Business travel boom indicates bouncing economy

By This Is Money
Updated: 06:06 EDT, 25 May 2011

A strong surge in business travellers reported by corporate travel specialist Hogg Robinson suggests a recovery in the wider economy and company confidence.

Positive: Increase in overall travel spend in the UK

The Basingstoke-based firm, which provides travel services to businesses worldwide, said client activity increased by 17% and spend by 23% in the year to March.

The group, whose customers include the UK Ministry of Defence and Foreign Office, said growth was driven by its Asia-Pacific market but noted an increase in overall travel spend in the UK.

Hogg, which also serves companies such as Volkswagen and Rolls-Royce, reported a 36% surge in pre-tax profits to £28.9 million in the period.

Hogg reported a 10% increase in revenues to £358m in the year, despite fuel duty rises, severe winter weather and natural disasters worldwide.

The company has previously said events such as last year's volcanic ash cloud actually generate more work for its business as it manages contingency plans to offset the disturbance to travel.

Chairman John Coombe said: 'The global economy is slowly recovering from the financial crisis of the last few years and HRG's services are increasingly in demand.'

The group said there had been a gradual recovery in all regions since 2009, though growth was strongest in Asia-Pacific and North America.

In Europe, underlying operating profits increased by £2.7m to £30.8m, as client travel spend increased by 18%.

The UK business saw an increase in spend as the loss of Government contracts was offset by increases in other sectors, Hogg said.

The board brought cheer to shareholders as it hiked the full-year dividend by 25% and said it expects the current momentum to continue.