Wings Travel Management has welcomed the recent rise in oil prices as a positive boost for its clients in the energy sector, but does not expect to immediately see any significant increase in oil and gas related travel above 2016 levels.
The specialist travel provider also forecasts that the price of oil will remain static for the first six months of 2017, but that the price per barrel will improve in the second half which should stimulate growth.
“We are cautiously optimistic about the size and scope of our energy clients business in 2017, but we may not see the effects of oil price rises until the back end of 2017,” said Paul East, chief operating officer, UK/Europe & Americas, Wings Travel Management.
“The world is a fragile place and potential conflicts flare up quickly. Depending on where these conflicts occur will affect the price of oil. Uncertainty in the US and European political space in the first half of 2017 could also impact on growth in the energy sector. However we are beginning to see initial signs that energy clients are getting back into exploration, which is encouraging.
“Ideally we would like to see the price of oil return to $60-$70 a barrel,” continues East. “Around 60 per cent of our clients are in the energy sector, and it’s been a very tough time for them since oil prices fell so dramatically in 2014/15. Many clients were forced to reduce costs across-the-board, including travel. But our determination to support clients through this process enabled us to identify, communicate and implement vital savings for them without comprising on traveller safety.”
2016 has been a landmark year for Wings Travel Management as the company made two major acquisitions, Travelnet Stavanger in Norway and Grosvenor Travel the UK. “These acquisitions have strengthened our presence in these two key markets. Particularly in the UK, it means that we also now have a larger corporate client base, not just oil and gas,” added Paul East. “Integration of both these companies under the Wings brand will be complete by the second quarter of 2017.
According to Paul East, other trends for the business travel sector in 2017 are as follows:
- Traveller security will remain a key focus especially as random, indiscriminate attacks seem to have become the latest terrorism tactic.
- Cost control will remain a priority for corporates – whilst some companies are experiencing growth, business confidence could fade quickly given the general air of economic and trade uncertainty concerning Brexit, US political changes, and other global factors
- As corporates continue exploring new markets, we expect more clients to start asking us for advice and support in arranging visas for travel to India and China.’
- Wings does not expect to see any decrease in airfares; the offshore fares that the TMC provides for energy sector clients are extremely cost effective. But for those markets where the destination serves both business and leisure traffic, availability may be more difficult in 2017; or if an airline is scaling back frequency to some key oil cities, this may affect flight availability.
- In terms of hotels, Wings expects to be able to improve deals for clients in certain destinations via the TMC’s offices in Rio, Houston, Aberdeen and Stavanger where there will be a wider choice of availability.