Transportation, travel & leisure
Overview
The travel and leisure industry is generally hit hard by any economic slowdown.
When money is tight, travel is an obvious candidate for the corporate sector axe – especially in the era of broadband Internet access and high quality videoconferencing.
For consumers too, holidays and short breaks represent areas of significant discretionary spend that can be difficult to justify when you’re struggling to make ends meet.
So in the context of the worst financial crisis in a generation, it was perhaps not entirely surprising to find The Economist painting a gloomy landscape when it surveyed this industry in August 2011:
“Europe’s travel industry has had four terrible years: a recession, an Icelandic volcano, unrest in the Middle East, costly oil, a weak dollar and a widespread sense of malaise. People want to get away from it all, but worry that they can’t afford to. Airlines, hotels and cruise ships have all suffered, but the worst-hit are the tour operators. To survive, they have merged and cut costs. In 2007 Thomas Cook, a German-owned travel firm, took over MyTravel, a British rival, to create Europe’s second-biggest package-tour firm. A couple of months later Hanover-based TUI, Europe’s biggest travel company, merged its travel business with First Choice, another British package-holiday company, to create TUI Travel, a company based in London and listed on the London Stock Exchange. Both package-holiday giants cut capacity by as much as 25% in the following years1.”
When hotel rooms stand empty, planes and trains have fewer people to carry too – so the transportation sector has suffered the same bumpy ride that has jolted travel as a whole since the onset of the credit crisis in 2007-8.
In fact, the International Air Transport Association (IATA) reported that 2009 saw the biggest decline in air passenger traffic in the post-war era with passenger traffic down by 3.5% from the previous year and freight traffic nose diving by 10.1% as the downturn hit demand2.
It may not be easy to regain what has been lost, even when a semblance of growth returns.
If developed markets really face a 40% chance of prolonged economic stagnation3, businesses in all industries will need to accommodate themselves to a new world of modest gains. Gains that will be hard won and jealously guarded.
With large numbers of new customers conspicuous by their absence, organisations will optimise and retain value from the customers they already serve. In that scenario, business efficiency, customer focus and competitive differentiation become even more important for survival.
Working with Xchanging, leading hotels, airlines and airport organisations are already using outsourcing solutions to reduce their costs, improve their efficiency and give themselves a clearer focus on their single most important asset: their customers.
They will be well positioned to take advantage of future growth opportunities - and well-prepared should economic conditions deteriorate.
1 http://econ.st/n1VQqe
2 http://bbc.in/ojYGGP
3 http://natpo.st/pYqc34
To discover more about the ways in which we can help our customers, please click the links below:
We offer transportation, travel and leisure organisations the opportunity to remove complexity across a full range of business processes. By unburdening themselves of back office functions which support their operation but are essentially peripheral to their vision and mission, we give these customers time and efficiency to focus on what they do best. The result is more flexibility and greater efficiency in the face of formidable challenges. A leading provider of worldwide hotel and resorts destinations already trusts us to deliver HR Advisory services, process excellence and financial and accounting services. When required, we can also provide offshoring services which can deliver advantages including speed to market, back office transformation, on-demand business, improved customer service and cost optimisation.
We offer extensive technology capabilities across a variety of industry sectors. In this sector specifically, we manage IT network services, migrate a legacy platform and deliver end user computing services for a major international airport. We also design, build and run the software that supports a range of business processing solutions. We embed our intellectual property (IP) to create a solution faster and more cost-effectively than our customers can themselves. We can also provide customers with Total IT Outsourcing (ITO) solutions – a single point of supply for an end-to-end managed service.
Customers include: Gatwick Airport Limited, Singapore International Airlines
We are experts in supporting procurement professionals with services including sourcing, spend management, procure to pay (P2P), system management and software solutions. In this industry, we already provide customers with a procure to pay (P2P) service that helps to reduce procurement costs, control operational costs and ensure compliance with procurement policy.
Customers include: Hyatt hotels
