Budget Blues?

We’ve all felt it – the pinch of rising prices, the escalated cost of living and the resultant belt tightening. But it’s not just the consumer sitting at home – the majority of corporates have for some time been looking to cut their costs, particularly in the wake of the 2008 global financial crisis. Travel is one of the first areas looked at, as Kate Kennedy discovered.

The corporate world may have re-looked its travel policies and video conferencing operators may be licking their lips, but a decreased travel budget doesn’t spell the end of the need to travel, particularly in the corporate world. We’ve all just had to become that much smarter and selective about the process, and travel policies have had to change to reflect a ‘new normal’.

That starts with the actual physical travel process, where budget airlines have clearly come into their own in the past decade.

“Low-cost carriers have taken the world by storm, accounting for more than a quarter of all airline bookings,” says Paul de Villiers, Vice-President of Amadeus Africa. “Twenty years ago corporate travellers would fly in business class on full-service carriers – no questions asked. They would be pampered during the flight with exceptional service, a glass of champagne, a delicious meal and ample legroom. It would have been inconceivable for them to consider paying extra for drinks, luggage or to pre-select their seats. The distinction between economy and business, between LCC and full-service carriers was clearcut and very visible. But, today the world has shifted, the lines have blurred and it is perfectly normal for a corporate traveller to fly on a low-cost carrier.”

Travel management companies are at the coal face of the corporate booking process and are well-placed to comment on trends. But Michelle Jolley, Corporate Marketing Manager of Flight Centre Travel Group in Johannesburg says it’s not as simple as just searching for the cheapest fare.