Govt travel cuts – TMCs need to adapt .

GOVERNMENT – the
travel sector’s biggest
corporate client – will
continue to reduce its travel
spend in 2016. This is a
reflection of the industry at
large, TMCs say.
President Jacob Zuma, in his
State of the Nation Address,
said that although excessive
and wasteful expenditure
had been reduced since
2013, there was still more
to be done. “Overseas trips
will be curtailed and those
requesting permission will
have to motivate strongly
and prove the benefit to
the country. The size of
delegations will be greatly
reduced and standardised.
Further restrictions on
conferences, catering,
entertainment and social
functions will be instituted,”
he said.
Shariefa Allie-Nieftagodien,
operations director of XL
Nexus Travel, says the travel
industry has seen a demand
from government for lowered
room cost, fewer bed nights
and smaller delegations.
“Cost containment is very
high on the travel agenda
and although this process,
in practice, was initially
challenging, it has become
the norm and TMCs have
adapted to the changed
requirements.”
Asata’s role in working with
National Treasury to develop
the travel procurement
framework was already as
a direct result of the state’s
review on travel expenditure
in 2014, says Asata ceo, Otto
de Vries. The framework has
now been adopted and will be
implemented in the next three
months.
Government cuts are a
reflection of how all corporate
clients are viewing their travel
spend in 2016, says Shariefa.
“The tightening of one belt
is not a big impact on the
entire industry,” she says,
adding that it should rather
be seen as travel industry
players adjusting to a new
order of doing business.
“We cannot do the same thing
we did five years ago and
expect to grow. The private
sector is a bigger worry as the
challenges are different but
very real.”
These challenges include
an increased demand for selfbooking
tools, a shift towards
Skype conferences, as well
as a trend whereby global
companies are moving their
travel spend abroad.