New evidence suggests the UK business travel market is defying the economic slowdown.
Members of the Guild of Travel Management Companies (GTMC) report continuing growth in transactions after a record start to the year despite the downturn in the economy.
The GTMC reported a record first quarter with almost two million air transactions in the first three months of 2012 – the highest-ever number of quarterly transactions the GTMC has recorded.
The increase continued into April and May despite the recession in the UK and the crisis in the eurozone, although the latest figures do show growth tailing off.
The GTMC reported members’ air sales up 1.5% year on year in May and 3.7% for the year to date. In April, it reported air sales rose year on year by 11%.
Average transaction values at GTMC members so far this year are up 3.2% on the previous year.
The number of rail transactions also hit a record of 1.59 million in January-March this year – 65% above the level at the start of 2008 and 14% ahead of GTMC members’ previous best quarter for rail bookings at the start of last year.
Hotel transactions were also at a record level in the first quarter of more an 1.21 million, beating the previous high of 1.18 million in the first three months of 2011.
The figures are remarkable given the UK economy contracted in the six months to March, with GDP declining by 0.3% in the final quarter of 2011 and by the same amount in the first quarter of this year.
The growth cycles of corporate travel and GDP normally mirror one another, with a fall in GDP reflected almost immediately in the level of business travel. In keeping with this trend, GTMC transactions plunged in the last quarter of 2008 at the height of the financial crisis, with air transactions falling 27% year on year.
GTMC members typically see lower transaction figures through the second, third and fourth quarters of the year. But air transactions in April and May were ahead of last year, which was the best year since 2008.
The figures fly in the face of official government figures, supplied by the Office for National Statistics, which show a decline of about 30% in overseas business trips from the UK between the first quarter of 2008 and first quarter of this year.
The GTMC figures include domestic as well as outbound transactions. However, domestic corporate travel has been hit harder than outbound by cuts in the public sector.
The ONS and GTMC figures cannot be compared directly. However, the latter do suggest a greater proportion of corporate travel is handled by GTMC members than four years ago. This is due in part to consolidation among TMCs, the increased global spread of TMCs, and the growth in membership of the GTMC.
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