About a fifth of business travelers operate under mandated travel programs, which require them to use the airlines, hotels and car rental companies their employer has chosen, according to the Global Business Travel Association Foundation's Global Business Traveler Study 2012, sponsored by Concur.
Roughly a third work for a company that has no preferred travel vendors, the study found. The rest, almost half of business travelers, fall in between - their employer encourages them to use specific airlines, hotels and car rental companies, but does not mandate it.
But beyond trying to keep more direct control over travel costs, companies are turning to other methods to hold down their travel bills, including use of videoconferencing equipment, offering less expensive hotels within the same brand and staggering the number of employees sent to a meeting. Even per diems, which had disappeared almost a decade ago, have come back, said Bjorn Hanson, divisional dean of the Tisch Center for Hospitality, Tourism and Sports Management at New York University.
Travel prices peaked in 2007, then fell the next two years. They began to rise again in 2010, Hanson said, and are expected to continue to increase this year by 4 to 6 percent, depending on the sector and the region.
But even with higher costs, business travel has come back. "The market actually recovered from what it lost in 2009 by the end of 2011, almost," said Lorraine Sileo, vice president of research for the travel market research firm PhoCusWright. The total corporate travel market in the United States - defined as corporate travel revenue from airlines, car rentals and hotels - grew to $90.7 billion in 2011, up from $72.4 billion in 2009, though still not back to the $98.3 billion of 2008, according to PhoCusWright. Revenue is expected to grow 6 percent this year to about $96 billion, and another 4 percent next year.
"Cost-cutting," Sileo said, "continues to be center stage for corporations."
To keep a closer eye on spending, some companies have created individual profiles in their online booking systems. "If you try to do something outside of policy, the system will kick off a message to your manager," said Christa Degnan Manning, director of research for American Express Global Business Travel. Or your profile may not allow you to book a business-class airline seat.
Many companies negotiate discounted rates for airline tickets, hotel rooms and rental cars through a corporate travel agency or directly with travel companies by promising them a certain market share. If too many airfares, hotel rooms or rental cars are booked outside these preferred suppliers, the suppliers may be reluctant to negotiateA as low a rate in the future, said Jay Ellenby, president and chief executive of Safe Harbors Business Travel Group, Bel Air, Md.
Negotiated room rates, for example, can include amenities like breakfast and Internet access, so when comparing them to the rates marketed directly to consumers, "it's important to distinguish rate versus value," said John R. Hach, senior vice president for global product management at TravelClick, an e-commerce service provider in New York.
Financial advisers: the Good, the Bad, the Ugly - Marketwatch
By Steve Beck
Online portfolio management company, Betterment, stirred up quite a controversy this month brashly challenging both the efficacy and ethicality of the investment advisory business in its blog post, "Financial Advisers Are Bad For Your Wealth".
Possibly, it was their stinging criticism of the industry or their use of an image of a pig with a human face that set off the raucous debate.
Whatever the reason, their opinions didn't go unnoticed as wealth managers across the country responded with ire. Wealth manager Josh Brown from New York City characterized the dust-up as a, "brawl between Betterment and the entire online financial advisory population" and financial planner Roger Wohlner called their comments " immature and stupid ," to name a few.
Behind the controversy was a study performed by the National Bureau of Economic Research (NBER). Researchers sought to determine if advisers would act in the best interest of potential clients, correcting risky and inappropriate investment behavior when contacted for help. Actors posing as vulnerable clients performed nearly 800 visits. The study resulted in the discovery that advisers often reinforced harmful investment behavior and provided advice that benefited their personal compensation in lieu of their clients well-being.
For example, when actors asked about fees, advisers played down their importance. Despite the damaging effect of fees on portfolio growth, the study revealed that adviser said things like, "this fund has a 2% fee but that is not much above the industry average."
Actors, who claimed they were in low-cost index funds, were frequently guided into more expensive, actively-managed mutual funds despite the ineffectiveness.
In addition to financial advisers, brokers too were biased toward methodologies that increased their personal earnings, such as encouraging the actors to concentrate in hot industries which require more buying and selling despite the high-risk, and taxes and fees resulting from such churn.
In light of these findings, what then is the role of an investment adviser if any? At MarketRiders, we often help investors fire their high-price adviser in favor of low-cost, global asset allocation using ETFs guided by an objective and proven software service.
This do-it-yourself approach, however, isn't for everyone. Many investors lack the fortitude and stability to faithfully execute a strategy through the tumultuous machinations of the market. For those investors, a good investment adviser makes tremendous sense, but how do you know if your adviser is a good one?
The Good
The first, ultimate and irreplaceable principle that guides good advisory services is fiduciary responsibility. Not only is this the law, good advisers place the interest of their clients above their own simply because they know it is the right thing to do, even if it means passing on substantial and tempting fees.
In addition, good advisers work intimately with their clients to develop a thorough investment plan favoring low-cost indexing, tax efficiency and global diversification when possible.
Finally, good advisers help their clients stay the course, helping clients manage the psychological roller coaster ever-present when markets swing wildly during economic tumult.
The Bad
Bad RIAs and financial planners are those that fail to use low-cost and tax-efficient indexing as the foundation of their portfolio management. Some of these bad advisers are sincere and good people who are simply uninformed and trained by an industry entrenched in an active management ethos.
Their sincerity, however, is no ethical cover for ignorance. Research has conclusively demonstrated the failure of active money management with irritating redundancy. When it comes to an adviser's resistance to accepting these plain facts, it behooves us to remember what Upton Sinclair said: "It is difficult to get a man to understand something when his salary depends on his not understanding it." If your adviser fails to acknowledge the value of indexing, he may not be as good as you think.
The Ugly
The NBER study sadly revealed that some advisers are actually quite ugly and deserving of the ignominious pig image employed in the controversial article. These debauched advisers place their own interests ahead of their clients, transgressing both law and conscience. T
his offense happens when advisers recommend high-price and actively managed mutual funds, products with high fees, and strategies with high risk and taxes all for the sake of their own pocketbook. When you see such recommendations in play, you can be sure the oinking isn't far behind. Leave these ugly ones to themselves before your portfolio has an ugly result. Find a good adviser or use one of the many quality online indexing services now available for surprisingly low-cost.
Business leaders celebrate county success - This is Gloucestershire
More than 70 business leaders attended a reception last night for the launch of the 2012 Top 100 Businesses in Gloucestershire supplement which will be published in The Citizen and Gloucestershire Echo on June 26.
The event was held at the Cheltenham campus of Gloucestershire College and the supplement is being sponsored by BPE solicitors, Endsleigh Insurance and Hazlewoods accountants who were all represented.
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Speakers and sponsors at the Top 100 Businesses networking event
Ian Mean, Editor in Chief of Gloucestershire Media, publisher of The Citizen and Gloucestershire Echo said the Top 100 supplement was first launched seven years ago and had now become “a bible and barometer of business success in Gloucestershire.”
And he announced some exciting developments in Gloucestershire Media’s business coverage. The launch of a new southwestbusiness website dedicated to Gloucestershire, Bristol and Bath and a new glossy monthly business magazine for the county called Agenda.
Through the website the latest business updates will be emailed out daily to the county’s opinion formers.
“It is quite a big development and there is a lot of interest from our business partners,” said Ian Mean. “The new Agenda magazine is going to humanise business in Gloucestershire.”
He thanked the county’s businesses for supporting Gloucestershire Media’s business publications - both editorially and commercially.
“Kevan Blackadder, Editor of the Gloucestershire Echo, and I believe business is a very good story,” Ian told the business leaders. “But without your partnership we don’t have anything.”
Chris Pitt, marketing manager of Gloucester-based Ecclesiastical, which took the number four spot in last year’s Top 100, said the insurance group was celebrating its 125 anniversary but looking to the future.
As a protector of some of the nation’s most important historic buildings, Ecclesiastical was the real expert in the field and would stick to its principles confident this was the way forward.
He said The Top 100 was a great way to celebrate the thriving businesses in Gloucestershire.
Chris Pockett, head of communications at engineering group Renishaw, said whilst it was good to see new businesses breaking through there was “a certain reassurance” to see the same company names appearing in the Top 100 list year after year.
Renishaw was in a strong position, performing well and seeking 100 skilled people to help ensure the group’s future success. It is also planning to expand its county sites by 280,000 square feet
The group will donate £90,000 to community organisations this year within a 50 mile radius of its Wotton-under-Edge HQ
“Whilst a list that highlights business achievement can be an excellent barometer of the wealth of Gloucestershire , in many ways it can also be a useful guide to the health of Gloucestershire,” said Chris Pockett.
And John Workman, senior partner at BPE solicitors, said: “Business is what makes Gloucestershire. We have a relationship with the business community that is time honoured and this is our heartland.”
He added that despite the recession businesses had learnt to “live with the new reality” and get on with it.
Ruth Dooley, partner at Hazlewoods accountants and business advisers, said it was good to talk up the county’s good business stories and celebrate success.
It was also good to see the private sector become involved with the public sector through initiatives like the Local Enterprise Partnership and have a voice to Government.
“There is a real will to promote business in Gloucestershire,” said Ruth. “We are delighted to be one of Gloucestershire’s growing businesses.
“We are delighted to be supporting the Top 100 supplement.”
My Business: Indian youth brand Happily Unmarried - BBC News
Rahul Anand and Rajat Tuli on how they created a youth brand for India
What makes an entrepreneur? The BBC's Saima Iqbal and Tom Santorelli speak to Rahul Anand and Rajat Tuli, about turning an idea about making products tailored specifically for young, upwardly-mobile Indians into a thriving business.
Business partners Rahul Anand and Rajat Tuli first met while pursuing their Masters degrees.
In 2003 the software company they had joined together went bankrupt and they decided it was time to take the plunge and start their own enterprise.
They had the notion that there was a niche in the market for a brand which catered for India's youth - a demographic which they thought up to then was being underserved.
At the time a large number of foreign companies were setting up their outsourcing arms in India.
Rahul and Rajat realised that this would mean there would be more young employees with disposable income, but there was no brand completely dedicated to India's youth.
"The youngsters these days are independent, they have opinions and they like to make a statement with the T-shirts they are wearing or the glass they are sipping their drink from" says Rajat.
The idea for their business hit them while they were both out jogging. They were so excited by the brand name they immediately ran to a cyber cafe and registered it.
My Business
What does it take to build your own business from scratch?
How does a US expat navigate Russian bureaucracy? Or illiterate Moroccan women learn to sell their own wares? Or a Brazilian designer win over Western celebrities?
BBC World Service reporters speak to entrepreneurs around the world about their inspiration, struggles and successes.
Happily Unmarried would be a fun brand which made a vast range of products from household items to clothes and beyond which catered for young Indians. The sort of well-designed yet functional items a young single - or taken - person might like to be seen with.
Seed capital
But their former employers had not paid them for the last six months and they had no capital to get their venture off the ground.
Pawning a laptop given to them by their old company raised 25,000 rupees ($450) - which was not even enough for them to hire office space. "So we said let's give the impression that we're a really cool company! So we got nice visiting cards made, very fancy posters made and put them everywhere. And then we got a website...we were operating out of cyber cafes, out of buses, out of other peoples' offices, and that's how we managed in the first couple of years" says Rajat.
Their efforts at raising their brand awareness paid off. Starting out with a small kiosk inside a mall in Delhi, they now sell in 25 stores across 80 cities in India. "We also have stores in smaller towns in India and the sales are encouraging, it shows that Indian youth in smaller cities also like to spend and they are opening up to products that are in your face and make a statement" says Rahul.
Design ethos
The partners employ four designers to come up with new product concepts: "The basic surmise is very simple. It has to make you smile", says Rahul. Their products are colourful, funny and are often emblazoned with somewhat irreverent text which makes them a hit with the younger generation.
But their goods are also designed while keeping the utility factor in mind, says Rajat. "We have designed some innovative laundry bags, toothpick holders, key holders for walls, door-mats and tea-cups that are not just great design ideas but we need them in our lives too".
They are open to new ideas and one need not be a professional designer to design for them according to Rahul: "People from all walks of life write to us sharing their ideas and if we like the idea and decide to turn it into a product then they get royalties and credit".
E-commerce is also one of the fastest growing platforms for their products and the past year alone has seen the highest online sales of their products. "People have better access to the internet and they are opening up to the idea of shopping on the internet" says Rajat.
Youth connections
They have been able to leverage the ubiquity of social media sites to increase sales and create a sense of community in their customer base. "It just reaffirms your faith....it's a feel-good factor!" says Rajat, checking the number of friends Happily Unmarried has on Facebook - 63,00 and counting.
One of the aspects of the business the partners enjoy the most is putting on one of India's biggest independent music festivals - called Music in the Hills - in different venues each year. It helps introduce people young and old to the Happily Unmarried brand. "It's a big party for two days and two nights" says Rajat. "It works as a huge promotion for us and we love doing it".
Operating out of an office in Delhi, most of their 200 or so products are made in smaller towns closer to Delhi like Saharanpur, Roorkee, Moradabad and Panipat which are the traditional industrial hubs of northern India. "These cities have seen huge losses due to a lot of manufacturing industries going to China, but the cost of production is low and fits our needs" says Rajat.
With an annual turnover of 5 crores (roughly $900,000; £570,714; 707,247 euros) Rajat feels the industry is taking them seriously now. "We're not just designing products we are also designing restaurants, organising events and giving them our touch by making it more fun".
Victoria 'financial education' firm has another (questionable) deal for you - The Vancouver Sun
In March, I wrote about a Victoria-area financial planning firm that has caused its clients a whole lot of financial grief.
Wealth by Design describes itself as a "financial services education and capital-raising company." It holds seminars and "boot camps" where it purportedly teaches attendees how to become "financially free within 10 years or less."
Not coincidentally, it offers an array of investment products that will purportedly help attendees achieve that goal.
At the time of my column, the firm's chief executive was Stephen McClure, who was supposedly so financially adept that he "became financially free at the age of 32."
I found this puzzling, as many of the investments he recommended were disasters.
One was Merendon Mining, which was part of an alleged Ponzi scheme perpetrated by Milowe Brost and Gary Sorenson, who are now facing criminal fraud charges in Calgary.
Another was a charitable donation tax-deduction scheme called the Canadian Humanitarian Trust, which was disallowed by Canada Revenue Agency.
Yet another was an investment in Ontario-based Borealis International Inc., which was shut down by the Ontario Securities Commission.
With a string of losers like this, I wondered how McClure could have achieved financial freedom at such a young age.
Alas, he confessed, it was all a mistake: he was not "financially free" after all. He had invested in the same deals and had suffered similar losses.
McClure recently told me he was "laid off" as the firm's CEO on April 20, the month after my column was published. One client told me McClure is now claiming to be on the verge of personal bankruptcy.
I wanted to ask Denise Andison - the founder, owner and chief operating officer of Wealth by Design - how her chief executive could sell so many bad investments and make such bogus claims about being "financially free" with no apparent repercussions until he was outed by The Vancouver Sun, but she never returned any of my calls.
Wealth by Design is now promoting another questionable investment offering. It's a Victoria-based company called One World Polymers Corp., which purportedly purchases and ships waste plastic to recycling plants in other countries.
Or at least that's the plan. It's not clear that One World is actually in business. The company was only incorporated in March, which suggests it is still in the development stage. I repeatedly requested a copy of the company's offering memorandum, which would presumably tell the tale, but neither Wealth by Design nor One World responded to my queries.
I am not surprised that neither firm responded. They are not operating at arm's-length. Andison, who runs Wealth by Design, also serves as chief operating officer of One World. Gary Lahnsteiner, who works as a "wealth coach" at Wealth by Design, also serves as chief marketing officer of One World. The two companies also share the same office in Victoria. They are also jointly promoting the investment. In March, they held a dog-and-pony show for about 100 prospective investors at the Grande Pacific Hotel in Victoria. Another investor meeting was held at the Victoria office on April 30.
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