 Copyright: IG Management Score = 60% Savings: 9%+ Value: Shareholder Value, Employee satisfaction,
    • Manage
Traveller
Compliance
to
Policy
 Copyright: IG Management Score = 30% Savings: 8%+ Value: Efficiency, Control Process Management etc.
    • Ensure
Business
Efficient
Travel
Policy

 Copyright: IG Management Score = 50% Savings: 15% Value: Efficient use of resources
    • Implement
Sustainable
&
Responsible
Prac0ces
 Copyright: IG Management Score = 20% Savings: 9% Value: Risk Management, Well Being, Repatriation etc….
    • How
Do
You
Rank?





Example
Score:
Average
=
40%.......
 € + in gs: Score:
60%
 Sav er are hold e : Sh d n Valu Score:
20%
 an isfactio t e e sa Em ploy Score:
30%
 Score:
50%
Copyright: IG Management
    • How
is
Value
Delivered?
Copyright: IG Management
    • The
Key
to
Delivery
is
Control
and
Influence
CONTROL
AND
INFLUENCE
=

HIGHER
COMPLIANCE
&
LOWER
COSTS
   Control
   Enforce
policies
through

   Enforceable
policy
   Process
/
data
management
&
reporPng
   Influence
   Top
down
leadership
   Influence
behaviour




















































 by
educaPon
&
communicaPon
   Twin
approach
enables:
   Improved
compliance
to
policy
   Engage
employees
to
‘want’
to
support
the
 company’s
approach
to
a
new
Business
Efficient
 and
Responsible
travel
programme

    • Conclusion:
The
Old
Ways
of
Doing
Business
Are
Over
 ‘OLD
NORMAL’
will
be
replaced
by





















 ‘NEW
NORMAL’

 ‘Focus
on
the
WHY
of
travel’
























 then……



‘The
HOW
of
travel’
‘Put
the
TRAVELLER
AT
THE
HEART




of
 the
travel
programme’
 ‘CUSTOMER
ORIENTATED’

V






















 ‘COMPANY
INTEGRATED’
 ‘Achieve
a
balance
between




















 PRODUCT
&
CONTRACT’
 ‘Create
REAL
Company
VALUE’

    • Summary
–
Review
of
Todays
Goals
   To
discuss
the
changing
world
of
 business
travel
   Focus
on
Europe
   Look
at
life
from
a
pracPcal
 perspecPve
   Challenge
leadership
   Challenge
yourself
   +
3
personal
objecPves……..

    • Summary
 Thank
you
for
listening
 Thought
Exchange
 IG
Management
 _________________________________________________________________________________ Advisers for Responsible Business Travel
    • THANK
YOU…