A specific illustration of this was provided by the latest Key Note Business Travel Market Assessment which examined the UK business travel market in terms of domestic and outbound travel by UK residents and overseas visitors. The Assessment noted that business travel for domestic, inbound and outbound travel had decreased in volume since before the recession, as has expenditure on business travel. The global recession exacerbated the market’s overall decline, with volumes falling by 18.7 percent between 2006 and 2010. The worst effected sector was outbound travel, which decreased in volume by 27.1 percent between 2006 and 2010, while the inbound sector was the only area of the market to witness growth.
According to the Assessment, themounting squeeze on businesses’ resources has resulted in them turning increasingly to budget travel and accommodation in order to keep costs down. Previously, budget airlines had not specifically targeted the business travel sector, but airlines, such as easyjet, are increasingly seeking to tap into this area of the market. The introduction of flexi-fares, new routes and a corporate sales team has been part of easyjet’s new business travel procurement strategy. Increasing costs have led to struggles for larger flag carrier airlines, but mergers have helped reduce these costs, with the biggest merger being between British Airways and Iberia in January 2011.
Air travel is still the dominant mode of transport for business travel, due to convenience and the large distances covered. However, EU emissions quotas coming into force for airlines from 2013 could push up the cost of air travel and see more travellers turning to high-speed rail. The European high-speed rail network is also set for expansion, linking more major European cities. The rising price of fuel is also a factor in rail’s favour, particularly for domestic travel. Technological advancements have also revolutionised business travel, improving productivity and efficiency, but also increasing competition through travel alternatives. Smartphone ‘apps’ now allow the reservations and booking of hotel rooms ‘on-the-go’. Travellers can also locate points of interest and work while in transit thanks to mobile Internet technology. However, these advances have also led to improved video conferencing capabilities, increasing competition for business travel.
Finally, the Assessment contends that the continued global economic uncertainties could result in a tough few years ahead for business travel in some world regions. In the coming years, growth in business travel is likely to be driven by emerging economies, as these have reported the largest growth in air traffic in recent years.
Incentive Travel
A positive note is struck by the Advito Industry Forecast, which noted that in 2012, incentive travel bookings were up on 2011, as companies recognized once more that the money spent on a reward trip can prove much more motivational than a straight cash bonus. The Forecast pointed to slightly rising budgets for incentive trips and suggested that US companies were increasingly considering offshore destinations.
Reed Exhibitions | EIBTM Trends Watch Report 2012 23
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