The big shadow floating over all of our heads these days, and obviously not just in the travel industry, is the looming recession which may or may not exist and may or may not already be in play. It's a lot of maybes, which has lead to significant conjecture within our industry as far as how this could-be-recession is going to affect business travel (or has it already?). As we know, whether or not the actual recession exists, the fact that the possibility is being bandied about means corporations are smartly getting ready to tighten their belts wherever possible. So, will business travel really take a hit this year?
In yesterday's
USA Today, an article appeared stating just that--in its headline. But digging deeper, the article speaks mostly to anecdotal accounts of companies tightening their travel budgets by putting stricter policies in place to curb excess. The thing is, at least from my perspective and looking at Ovation's client base, our clients have been putting stronger travel policies in place for as long as they've had those policies. Rarely does a company opt to lighten up on its spending in any area where it could be curbed. And travel does rank among the top controllable expenses in a corporate budget. Therefore, it only makes sense that many companies, would-be recession or no, would be looking to gain control over this piece of their corporate spend.
Now for the brass tacks:
Obviously, the impact of today's economic situation is a top priority for my company and we've been doing as much research as possible to gauge the impact to date, in order to gear ourselves for any potential decline in travel volume. So far I have been encouraged by what we've found and I thought I'd share some of these statistics here, perhaps to act as a small beacon of hope for our industry, or failing that, at least to see if Ovation's numbers are falling in line with the broader travel industry.
We looked at multiple legacy accounts (clients we've had for over four years) to gauge their travel trends over the past few years and to compare year-over-year trends for November 2007 through January 2008. What we found is that, yes some of our clients' transaction counts have declined quite minimally for the November-January months--specifically in the financial service industries--which is counter to previous years' trends which showed a steady increase in transaction counts. Still, the bulk of our clients saw an increase in transactions Nov-to-Jan with significant increases noted among our law firm clients and for sales-related business travel among non-law firm clients. Another interesting statistic is that even though financial service industry clients had a minimal decline in transaction counts for Nov-to-Jan, their overall travel spend for those months increased, as did their 2007 overall spend vs. 2006. This is in line with our legacy clients' overall travel spend in general, which has gone up, both year over year and for those months in particular.
Obviously it's too soon to tell how the could-be recession will ultimately affect the business travel sector. But I thought Ovation's findings were noteworthy for a few reasons, not the least of which is that our numbers seem to fly in the face of the generic assumption that business travel may be in the tank. We'll continue to look at these statistics as we move further into 2008. So for now, to be continued...