By Paul Wait, chief executive of the Guild of Travel Management Companies
I’ve just returned from Barcelona where we held the annual GTMC (Guild of Travel Management Companies) overseas conference entitled ‘Are we Ready?’
This year’s event was pretty unique for a travel conference, since only two of the speakers came from the travel industry.
Yet the message from everyone, whatever industry they represented, was clear: in order for the UK economy to grow we need to do business and we need to travel to do business – it’s called ‘business travel’.
Two presenters – neither from the travel sector and independent of one another – said nothing replaces face-to-face business. Video conferencing and Skype just aren’t good enough.
Since I arrived at the GTMC at the beginning of the year my mantra has been ‘Travel is an investment, not a cost’. I firmly believe business travel is a driver of economic growth.
Of course, when economic times are tough the influence of finance departments – and in the case of the government, the Treasury – grows.
Bluntly, the finance department is responsible for cost and the commercial department responsible for revenue.
Yet Oxford Economics estimates that every $1 spent on business travel results in $12 in revenue. The government department UK Trade and Investment (UKTI) calculates that every £1 spent on export effort leads to £25 in revenue.
The case seems clear that travelling on business delivers a return. So it should be regarded as an investment.
The responsibility for business travel should be moved out of the financial area of companies and into the commercial zone.
Travel programmes should be measured on how much revenue they produce in an affordable way.
Instead, we have policies of ‘travel avoidance’ hindering revenue growth and the UK’s export performance.
Another area limiting UK plc’s export performance is airport capacity, particularly in the southeast.
We surveyed more than 1,000 frequent travellers among senior management and found more than 80% rate increased air capacity ‘critical’ or ‘very important’.
Half (51%) favoured a third runway at Heathrow and 20% a second runway at Gatwick; 62% supported the introduction of mixed-mode flying at Heathrow and 52% supported night flights.
Asked the single most-important aspect of an overseas business journey, 92% said the distance from their home to the airport.
More than 80% said sustainability and carbon footprints did not affect the amount of business travel they undertook.
One in four reported they had flown via a European hub to reach a destination – evidence, indeed, that extra capacity is required.
Another survey, among leading corporate clients of our members, helped us add weight to our case, allowing the GTMC to publish ‘Ten routes to growth’ – a wish list of the top-ten routes corporations would like to see serviced direct from the UK.
We will continue to lobby MPs and ministers on this issue and will submit the business travellers’ views to the Davies Commission.
The rise in Air Passenger Duty has created an additional financial burden on companies trying to build trade and export overseas.
I’m concerned that the use of European hubs to fly to long-haul business destinations and emerging markets will increase as a result.
As far as I know the Government has heard no one offer a guarantee that reducing APD would increase the bank balance of UK plc. Yet if UK chief financial officers went on record saying they would invest any savings in APD on travel, there might be a chance to resolve the issue.
The GTMC conference posed a question: ‘are we ready’ to be positive, to challenge mindsets, to tackle the challenges, to invest in our businesses and people, and to get UK plc moving again?
Paul Wait is chief executive of the Guild of Travel Management Companies. GTMC members handle about 80% of UK business travel spend.