HSBC Holdings, the largest bank in Europe, has told its staff to reduce the amount of travel they do. The bank is also asking that they be more sensible when they shop for flights and accommodations. This comes as fears about another economic slowdown trigger a push to slow down spending.
Lee Whiteing, the travel and company-car manager for Europe, the Middle East and Africa, said that travel volumes at HSBC are nearly certain to decline over the next year. The economy is going to be tougher. They will continue looking to drive down how much they travel, while they are always searching for ways of doing things smarter and economising.
The International Air Transport Association (IATA) reported that, in August, there was a slowdown in growth for the premium air traffic sector from 7.5% the month before to 2.3%. At the same time, bookings are back to where they were late last year. The organisation also noted that there’s no evidence of a long-term shift toward business people choosing economy class.
Whiteing said that the bank can’t make cost reductions happen just by pressing the travel companies that have corporate accounts with them. He is sending their businesses a message that they aren’t prepared to provide the cost cuts that they are looking for just by beating up suppliers. This is about changing travel behaviours and taking less trips where possible.
The travel and company-car manager went on to note that HSBC staff who normally arrange meetings and then book accommodations and flights need to research the cost of travel beforehand. Then the trips need o be tailored to match cheaper times or combine more than one visit. People tend to call a customer, plan a visit and then book their travel. His message is that they need to at least look at how much the travel is going to cost before they make the meeting.
Meanwhile, HSBC is planning to reduce its workforce by 30,000 by the end of 2013, which is a cut of about 10%. This was announced at the first of August, with the bank saying it’s part of a strategy to prevent costs driven by increasing salaries. Although the company reported a 36% rise in profits for the first-half, it said that expenses are equal to 57.5% of sales, which is more than its target range of 48% to 52%.
HSBC isn’t the only company that is trying to cut back on expenses with the uncertainty of the economy in the coming months. Businesses across many industries are doing what they can to ensure that they stay afloat if there’s a double-dip recession, while there are still some collapsing from the effects of the first one.
