OPINION Jani Kaskinen: Was 2009 really all that bad?

Hotelzon’s chief executive looks back on last year and says it wasn’t as awful as many reports have suggested.

It’s fair to say the business travel sector will not look back favourably on 2009, but rather view it as a terrible year. Contraction of business travel, reduction in face-to-face events, reports of hotel rates being slashed up to 40%, the emergence of the Tour Operators Scheme, ‘perception’ being added as a criterion of choice, the rise of the chief financial officer (CFO) in the decision making process, have inevitably led us all to look inwardly at our own business practices.    
 
But on reflection, has 2009 really been that bad for the business travel sector?

Something to prove
The growing influence of the CFO highlights that meetings and event spends are finally carrying the same weight that transient accommodation, ground and air travel have done for years on the corporate balance sheet.
 
What’s more, events are still taking place. However, measurement and return on investment have become inherent to the budget being signed off. And, in certain sectors, where product training is a legal requirement, revenues and volumes have remained largely unchanged and in some cases have increased.
 
At the end of the day, 2009 has meant that we have had to prove ourselves as a resource – an intrinsic element of business process outsourcing. We have also had to look at the changing landscape around us.
 
Wide of the mark
The emergence of the Tour Operators Margin Scheme means that many of us have divorced billback from our future product offering. We aren’t banks, so why would we willingly bank roll clients?     

Furthermore, reports of 30% or 40% discounts are on wholesale leisure offerings, not the corporate market. Using our online transparent statistics direct from hotel inventories, we have in fact seen a global reduction of 7% on the corporate rate.

Gearing up
Hotelzon’s corporate rate measurement only comes directly from live inventories and, therefore, proves a better indicator for fluctuations in market conditions, unlike stressed inventory leisure rates. Such examples include the change in Hotelzon’s average room night rate between 1 January and 30 November 2009 and the same period in 2008:
– London        -5%
– Paris            -6%
– New York     -5%
– Baden         +23%
– Heathrow    +62%
– Iowa City    +24%
 
So, in reflection, 2009 hasn’t been the bad as we may think. For Hotelzon, it has been a time to address the market conditions, gear up for the next decade, empower our clients with a seamless self-billing solution and, most importantly, celebrate that our clients see us as key to business process outsourcing.
 
Jani Kaskinen is chief executive of hotel booking company Hotelzon