Business Travel News - July 28, 2008 - (Page 54)

TRAVEL MANAGEMENT HRG Stake, Strong TMC Demand Boosts Dubai’s Dnata Senior vice president of Dubai-based Dnata Travel Services Iain Andrew this month spoke with Business Travel News travel management editor Seth Harris about the company’s recent investment in its partner Hogg Robinson Group and the growth of the United Arab Emirates business travel market. BTN: In June, Dnata purchased almost 20 percent of Hogg Robinson Group, becoming its largest single shareholder How does this change the relationship with your managing partner? Iain Andrew: Inevitably, it strengthens it. We’ve had a very strong relationship with them the last couple of years. We’ve been working closer, ensuring that we can lead in this market by adopting a host of travel solutions that perhaps some of our competitors can’t offer. We felt it was appropriate to strengthen that further by taking a long-term shareholding in the company. We have no other plans to invest further at this stage. We are keeping our options open, but it’s a longterm shareholding to ensure that we will work deeper with them. BTN: Dnata has been involved in the development of some HRG technology, including the HRG Universal Super Platform (BTNonline, Feb. 25). How are you working with HRG technology? Andrew: We’re working with them to a large degree and that will get deeper now, particularly on the back of our investment. We are looking at rolling out the HRG Universal Super Platform and their online tools. We’ve got a good partnership with KDS out here because it addresses some of the regional requirements we have. HRG has their own product suite, so we’ll be working with them aggressively to customize that suite for the region and make sure we are fully integrated with Hogg Robinson. BTN: Who were the chief decision makers behind the HRG buy? Andrew: My boss, Dnata president Gary Chapman, was fully involved, as was Sheikh Ahmed bin Saeed Al-Maktoum, Emirates Airline and Group chairman and CEO. BTN: How has Dubai being one of the fastestgrowing business travel markets affected Dnata’s business? Andrew: We’ve been unscathed so far and the growth remains phenomenal, with significant double-digit growth over the last two years. The demand for corporate travel is still exceptional for the region, particularly in the United Arab Emirates, where demand is growing on a daily basis. We’ve seen a lot of companies, like Halliburton, moving their head offices out here. In doing that, they are putting more staff on the ground who want to travel around the region. We’ve even seen significant growth in the charter business, from initial commitments. We’ll probably see a with people moving from business class to first few more airlines taper their growth a little bit. class and now into charters in order to get to There is no doubt that there are more hotel proptheir deal opportunities as fast as they possibly erties coming online. We are starting to see a litcan. For certain parts of the region, capacity is re- tle bit of flexibility in pricing, but we are going stricted, but companies don’t seem to be restrict- through the quiet season for hotel rates in the Middle East. Probably it will ed too much on their travel give corporate buyers on the policy, and they are able to use whatever means to get hotel side more of an opporto their meetings. If you are tunity. On the airline side, it will take longer. There still chasing some of the huge inseems to be strong demand vestments that are around at the moment, the travel budgfor the routes and the airlines et becomes a much smaller don’t need to be as aggressive on deals with the corporate consideration. decision makers. It will BTN: How do you see the current Western economy change. There is a lot of caand rising oil prices affecting pacity coming on with larger business travel demand in aircraft in this market. BTN: What is the preferred your region? primary basis for TMC conAndrew: I’m not going to tracts in the region? say that it’s not inevitable. IAIN ANDREW, SENIOR VICE PRESIDENT Andrew: That’s topical, beSome of the big travelers we OF DNATA TRAVEL SERVICES cause Emirates has declared have now are the big multithat they are going to a 0 pernational companies, and their headquarters—whether based in Europe or the cent commission on Oct. 1. That will probably United States—are going through a hard time. It take most of the UAE to 0 percent. A number of will inevitably rub over, if only from a political other markets in the region have gone to 0 perperspective, but there is plenty of business here. cent. Therefore, the rebate agreements are disIt’s perhaps the lifeline for some of those organ- appearing. They will still be here for most of this izations. I’m sure it will calm down a little, but at year, but next year they will have moved on, which means the management fee and transacthe moment we don’t see any signs of that. BTN: How do you see changes in capacity and tions fees will be the most prevalent. That will new hotels entering the market affecting corpo- cause some challenges for some of the less mature agents who will probably have to increase their rate negotiations? Andrew: Some carriers have pulled back a bit. service gains to compete with the global players Even Emirates has scaled back a couple of routes that can offer a far different range of services. ■ ONE-ON-ONE FCm Taps New North American President BY SETH HARRIS FCm Travel Solutions this month publicly announced the appointment as president of North America Gregory Lording, replacing Dan O’Brien, who left FCm following a short stint beginning in August 2007. Lording has been with FCm parent Flight Centre for more than eight years, most recently as global leader for FCm’s entertainment logistics company, Stage and Screen Travel Services. In the past year, FCm opened Business Travel News offices in Boston, Dallas and brands in the region. FCm recently launched a Phoenix and will open a “couple in Canada and probably two group travel business that Lordmore in the U.S.” this year, ac- ing plans to expand over the cording to Lording, currently next 12 months. Lording represents FCm on the based in Flight Access the Centre’s Vancou2008 Corporate Travel Index Garber/FCm Travel Solutions board, ver regional headsee btnonline.com/perdiem in which FCm has quarters. In North America, Australia- a 26 percent stake. Unlike based FCm remains focused on O’Brien, who forecasted a Garcompanies with about $2 mil- ber buyout (BTNonline, Aug. lion in annual air spending. 20, 2007), Lording said there are Lording also plans to build syn- no plans to increase FCm’s stake. ergies between FCm’s corporate ■ sharris@btnonline.com ■ 54 Monday, July 28, 2008 www.BTNonline.com http://btnonline.com/perdiem http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - July 28, 2008

Business Travel News - July 28, 2008
Contents
Inside Track
Profile
Newsmaker
BTN Research
Forum
Aviation
Lodging
Ground Transportation
Meetings Today
Travel Management
Expense/Payment
Destinations
Executive Dashboard
Washington Wire

Business Travel News - July 28, 2008