Last year, our assessment in this space was, "Dire circumstances have created an environment that demands change." We had no idea at that time of the extent of the changes that lay ahead.
The year 2008 started out as a good but challenging one for most travel suppliers, until the bottom fell out. It began with industry-wide concern about the impact of soaring fuel prices on business travel and buyers grappling with a long-term hotel seller's market. As the housing and financial services industries began to implode and recession set in, the astronomical fuel prices and the hotel seller's market both came crashing down.
While few companies are talking about expanding their travel spending, there has been no indication that companies are expecting to make further cuts at this time. This has left the industry trying to discern whether it is still just a time to hang onto the roller coaster or if we have truly hit bottom and can begin to work at climbing back up.
BTNonline subscribers may download each section of the 2009 Business Travel Survey, including all charts, supplier rankings and analysis, by
clicking here.
To subscribe to
BTNonline,
click here.
For a FREE look at the 2009 Business Travel Survey via the digital edition of
Business Travel News,
click here. To subscribe to the print or digital editions,
click here.
To read
BTN's analysis of each sector, click on the individual headline below.
Corporate-Owned Agencies: Agencies Face Transaction DropsAs the recession took hold in 2008, travel management companies found themselves on rocky footing, battling the effects of stark transaction and sales volume drops that accelerated throughout the year. Last year also saw agencies responding to vigorous account activity as corporations looked to optimize financial arrangements, speed TMC implementation times and receive more timely and accurate data and reporting.
Domestic Airlines: U.S. Airlines Swap Fuel Prices For Demand CrisisU.S. airlines ended 2008 in a much smaller and less profitable industry than the one that they entered, dropping about 9 percent of capacity, watching seven smaller airlines liquidate, shedding nearly 28,000 full-time jobs and approaching $20 billion in net losses.
International Airlines: IATA Sees Billions In Losses Last Year, This YearWhen International Air Transport Association director general and CEO Giovanni Bisignani gave a global airline industry forecast in April, the outlook was nothing but grim. "Air transport is in a crisis," he said, after which he detailed the litany of woes facing the business: billions of losses in 2008, battered premium traffic, freefalling revenues and an estimated $4.7 billion in losses this year.
Car Rental Companies: Car Rental Firms At Crossroads As Demand LagsDamaged not only by a global economic recession and sharply reduced demand but also by the crippling financial maladies of the Big Three U.S. automakers, the rental car industry finds itself at a crossroads in 2009. Competition for remaining business is fierce, and a decimated resale market is leaving the rental companies with lots of cars to rent, but fewer corporate travelers to rent them.
Chauffeured Transportation Companies: Chauffeured Cos. Face Perception, Demand CrisisChauffeured transportation companies began 2008 with just the initial whiffs of concern about a slowing economy and softening corporate demand. They ended the year in the worst crisis the industry has ever faced, watching financial services companies that proved some of their best corporate customers evaporate, seeing other clients all but consider their product radioactive and facing the prospect of hundreds of millions of revenue dollars disappearing.
Corporate Payment Systems: Payment Vendors Push Consolidation, GlobalizationPayment issuers and networks, faced with contracting volumes of travel and entertainment spending, are advocating global growth, better compliance and spending consolidation as a way to forestall expected volume declines this year.
Corporate Payment Systems: American Express Makes Strategic Card PlaysAmerican Express in 2008 made several strategic investments and partnerships that further bolstered its standing as the world's largest corporate card provider and expanded its distribution network by acquiring GE Money's Corporate Payment Services, purchasing an equity stake in Concur and launching a new partnership with Carlson Wagonlit Travel.
Hotel Companies: Buyers Gain Sway As Hotel Seller's Market HaltsAnalysts warned that the seller's market that had dominated the lodging industry for several years would ebb in 2008, but none predicted the sharp U-turn the industry took, leaving buyers in an unexpectedly strong negotiating position amid falling rates, revenues and occupancies.