Germany
with many executives taking trips mainly by road or rail to visit local customers and suppliers. “Given the large amount of in-country travel by air, rail and car there is a high degree of cost comparison in Germany. It is a high priority here,” says Otto Schweisgut, managing director of ATPI’s network partner in Munich. This healthy domestic market supports a thriving small hotel industry, local business travel agents and many travel management firms who cater to the specialised buying patterns of the Mittelstand. HRG Germany managing director Wolfgang Strasser says: “The top five TMCs [travel management companies] account for less than 20 per cent of the market. Small players have a huge role to play here.” This fragmentation is also reflected elsewhere. For instance, there are quite a number of different local booking engines in place, which need to be maintained by both travel buyers and agents.
CHECKING THE FIGURES Even though figures for the German market now look healthy, technically over the last ten years it has come down off a high, according to VDR data. Ten million
travelled back in 2002; less than nine million did so in 2011. Trips sank from almost 230 million to 164 million over the same period, while expenses dropped from
almost Ð50 billion to less than Ð45 billion. There are a number of reasons – travel management and buying has become smarter and more professional, and there are also now more cost controls and procurement processes and policies in place. “Suppliers have also reacted with new products – for example, low-
cost airlines and budget hotels, which are also used by business travellers,” explains ITB Berlin’s Otto-Rieke.
RAIL TRAVEL Domestically, rail journeys dominate the landscape for executive travel. The country has an extremely efficient and punctual network, albeit a monopoly, and the fares are nearly always cheaper than flying domestically. German rail also offers direct online booking to their customers and self-printout
Germany: trends, travel policies and more
• More than half of those who travel domestically book three-star hotels, according to VDR. Only six per cent book five-star accommodation.
• Germans are increasingly price- sensitive and are spending less on so-called ‘sundry costs’. Spending levels are back to 2007 levels.
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• Peer-to-peer recommendations online are increasingly influencing business bookings.
• The latest developments in Travel 2.0 and open bookings are not yet gaining traction in the local market within any business sector; nor is sustainability – an area where the UK has taken the lead.
• German companies have a different approach to buying business travel. They tend to select preferred suppliers across all markets as opposed to splitting them up geographically.
•It is common for many German companies to mandate their travel policy and to gain a high level of buy- in from their executives – the rules are the rules.
• Data protection can go too far – strong and active Workers Councils can restrict the release of data. Some German firms cannot utilise traveller reports or flag up bookings outside of policies due to privacy restrictions.
• When it comes to buying travel there is a high level of communication with all stakeholders and a focus on compliance.
• The market sees less focus on hotel brands and more focus on convenience and good value.
• Billback is not common. German hotels are usually booked by the TMCs and paid by the traveller, so there is a strong focus on credit cards and the reporting.
• A strong domestic decentralised business travel market has led to high standards and sophistication at home in rail and air travel, as well as hotels.
MAY/JUNE 2013
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