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Bill Horsley, general manager of Al-Futtaim Travel in Dubai, said his company has not seen any slowdown in day-to-day business from its corporate clients. 'No company has come through and said they are cutting back,' he said.
He attributes this to the fact that Dubai remains the corporate hub for the GCC and people still need to travel to the emirate to conduct business. However, he believes that the next few months will be a 'telling time'.
'I do believe in the first quarter of 2009 we will feel a difference. Whether it will be a major one I can't predict. But I think we will feel a difference. I think everyone is on a wait and see basis to see what the other guy is doing,' he said.
Horsley predicts that we will see many companies adopting 'essential travel only' policies, and instructing their employees to fly economy rather than business class. And although companies may continue to keep travelling throughout the Middle East, there are likely to be cut backs on corporate travel to Europe.
Slowdown looms
Jeff Strachan, Marriott International area director of sales and marketing Middle East & Africa, agrees that it is 'hard to put your finger' on the effect of the credit crisis on corporate travel at the moment.Company travel is in 'shut down mode' from now until the end of the year because people go on Christmas leave and it typically does not pick up again until around January 10, he noted.
Another factor clouding the corporate travel picture is that Eid moved into the first few weeks of December this year, making it difficult to make year-on-year comparisons.
However, Strachan acknowledges 'without a shadow of a doubt' that there has been a slowdown in corporate travel. 'What used to happen in Dubai is you could probably sit there till the last minute knowing pretty much that your hotel was going to fill up. That has slowed down,' he said.
One result of declining occupancy is that hotels may start to go after certain segments that they traditionally may not have targeted. 'For example, the general manager of a beach hotel that all of sudden has a hundred vacant rooms might decide that he wants to go after group business, which might previously had gone to hotels on Shaikh Zayed road.
'So now the hotels on Shaikh Zayed road might be forced to begin looking for group business from some other part of the city. So you get this domino effect,' he said.
Marriott does not have hotels on the beach in Dubai, so it has always targeted corporate travellers in the emirate. Strachan says Marriott will now face greater competition for corporate business from other hotels in Dubai which typically had not targeted that segment before.
'These hotels might not have been making sales calls on our customers because they had been getting leisure business from throughout the world, but now they are not and they might have to go after that again. We are seeing signs of that,' he said.
Microsoft cuts back
Companies generally are reluctant to discuss whether they are cutting back on travel.AME Info spoke with one official at Microsoft's regional headquarters in Dubai who said the company's travel policies have not been greatly affected by the financial crisis so far. The official, who asked not to be named, said part of the reason is that much of the company's travel for the remainder of the year is over because of the holidays.
However, he did say HR managers were asked at a recent meeting if there was any travel ban in place, and they said one of the company's four departments was told to 'go slow and really scrutinize on travel', especially business class travel.
The other three departments in the company were told that it was 'business as usual' in terms of corporate travel for the time being, he added.
See also:
Dubai hotels face hit as European travellers cut back
Premier Inn sees 'huge opportunity' in Gulf
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Jeff Florian, Senior Reporter
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