Chancellor Gordon Brown recently announced an increase to air passenger duty (APD) that will come into effect on February 1 2007. For many companies, and particularly SMEs, the new duty could make a significant dent in their travel budget. And with environment groups putting ever more pressure on the government to encourage the travel industry to offset carbon emissions, the new tax may just be the first of many introductions that will incentivise companies to make their travel budgets work harder.
David Chapple is the event director for the Business Travel Show, which is the leading event for people who buy, book or manage company travel, trips and meetings. Commenting on the introduction of APD, he said: “Gordon Brown‘s increase will mean that tax on business-class seats will rise to £80 for each long-haul trip and £40 for a short-haul trip – that‘s double the cost now. Companies travelling short-haul or to Europe will be affected the most with tax costing more than the flight itself in some cases.”
Chapple is confident, however, that the rise in APD will not put business travellers off flying. He stated: “Face to face meetings with clients and suppliers are imperative and will never be replaced by email or telephone and video conferencing calls, but the price increase may persuade some to look to alternative means when arranging meetings. For larger companies the new tax may not affect them short-term but over time they may decide to invest in technology such as video conferencing, for example. For SMEs with smaller budgets this may not be a quick-fix option for them.“
The tax increase is one more reminder that SMEs need to be more savvy when planning their business trips to ensure they are receiving the best offers and their budgets are being used wisely. When it comes to balancing these costs, Chapple suggests there are a number of simple implementations that companies can apply to ensure their travel budgets work harder and smarter:
- Create a structured plan for booking company travel
Ensure that there is one person or team responsible for arranging and booking the company travel and meetings. This means it is easier to control, that preferred suppliers are always used and travellers stick to company policy. - Take advantage of a regular supplier
Many hotels, meeting venues, airlines and chauffeur companies are part of a loyalty scheme, so the more you use the same supplier, the better deals you can secure. You will also be the first to hear about special deals and offers. - Don‘t always assume the best-known Internet companies are the cheapest
Many companies make the mistake of assuming that the best-known Internet providers offer the best deals. For instance, there are many ways to get to your desired destination so it‘s always worth picking up the phone and speaking to a travel agent who will have access to all options – and not just view the pre-negotiated deals your usual website offers. - Educate yourself
Spend time researching your needs, learn from experts and evaluate what‘s best for your company. The Business Travel Show offers a comprehensive Educational Programme where you can learn about, and from, a wide range of case studies. There are many sessions and topics specific to SMEs, such as Your complete guide to booking, selecting & measuring meetings and managing spend and Cost effective travel booking and buying for small and mid-sized companies.
“The money generated from the increase will reach one billion pounds and hopefully this can be put to good use for the environment,” Chapple concluded. “My advice for companies for 2007 is to take steps to plan for these tax increases as soon as possible. Perhaps the Business Travel Show could be one port of call in 2007 for companies who want to explore their options, meet with new suppliers and learn from the best – it‘s the simple changes that can lead to the biggest rewards.”
David Chapple is the event director for the Business Travel Show. The show runs from 13 – 15 February 2007 at Earls Court 2: www.businesstravelshow.com [0]