The rate of job losses at travel management companies could hit 60% in the coming days, Business Travel Association chief executive Clive Wratten has warned.
Wratten told Travel Weekly: “It’s a catastrophe. From talking to members, we think 60% of jobs will be lost by the end of October and it could get worse. That is jobs members are planning to axe or have already axed. It’s so distressing.”
He holds out little hope of an immediate restart of business travel and dismissed the impact of a reduction in quarantine through a ‘test and release’ regime, saying a release from quarantine after seven or eight days “will make very little difference” for business travel.
But he believes corporate traffic could rise sharply once it does resume, arguing: “It will be a slower start but a faster ramp-up.”
Wratten said: “It’s going to be well into 2021 before we see any real emergence of business travel. Business travel will be slower off the blocks, but the spike will be higher than the leisure travel spike. A significant part of business travel will start quickly.”
He added: “We need people back in their offices – then we can get travelling again.”
The BTA is consulting members and corporate clients on pricing models based on a white paper published in mid-October which laid out the strengths and weaknesses of the current structure of transaction, subscription and management fees.
The aim is to bring clarity to the process and develop standards for the different fee models.
Wratten said: “We planned to do this anyway, but Covid accelerated the process. The world has moved on but the model has not, and we have to start thinking beyond the here and now.”
He explained: “Transaction fees benefit the corporate and give the TMC cashflow. The downside is the corporate sees the fee and thinks ‘why am I paying?’ And during Covid, the TMC is doing the work and not getting paid.
“Subscription fees provide regular income. But is a subscription on behalf of the traveller or the company? Management fees suit large corporates, but don’t work for smaller companies.
“We hope to come out of this with standards for each model. The next stage will be consultation around the models and standards. Then we’ll widen the discussions to suppliers.”
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