No leisure for Swedish business travel agents
While sales of leisure travels are on the rise again the situation for Swedish business travel agents is still grim.
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Swedish travel agents have been hit hard by the global downturn as companies and households hold tighter to their wallets and skip the extravagance. During the third quarter sales tumbled almost one fifth, according to new statistics by Association of Swedish Travel Agents.
Although the decline in demand for leisure travels seems to have bottomed out the business travel sector is still deeply troubled.
“Companies are cutting costs and taking steps back while many smaller companies have turned to other ways of booking, “ the association’s General Director Tomas G Olsson told The Swedish Wire. “It doesn’t look good”.
Hotel bookings plunged almost 30 percent compared to a year ago while conferences and company group travels fell 22 percent. International and domestic flights were down a fifth. In total Swedish travel agents lost 18 percent of its sales during the quarter, which more or less was in line with the previous two quarters of the year.
Even more disturbingly, the fall would probably have been deeper if Sweden didn’t hold the EU presidency, Tomas G Olsson pointed out.
Ticket Travel Group, Sweden’s largest retail company of leisure and business travel products, said Tuesday that sale in its business travel branch fell 5 percent in the third quarter while private travels rose 4 percent. The company increased its third-quarter net loss to 21.3 million kronor ($3 million) from 7 million a year ago.“We are facing the challenge to make business travels profitable”, said Dag Tveterås, chief executive officer at Ticket. “In this clearly damp economic environment more and more companies are forced to review its costs which can lead to travel restitutions".
However, the economic downturn is not entirely to blame. Also structural changes are threatening the industry as more and more companies strive to skip costly agent fees and instead turn directly to the airlines, hotels and conferees establishments to make reservations.
At the same time there’s a rapid shift toward online bookings. Travelpartner, Sweden's first online travel agency, swelled its third-quarter net profit to 4.2 million kronor, from 757.000 kronor a year ago, while sales rose 88 percent with a 20 percent operating margin.
Still, Dag Tveterås has a positive long-term view of the development of the business travel sector.
“In a forward-looking perspective it’s Tickets belief that globalization will make us travel more to maintain business contacts”, he said, adding that more and more companies realizes the importance of reliable consulting and guidance by a travel agent in order to slash costs.
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Last Updated (Tuesday, 27 October 2009 10:15)
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