HRG Predicts Security to Outweigh Cost Savings in 2013

Travel News Asia Latest Travel News Podcasts Videos Wednesday, 19 December 2012

According to Hogg Robinson Group, security will be a top priority for clients in 2013 as clients focus on consolidating their travel programmes not only to create cost savings, but also to locate travellers quickly during crises.

"Security is the top issue in all new tenders, literally jumping from the back of the document to the front. In 2012 we saw more clients put security before cost concerns and we expect this trend to continue in 2013. Incidents like the Icelandic volcano eruption and Arab Spring were significant wake-up calls for corporates, who are now more focused on how on to keep track of their employees in the event of an emergency," said Stewart Harvey, Group Commercial Director at HRG. "Despite the current focus on security, cost savings will always be important to clients. We expect travel costs to increase in 2013, but unbundling will make price increases less transparent. The core ticket price may only rise by 1%, but individual ancillary fees, such as baggage fees and on-board food and services, are likely to rise by 6-8%."

HRG's Three Cs

In response to security concerns and rising costs, HRG expects clients to prioritise three tasks: consolidation, compliance and control. Harvey explains: "First and foremost, corporates want to bring everything together into one place. Clients want the ability to see all of their travel-related data - including spend and traveller location - at the touch of a button. They also want to fine-tune policies so that they better encourage cost-effective behaviour, and, finally, to keep travel spend down through employee compliance."

Mobile Technology

HRG predicts that more clients will take a control-led approach to managing technologies like mobile. "Mobile technology impacts the way we now work, behave and live. It is truly the new lifestyle norm. However, there isn't an industry-wide standard when it comes to booking travel on mobile phones. Next year the business community will look to source mobile products that are aligned with corporate travel policies in order to drive compliance and reduce overall spend," said Harvey.

Growth Geographies

Asia Pacific - primarily driven by China - and Latin America - primarily driven by Brazil - will continue to grow as destinations for business travel, but not as quickly as previous years.

However, Vietnam and Korea may be exceptions to this rule as they develop as corporate hot spots. Harvey said, "Emerging markets will continue to attract business travel, but it is Africa we need to watch. Although Africa is starting from a low base line, many of its markets, such as Nigeria, are poised to grow substantially over the next decade."

Overall, HRG is optimistic about the opportunities ahead. "As a TMC, we can control base costs but not traveller behaviour. Next year we plan on helping clients manage behaviour by demonstrating how issues such as advanced booking and off-peak tickets can make savings. As clients treading carefully, we have the chance to help them uncover, capture and control more aspects of their travel," added Harvey.

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