Business travel proportionate to economic growth, Guild of Travel Management Companies

The Guild of Travel Management Companies (GTMC), a UK-based professional body for travel management companies, has published its second quarterly review for 2013, which it claims shows a direct correlation between the level of business travel undertaken and economic growth.

The review shows that exports to non-EU markets have increased in line with an increase in the uptake of business travel. Based on figures from April to June this year, GTMC analysed business travel transactions and revenue, and compared them with a range of economic indicators relating to the UK’s economy. These included changes in GDP, corporate profitability, the level of UK exports and the business confidence monitor.

38 GTMC members provide data for the survey, with the Guild claiming that 80 percent of business travel undertaken from the UK is attributable to its membership. Air, hotel and rail bookings were among the transactions that contributors to the study provided.

Paul Waite,GTMC’s chief executive, said: ‘GTMC members believe that business travel is not a cost to business but a necessary investment to drive economic growth and prosperity in the UK. Our latest Quarterly Review clearly shows the relationship between business travel and UK economic indicators.’

Based on the information that it gleaned, GTMC derived that:

– The change in business air activity continues to reflect changes in GDP after a six-month lag.

– The business travel handled by GTMC members and confidence move in tandem; both the business confidence monitor and the FTSE 100 mirror changes in the number of transactions handled by GTMC members.

– UK purchasing managers are showing increased optimism in 2013; at the same time, business air transactions show a four percent increase in the second quarter from the volume in Q2 2012.

– Business air transactions and corporate profitability move in the same direction and in the second quarter of 2013 both are on definite upward trajectories.

– There is a clear correlation between investment into the UK and business travel.

Figures indicate that European business travel is slowly improving

According to available figures, business travel is improving in Europe albeit slowly.

According to the data, there have been modest increases in business travel for 2013 into 2014 across most of Western Europe, especially in Germany and the UK. The increase in business travel in most European nations, if not all, suggests that the economies in these nations are recovering and doing better than in the crisis periods.

Catherine McGavock, regional director-Europe for the Global Business Travel Association, said, ‘This has been a very difficult period for Europe. We are talking about modest growth, not a recovery that surges off the charts. The key thing to remember is that this is a very modest improvement and given the precarious nature of the situation things can change very quickly. There are signs of recovery in Germany and the UK, with both expected to experience growth in business travel spending this year. We believe this is the beginning of a wider trend in the region and expect growth in business travel spending to accelerate in 2014 to the levels we saw before the Eurozone crisis.’

While projections show that business travel will increase in Germany and the UK this year, a decline is expected in travel for Spain and Italy. In 2014, all five top business travel markets in Europe; Germany, UK, France, Italy and Spain, are expected to show growth in travel spends. These five countries account for nearly 70 percent of the total European business travel spend, the GBTA said.

Figures also suggest that business travel spending for the five top nations in Europe could touch $184.8bn this year, up from $177.7bn in 2012.

Survey predicts 27 percent increase in UK business travel

UK business travel is set to see a 27 percent growth during 2013, according to the findings of a recent survey.

The study, carried out by US-based car rental company, Avis Rent a Car, as part of its annual Corporate Connections study, surveyed 2,500 European business personnel, and its data suggests that in the coming year the UK will outstrip the 20 percent business travel growth that it achieved in 2011-2012 by an additional 7 percent.

The survey also revealed that 50 percent of those questioned travel on behalf of their company or organisation at least once a month, while 15 percent do so weekly, and 7 percent are doing so on a daily basis. The major boom areas for business travel were confirmed as the developing nations in South America and Asia, travel markets that experienced 21 percent growth between 2011 and 2013.

Service was deemed more important than price where business travel is concerned, with business travellers setting financial issues aside as 20 percent of them prioritised quality, 17 percent prioritised speed, 14 percent on-line booking, 5 percent loyalty offers and 4 percent exclusive incentives.

UK respondents were also proven to be the most loyal to a trusted brand, with 88 percent saying that they would tend to use that brand again compared to an average of 76 percent across Europe.

Avis UK managing director, Kaye Ceille, commented, ‘Despite economic pressures, it’s reassuring that British businesses still value quality over cost. We recognise that for our business travellers, speed and customer service is a priority and as such we offer innovative products such as online check-in and Avis Preferred, the fastest and most convenient way to rent cars.’

 

Business travel rates set to outstrip budgets in 2013

A new report has indicated that increases in the costs associated with companies deploying staff on overseas business trips could outstrip prearranged budgets during 2013.

Budgets that are already likely to have been tightened could be made to burst at the seams if overseas trips are deemed imperative, according to predictions by the US-based Global Business Travel Association (GBTA.L). The Association’s prediction is that hotel rooms and airfares in most classes are set to increase in price by around 8 percent this year. It says that the average international economy ticket purchased in the USA will cost $1,217, while the same trip in business class will cost $5,152. A travel buyer’s world travel spend is likely to account for around 30 percent of their total travel budget.

While the rates for US domestic travel are expected to see more modest increases of 4.6 percent for air travel and 3.7 percent for hotel accommodation, even those predictions are well in excess of the 2.9 percent increase that buyers had been anticipating.

The GBTA puts the expected price increases down to a growing demand for air travel, accommodation and meeting space that will enable hotels and airlines to be less generous in discounting their prices.

Vice president of research for GBTA, Joseph Bates, was quoted by Reuters, saying, ‘Travel buyers are being pushed to balance higher costs, the need to get travellers on the road, and corporate budget constraints. Strategic travel management programs will play a key role for companies dealing with a tougher negotiating environment and focused on getting the most out of their travel spending.’

297 travel buyers in the US were questioned for the survey by the GBTA last October.

Private Sector Employees Likely to Inflate Travel Expenses

Concur, a company that provides on-demand employee spend management services, has reported that around 10 percent of British employees have cheated on their business related travel expenses.

A study of around 1,200 workers, conducted by UK based research company, You Gov, found that around 11 percent had inflated their expense claims in the last year. The study also says that around 28 percent of those working in large private sector organisations are likely to consider it acceptable to exaggerate expenses, compared to 13 percent with a similar ethos in the public sector.

The company’s UK managing director, David Vine, said, ‘In recent years, the public sector has faced significant publicised scrutiny over the accuracy of expense claims, resulting in a mandate for increased transparency.

As such, we’ve witnessed a reduction in those in the public sector who think exaggerating expenses is acceptable (14 per cent in 2011 compared to 13 per cent in 2012). In a tough economy with little spare cash, it’s imperative that attitudes within the private sector towards expenses quickly follows suit.

Our data suggests that over one in ten employees are exaggerating their expenses and the reliance on manual-based expense management processes exacerbates the problem, as it exposes businesses to unnecessary revenue leakage due to the lack of checks and balances in the system

Expense automation can reduce expense processing costs by up to 50 to 60 percent and can increase travel policy compliance by up to 30 to 50 percent.’

The most common excuses for business travellers cheating on travel expenses are, ‘to make up for the times when I forgot’, followed by, ‘money is tight’.

UK Business Travel Grows Despite Economic Slowdown

Business travel in the UK has grown in 2012, even while the country’s economy was registering a slowdown in the same period.

A report published by UK-based Guild of Travel Management Companies (GTMC) said, that the last quarter of 2012 showed a 4 percent overall increase of services offered by travel management companies, when compared to the same quarter in 2011. This infers that the travel industry has grown even when UK Gross Domestic Product (GDP) for the same quarter saw zero growth. For the full year 2012, members of the GTMC have recorded a 4 percent increase over the same period in 2011.

In the period from October to December 2012, hotel sales have increased by 2 percent when compared to the same quarter in the preceding year; rail recorded a 10 percent increase in the last quarter of 2012, and 9 percent increase year on year. Car hire has increased by 7 percent in the last quarter of 2012 and 9 percent year on year.

The association’s chief executive officer, Paul Wait, said, ‘The GTMC 2012 year end transaction figures are very heartening, business travel is still buoyant and deals are being done. Similar to the commentary coming out of the City regarding the strength and growth of share prices, suggesting growing business confidence, the GTMC survey proves that despite the economic performance to date air travel transactions have remained at a constant level.

I have maintained a position that business travel should be regarded as an investment and not a cost and that it is vital to a successful company performance. The Coalition Government in its mid-term review has stated that business growth is one of its key objectives and therefore it is essential that UK companies increase their investment in business travel to achieve this goal.’

Corporate Travel Looks Rosy for British Travellers in 2013

UK travel buyers are set to have a good year in 2013, as the travel industry is not expecting a decline in business.

AirPlus International Inc, a company that provides a suite of business travel payment solutions, has conducted a survey that reported that 64 percent of British travel buyers expect the number of trips to be the same as last year, while 28 percent believe that travel may increase. Only 7 percent of survey respondents are expecting a decline in travel.

Around 45 percent of UK buyers believe that spending on travel will remain flat in 2013, while 38 percent expect it to increase, and 15 percent are predicting a decrease in expenditure.

Most UK travel managers are also expecting an increase in their accommodation bill, much more than for flights. Around 44 percent of managers believe that the cost of travel accommodation will be increasing in 2013, compared to 40 percent who believed hotel room costs would stay constant. 41 percent of those surveyed believe that air travel costs will rise in 2013. Around 36 percent of travel managers believe that more rooms will be booked by British corporate travellers in 2013, while 52 percent thought that booking levels would stay the same.

Yael Klein, the managing director of Airplus UK, said, ‘I believe that a stable business travel market should definitely been seen in a positive light. Many other large European business travel markets, including France, Italy and Spain, predict spending to go down, albeit marginally.

As business travel spend seems to point quite consistently to the state of the national economy, we would hope this is therefore a good indication for the outlook of our economy over the next 12 months.’

Survey Indicates Business Travellers Keen to Explore

A recent survey has concluded that business travellers hope to have time to explore the local area when on a business trip.

Around 48 percent of business travellers like to explore the neighbourhood around their hotels while on business trips, while 47 percent wished that they had more time to explore.

The survey, conducted by the Hotel Indigo brand, also reported that around 21 percent of business travellers are willing to forego their business remuneration for extra time to explore the local region, while around 29 percent are willing to compromise on sleep to do so.

Mary Dogan Winslow, the director for Americas Brand Management for Hotel Indigo, said, ‘At Hotel Indigo, we want our guests to feel refreshed and inspired by the things they discover about our neighbourhoods. Guests booking the ‘It’s Not All Business’ package can start and end the day in an inspiring way, with one of our local favourites.

When the workday is done, business travellers often feel stuck in their hotel rooms, but we encourage them to discover something new. They don’t just check in to our hotels; they check in to the neighbourhood.’

The Hotel Indigo’s ‘It’s Not All Business’ package includes a complimentary breakfast and a signature drink to unwind at night. The hotel dining venues offer seasonal menu choices, including local coffee and beer.

The brand currently owns eight hotels in the UK, including properties in Birmingham, Edinburgh, Glasgow, Liverpool, Newcastle, and three properties in London.

There are around 11 Hotel Indigo in the pipeline in Europe, while worldwide there are 46 Hotel Indigo hotels already running, and 52 in the development pipeline.

The brand is claimed to be popular in Europe as it offers a flexible approach for developers to redesign an existing or acquired hotel as a Hotel Indigo property, with less of an investment requirement and a quicker return to operation. For guests, the brand offers signature services as well as the attributes of a boutique hotel.

Corporate Travellers Become More Compliant with Travel Policies

AirPlus International Inc, a US-based company that provides a suite of business travel payment solutions, has reported that corporate travellers are becoming more and more compliant with companies’ travel policies.

The company has surveyed around 300 travel buyers and found that 15 percent expect compliance rates to be less than current levels in the next two years, and 48 percent of corporate buyers are expecting improved compliance from their travellers.

A recent report by the company said, ‘In spite of much discussion about pressure from travellers to book trips independently, buyers say employees are becoming more compliant, not less.

No fewer than 53 percent have experienced greater compliance over the past two years, while only 8 percent have seen compliance diminish.’

Around 60 percent of the people surveyed said that they anticipate no alteration in rules pertaining to their policies, while 32 percent expect tighter rules, and only 8 percent expect less travel rules by 2014.

Ludovic Ciannarella, the director of global account management at Airplus, said, ‘The revolution is cancelled. 92 percent of buyers think rules will stay unchanged or tighten.

Also, 86 percent of buyers think that mobile technology will eventually help them to boost compliance but it won’t happen yet.’

In an earlier survey carried out by the company, around 45 percent of those surveyed expect an increase in total hotel nights for corporate travel in 2013, while 44 percent of the respondents expect their travel volumes to remain the same. Around 11 percent of the respondents expect a reduction in room nights, and another 11 percent expect a lowering of their hotel budgets for 2013, in comparison to 2012.

More Travel Managers Acquiring Control of Travel Plans

The Global Business Travel Association (GBTA), a US-based company focusing on the business travel industry, is reporting that travel managers across the world are being given more control of the travel decisions of corporate companies.

A survey of around 1,500 travel professionals worldwide revealed that around 60 percent of travel managers reported having more control over policy than previously. Around 64 percent of European travel managers reported an increase in control, far more than their counterparts in the rest of the world. Around 36 percent of European travel managers have reported setting travel policy, while 31 percent have reported being involved in driving compliance, and 38 percent reported the use of corporate tools.

Around half of the European managers, or 51 percent, are providing more information to online booking tools to drive the use of approved corporate booking channels to 80 percent.

Paul Tilstone, the managing director of GBTA Europe, said, ‘Travel professionals play a vital role in balancing the need to get travellers on the road to make the face-to-face connections that strengthen business ties while also spending corporate dollars wisely.

This study shows travel managers are gaining more control over budgets to help contain costs and ensure that road warriors can be as effective as possible.’

The study shows that 62 percent of travel managers in Europe are using mobile phones and social media more to stay in touch with their business travellers when they are on the road, while 34 percent of travellers use their smartphones and apps to stay in touch with their business colleagues.

The research has been conducted in collaboration with Egencia, a US-based online travel company and a subsidiary of Expedia. Christophe Peymirat, the senior vice president of EMEA and APAC at Egencia, said, ‘Our study shows that the impact of technology, such as mobile devices, is reshaping both the travellers’ experience and travel manager’s role in simultaneously supporting traveller needs and corporate objectives.’