Bev Fearis checks in with Abby Penston, CEO of the Focus Travel Partnership, to see how the group and its partners are dealing with the Covid crisis
How has the pandemic impacted your TMC partners?
Despite lockdowns and border restrictions, Focus Travel Partnership partners reported a better 2020 than most. Through their dedication to duty of care, high service levels and their client base, which includes key workers and business travellers who simply cannot do their essential work over Zoom, we are also experiencing some green shoots for 2021.
SMEs make up 80% of jobs in the UK and over 99% of all private sector businesses, so our sector holds the key to economic recovery. That is not to whitewash the severe impact from the pandemic.
For our partners, January and February 2020 were strong with double digit growth year-on-year, whereas May and October were the most affected months last year.
Whilst a few Partners saw increased air revenue during 2020, overall air spend for Focus Travel Partnership partners was down 61% year-on-year.
In non-air business, 15% of the Focus TMC partners saw business shrink by less than 50% whilst the remaining 85% have seen more than 50% shrinkage, with a few seeing revenues down by 80%.
Right now, the majority of overseas journeys are more complex than ever, and clients are relying on their TMC to provide responsible and safe travel, agile technology to sharpen on-the-ground intelligence, and access to the best fares.
Client groups who have workers with essential travel needs include offshore and marine companies; construction and engineers alongside finance; entertainment; telecom; sport and in the summer, private leisure.
How are you and your members tackling the challenges?
One of the first activations Focus Travel Partnership initiated at the start of the pandemic was the ‘Helping You Get Home’ repatriation service for travellers urgently needing to return back to the UK as airlines cancelled routes and borders implemented restrictions. Partners’ insider knowledge of airlines and on-the-ground expertise was invaluable to many.
At the same time, as responsible managers and owners, we all took immediate remedial action to shore up our businesses. Focus Travel Partnership ramped up the pace and provision of information for partners to ensure they were all fully informed of all the government assistance available. We already had a fully functioning extranet, but we increased the levels of information on the rapidly-changing travel environment and promoted our forums for troubleshooting and sharing best practice.
We also increased the level of professional services we offered and partners have utilised the legal, HR and accountancy services we secured at the best possible rates.
We are also holding and running regular training sessions to ensure partners and their teams, whether on furlough or not, are up to date with current technical, political and professional changes.
Our biggest challenge now is encouraging the UK Government to work more closely with the trade to understand the value of a responsible TMC and how TMCs prioritise safe travel, which is why we are working closely with the Business Travel Association to ensure that the SME sector’s voice is being heard.
When do you expect to see a meaningful recovery in business travel?
Although it’s possibly a little too early to predict when we will see good recovery, Focus Travel Partnership Partners are already seeing some small shoots of recovery but much of this is for departures within 1-3 weeks of booking. Currently 54% of all bookings held for future travel in 2021 are due to travel this month (February 2021), with a further 10% in March and the remainder spread over the rest of the year, with a small spike mid-summer where pre-booked high-end leisure bookings are due to travel.
Many of the bookings for April and beyond are focussed on sporting events, groups and high-end private leisure which is identified by Dubai and Malé being the top two destinations booked from a revenue perspective. The ratio of offshore/marine business versus the remainder of business is swinging more towards non-offshore as destinations such as Tokyo, Islamabad, Istanbul, and Antigua slide into the top 10 destinations being booked.
From a travel management perspective, the key challenges remain with reduced opportunities to travel due to governmental influences, reduced budgets within the corporation as well as the ongoing concern of airlines not having refunded tickets from the earlier part of the pandemic. Putting these aside, limited capacity on key routes and fares still being restrictive (within the limited budgets available) will hamper some of the stems of recovery but we believe that once airlines see more demand, some of these will be resolved as a matter of course.
We will continue to monitor our performance using Focus data powered by Travelogix Farecast and we look forward to seeing the return of positive figures to both support our Partner’s businesses and that of our airline partners.
“All businesses will have to change and adapt as a result of this massive economic shock, but we will emerge stronger”
After the initial cancellations and rebookings, what are clients now looking for?
Clients are looking to their TMCs to navigate a safe path through a complex travel environment, which was one of the reasons why we launched PinPoint, a new duty of care technology system, in summer 2020. This provides TMCs and corporates with the capacity to know where their travelling teams were, are and where they are due to travel and to combine that with current risks so that travel arrangements can be managed, amended or cancelled according to government advice and risk levels. We have updated the system with Brexit requirements too, so information can be provided in real time as to whether clients’ travel means that they have to apply for visas and when they need to update passports and other documentation.
Where are your partners’ clients travelling to?
In terms of destinations, we still saw the U.S. claiming five of the top 10 city pairs in terms of revenue last year. The other key destinations across the full 12-month period included Dubai, Singapore, Johannesburg, Tokyo, and Cape Town.
However, recognising that long-haul tickets predominantly produce more revenue than short-haul, the picture is very different relating to the number of tickets issued where domestic UK (including the Channel Islands) secured five of the top 10 city pairs with Liverpool to the Isle of Man attaining top slot in number of tickets flown. Europe earns two places with Paris and Amsterdam, whilst Dubai, New York and Manila claiming the remaining three of the top 10 slots.
However, after the Channel Islands (including Isle of Man) closed their borders the London-Aberdeen route remains the top domestic position with Manila taking a large volume of tickets from both the UK and Europe. This proves that marine traffic has been critical to maintaining corporate business.
Throughout the pandemic, domestic UK traffic has still only accounted for 10% of the Focus Travel Partnership’s business. But add this to the 44% of business that was transacted across Europe throughout this period and we can see that short-haul has received a significant part of the Focus TMCs business. The remaining 46% of tickets were split across the rest of the world with 27% either going to or returning from Asia, highlighting that Asia’s recovery from the pandemic seems slightly more advanced than going West from the UK to the Americas.
What trends are you seeing in the class of travel being booked?
Prior to the pandemic, Focus’ ratio of revenue between Premium cabins (First, Business, Premium Economy) to Economy sat at around 53:47. Throughout the pandemic, this has moved slightly to a 44:56 split, which is supported by much of the marine and offshore traffic as well as short-haul business travelling in Economy, whilst much of the remaining business on long-haul routes continued to travel in premium cabins, allowing additional space, more facilities and often more flexibility.
What positives have you been able to take from the pandemic?
Confirmation of what I already knew: that our organisation has built a solid community based on respect and collaboration. The way as an industry we have come together to show support and genuine concern for one another is testament to the relationships we have built. We may not always agree with one another but in the face of adversity our initial reaction is to assist where we can. When we launched our ‘Helping you get Home’ initiative [to help stranded leisure passengers] the support we had from our network was amazing.
What’s on the agenda for Focus Travel Partnership longer term, once we’re through the crisis?
All businesses will have to change and adapt as a result of this massive economic shock, but we will emerge stronger. We will continue to do what we do best – build relationships and support our TMC and supplier partners. Our aim before the crisis was to strengthen and grow our brand by highlighting how the best TMCs in the SME market become stronger businesses by being part of a partnership that pools resources, negotiates excellent deals, provides state-of-the-art technology and shares best practice. We will come through this. The landscape may look different, but our determination to succeed as the leading business travel consortium will not.
Sustainability was a key issue pre-pandemic and it has risen even higher up the agenda, which is why we have begun a collaboration with Trees4Travel. This scheme, taken up by the Business Travel Association, aims to plant more forests. As travel managers ask TMC partners for detailed reports on carbon emissions, Trees4Travel can provide both carbon measurement for all travel, not just flights, as well as offset carbon through managed tree planting.
The pandemic and Brexit has made the travel landscape much more complex and complexity requires management – this provides opportunity for TMCs.
Technology will help us overcome these challenges by delivering information at the right place and the right time and by using data including AI and machine learning.
Tell us about other recent developments at Focus
Focus Travel Partnership aims to keep one step ahead of technology developments, so there are always technology updates and upgrades for partners that we have brokered. Most recently we have partnered with Element, specialists in cutting edge travel technology, advisory and support services to TMCs.
The agreement will provide Focus with access to Element’s full range of cutting edge technology, as well as their technical expertise and advice, to service the TMC partners currently within the consortium. Small to medium enterprises will benefit from Element’s state of the art tech including booking tools, expense management systems, automation services and more.
Travel policies will be more changeable in 2021 as corporates react to the ever-moving complexities of Covid-19 and Brexit. Traditionally, changes would come from the corporates’ travel manager and communicated via email or call to the TMC. The TMC would then filter that information down to their teams and systems and OBTs. This whole process could take days.
A new technology tool to speed up the process is emerging that will update all the systems in real-time, so that travel restrictions to countries, regions or cities are implemented immediately. Radar by Zenmer is one such system that Element in the UK is distributing.
Rail travel is a key business pillar for Focus Travel Partnership and reigniting rail travel will be key to reviving the UK economy, so we have just engaged in the strategic services of Black Box Partnerships to enhance the current rail programme for Focus’ TMCs and their customers.
We have also welcomed exciting new partners into the Focus Travel Partnership community including most recently Travel Trust, who are challenging current business models with their progressive outlook, which reflects our own.
Focus Travel Partnership is a group of 54 independent partner TMCs and each partner is a shareholder in the company. In 2019 it had a collective buying power of £1billion. Focus celebrated its first anniversary as a limited company in November 2020. The Focus Travel Partnership appointed Abby Penston as Chief Executive when the consortium secured its new status as an independent limited company in 2019. She has previously held prominent roles in senior management positions within the business travel industry as well as running a successful strategic management consultancy company.