the future of corporate travel – today. a business model for a new world
DESCRIPTION
Keynote of Bernard Harrop at NICT 2010, Istanbul (Next in Corporate Travel)TRANSCRIPT
BernardHarropHeadofSustainability,ICARUSEurope,
InstituteofTravelandMeetings
‘NextinCorporateTravel2010’BernardHarrop
TheFutureofCorporateTravel–Today
Abusinessmodelforanewworld……
IGManagement_________________________________________________________________________________
Advisers for Responsible Business Travel
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Today'sGoals
Todiscussthechangingworldofbusinesstravel
FocusonEurope
LookatlifefromapracPcalperspecPve
Challengeleadership
Challengeyourself
Today'sObjec0ves
Sizedoesn’tmaSer!!
Sameprinciplesapply
Buyer‐Traveller‐ExecuPve
Differentscale
RightapplicaPon
WhereareWeToday?
Crisisisshort‐termevent–soonreturntonormal
EconomicrecessionNOTashorttermevent
…howwilltravellooka\er?
‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Economic/financialindicatorssuggestworldisre‐emerging
Future=repairoffinancialsystem&returntogrowth
Fundamentalindustryrestructuringnowrequired
Sources: D. Swords, NBTA ICARUS…
EconomistsModel:
EconomistsModel:Fix
Fix2008focusoncuDngcosts–damagelimita0on
EconomistsModel:Fix‐Stabilise
Stabilise2009/2010BoMomingout–re‐thinkthestrategy
Fix2008focusoncuDngcosts–damagelimita0on
EconomistsModel:Fix‐Stabilise
Stabilise2009/2010BoMomingout–re‐thinkthestrategy
Fix2008focusoncuDngcosts–damagelimita0on
EconomistsModel:Fix‐Stabilise‐Grow
Grow2010/11‐movetothe‘newnormal’
Stabilise2009/2010BoMomingout–re‐thinkthestrategy
Fix2008focusoncuDngcosts–damagelimita0on
EconomistsModel:Fix‐Stabilise‐Grow
Stabilise2009/2010BoMomingout–re‐thinkthestrategy
Fix2008focusoncuDngcosts–damagelimita0on
Grow2010/11‐movetothe‘newnormal’
RPKsfell4.5%
PAXfell5.8%,from346mtoc.326m
Cross‐bordertrafficinEUwas‐5.3%
NorthAtlanPc‐5.6%,FarEast‐5.9%
AEAAirlines–20mFewerPassengersin2009
MiddleEast&AfricawasposiPve
Loadfactors‐0.3pointsto76.0%
Capacitydecreasedby4.2%.
Source: IATA/AEA
Sharpreboundinbusinesstravel
Downturninpremiumtravelcyclicalandnotpermanent
Worldtradeisrising&businessconfidencehasregainedpre‐recessionlevels
Premiumtravelreboundingstronglyat+20%inQ1 Economytravelrecoveredtopre‐recessionlevels
DifficulttogetthepremiumyieldstogrowatsamerateasPAXnumbers
AEAAirlines–Trafficstar0ngtoreturn
Source: IATA/AEA
LargevariaPonsbymarket
Non‐Japan,Asia&‘emerging’eco+10%
Largedev.economies‐10%
Asian,SAmerican&MiddleEasternconPnuestronggrowth
EuropeandacrosstheNorthAtlanPcremainsluggish
AEAforecastforairtraveltogrow7.1%
Loadfactorshavereachedrecordlevelsascapacityreturnstothemarket
OverallesPmateisa2.8%returnoncapitalthisyear
IATA/AEAForecasts–LookPosi0ve
Source: IATA/AEA
“Oursectorhasjustcomethroughanastonishingyear…….”
“Thecrisishasnotreceded–itsrepercussionswillbefeltwellintothefuture….thefaceoftheindustrywillbechangedfundamentally”
Quote:SecretaryGeneraloftheAssociaHonofEuropeanAirlines
ThestaleandunsustainablenoPonsofthevaluechainareover
‘OLDNORMAL’willbereplacedby‘NEWNORMAL’
TheOld/Tradi0onalWaysofDoingBusinessAreOver
Doesthe‘newnormal’looklikethis?
OrThis?
OrThis?
ThestaleandunsustainablenoPonsofthevaluechainareover
‘OLDNORMAL’willbereplacedby‘NEWNORMAL’
The‘newNormal’,bynecessity,requiresanewcorporateapproach
‘PUTTHETRAVELLERATTHEHEARTOFTHETRAVELPROGRAMME’
‘CREATEREALVALUEFORYOURCOMPANY’
TheOld/Tradi0onalWaysofDoingBusinessAreOver
IsYourGlassHalfFull–OR–HalfEmpty??
TheNewModel……‘Crea0ngValue’
‘CUSTOMERORIENTATED’V‘COMPANYINTEGRATED’
‘FocusontheWHYoftravel’then……
‘TheHOWoftravel’
Product
Policythatdeliverssustainable&responsiblepracPcesforstakeholders
andemployees
Contract
Aprogrammethatispurelycostdrivenwith
noregardforthetravellersorcustomers
ImprovedBusinessEfficiency
Policyisinwardlooking&
completelyignorestheneedsofstakeholders
ABalanceBetween
PolicythatdrivestrueshareholdervalueandmaximisestheefficiencyoftheorganisaPon's
resources
UlPmategoal:ProtectandIncreaseCompanyValue
Movefrompricevs.qualityStrivetocreate'absolutevalue’tomeetwiderresponsibiliHesto
employees,suppliers,clients,communiHes&theenvironmentatlarge.
TheNewWorldOrderis‘ValueBased’
HowistheRightBalanceAchieved?‐Scorecard
Copyright: IG Management
TightlyManagetheFinances–Measureyourperformance
Score = 60%
Savings: 9%+ Value: Shareholder Value, Employee satisfaction,
Copyright: IG Management
ManageTravellerCompliancetoPolicy
Score = 30%
Savings: 8%+ Value: Efficiency, Control Process Management etc.
Copyright: IG Management
EnsureBusinessEfficientTravelPolicy
Score = 50%
Savings: 15% Value: Efficient use of resources
Copyright: IG Management
ImplementSustainable&ResponsiblePrac0ces
Score = 20%
Savings: 9% Value: Risk Management, Well Being, Repatriation etc….
Copyright: IG Management
HowDoYouRank?ExampleScore:Average=40%.......
Score:60%
Score:20%
Score:50%
Score:30%
Savings: € +
Value: Shareholder
and
Employee satisfaction
Copyright: IG Management
HowisValueDelivered?
Copyright: IG Management
CONTROLANDINFLUENCE=HIGHERCOMPLIANCE&LOWERCOSTS
Control Enforcepoliciesthrough
Enforceablepolicy Process/datamanagement&reporPng
Influence Topdownleadership Influencebehaviour
byeducaPon&communicaPon
Twinapproachenables: Improvedcompliancetopolicy Engageemployeesto‘want’tosupportthe
company’sapproachtoanewBusinessEfficientandResponsibletravelprogramme
TheKeytoDeliveryisControlandInfluence
‘OLDNORMAL’willbereplacedby‘NEWNORMAL’
‘FocusontheWHYoftravel’then……‘TheHOWoftravel’
‘PuttheTRAVELLERATTHEHEARTofthetravelprogramme’
‘CUSTOMERORIENTATED’V‘COMPANYINTEGRATED’
‘AchieveabalancebetweenPRODUCT&CONTRACT’
‘CreateREALCompanyVALUE’
Conclusion:TheOldWaysofDoingBusinessAreOver
Summary–ReviewofToday'sGoals
Todiscussthechangingworldofbusinesstravel
FocusonEurope
LookatlifefromapracPcalperspecPve
Challengeleadership
Challengeyourself
+3personalobjecPves……..
Summary
Thankyouforlistening
ThoughtExchange
IGManagement_________________________________________________________________________________
Advisers for Responsible Business Travel
THANKYOU…