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Welcome FOR COMPANY TRAVEL & MEETINGS BUYERS ISSUE 62 MAY/JUNE 2013


Editor’s letter


Game-changers The impact of new technologies


BBT MAY JUNE 13 V2.indd 6 Tough talk


Preferred supplier negotiations


Cruise control


Taking your meetings and events to sea


23/04/2013 10:51 Relative values ISSUE 62


Editor Paul Revel Digital Editor Rob Gill Executive Editor Bob Papworth Managing Editor Mike Toynbee Art Director Annie Harris Designer Javier Otero Sub Editor Richard Rees Contributors Caroline Allen, Alex Blyth, Scott Carey, Mark Caswell, Catherine Chetwynd, David Churchill, Amon Cohen, Felicity Cousins, Martin Cowen, Rose Dykins, Nick Easen, Mark Frary, William Maxwell, Gareth Morgan, Gary Noakes, Peter Nock, Jessica Puckett, Dave Richardson, Ian Skuse, Diane Steed, Paul Wait Publisher Chris Mihalop Marketing and circulation Claire Robson Production Manager Jamie Halling Editorial tel number +44 (0)20 7821 2715 Editorial fax number +44 (0)20 7821 2701 Email address editor@buyingbusinesstravel.com Advertising tel +44 (0)20 7821 2733 Advertising fax +44 (0)20 7821 2701 Email sales@buyingbusinesstravel.com Email subscriptions@buyingbusinesstravel.com Front cover image: Javier Otero


Buying Business Travel is published by Panacea Publishing International Ltd, 5th Floor, Warwick House 25-27 Buckingham Palace Road London SW1W 0PP United Kingdom Tel +44 (0)20 7821 2700 Fax +44 (0)20 7821 2701 Managing Director Julian Gregory Editorial Director Tom Otley


© 2013 Panacea Publishing International Ltd. The magazine is entirely independent of all commercial interests within the travel industry. Unsolicited manuscripts will not be accepted for publication. The opinions expressed by contributors are not necessarily those of the publishers who cannot accept responsibility for any errors or omissions. ISSN 2041-4242 www.buyingbusinesstravel.com


LOOKING OVER THIS ISSUE, I’ve noticed a theme running through it: the importance of relationships. We look at the shifting landscape of airline alliances (p26), the teamwork between departments that’s essential for duty of care (p42) and also for RFPs: a senior global travel buyer talks about assembling his internal team when he tendered for a new TMC contract (p9). We also examine another interesting relationship – the one between Carlson Wagonlit Travel and the Met Police’s travel manager (p34). Partnerships can include working with rivals: HRG boss David Radcliffe reveals a sophisticated approach to doing business in a fluid marketplace: “One man’s enemy is the same man’s friend in a different environment,” he says – as well as recalling a long and colourful career in our interview (p30). A more rocky relationship comes to mind – that between the two


Partnerships can include working with rivals


Koreas. As we go to press with a report on Seoul, we had a moment or two of uncertainty, but decided to go along with the overwhelming attitude displayed by the destination in this feature: vibrant, growing and business as usual. Talking of partnerships, here's one I'm definitely feeling nervous about: BBT is teaming up with Airplus to take part in Oxfam's Trailwalker challenge – a gruelling 100km hike across the South Downs, finishing in Brighton. It has to be done in 30 hours. If you'd like to support Oxfam and the the Gurkha Welfare Trust, please


sponsor us at www.justgiving.com/ TravellingTrailblazers Unbelievably, it’s nearly time to


start thinking about the Business Travel Awards 2014 – the website will be open for entries and bookings soon – keep an eye on www.buyingbusinesstravel.com and we’ll keep you updated via our e-newsletter, Linkedin and Twitter.


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Germany


Germany


A CHANGE IN THE AIR


A PROMINENT CHALLENGE at the moment is the transition that is happening at Lufthansa, Germany’s flag carrier, as it moves domestic routes into the Germanwings network. It is a major change for many business travellers as they need to adapt to a new air product and service levels on some of their frequently travelled routes. There is also an issue with accessing the best rates and lowest fares, which are no longer always featured on the GDS. In this respect, explains Helen Menniss, executive director, global account management for Global Star Travel Management, “many companies are


Mercedes-Benz factory in Stuttgart GERMANY: 96


WHILE EUROPE’S overleveraged countries – southern ones and small ones – struggle in the post-financial- crisis world and look to slash costs, question travel budgets, rein in spending and roll out compliance with an iron rod, German companies are still reaching out to travel and trade globally. “The business travel market in


Europe’s largest economy is probably among the top three in the world,” explains Gerd Otto-Rieke, consultant at ITB Berlin Business Travel Days.


Ruediger Bruss is purchasing


manager for global travel services at automotive giant Continental, based in Frankfurt. He says: “We saw tremendously strong demand for business travel in 2012”, and believes this will continue through 2013. He adds: “The Euro crisis had some impact for business in southern Europe, but the hope is that the countries directly affected by the crisis implement the tasks defined by the European Union, the European Central Bank and the


096-101 Germany3.indd 6-7 INDUSTRY REWARDS


An enviable record of low unemployment, a robust industrial base, consensus- seeking unions and flourishing SMEs – but what are the challenges in managing travel in Germany? Nick Easen reports


IMF as quickly as possible, and thus can improve their situation.”


POSITIVE FORECAST It helps that Germany was expected to return to weak growth in the first three months of this year and forecasts have been positive. The economy is still resilient, the labour market is stable and consumer spending is solid. This is reflected in the business travel market, which will remain


steady this year and grow slightly in 2014, according to a preliminary survey of 1,500 executives by Verband Deutsches Reisemanagement (VDR) – Germany’s travel managers' association. In the same survey, two out of five business travel managers in Germany predict that the number of flights purchased will increase in 2014, with more people travelling long-haul. The Mittelstand – the small- to medium- sized businesses that thrive in every corner of the country, specialising in machine tools, auto parts, chemicals and electrical equipment – are currently driving growth. This traditionally strong export base continues to go out on the road. “The nation’s engineers, company directors and sales people are increasingly reaching out to emerging economies in search of new business opportunities,” says Julian Munsey, head of strategic business development at Hillgate Travel. Mark Spivey is sales director for


the Maritim group, which operates conference hotels in the key German


cities. He agrees the Mittelstand are helping drive his day meetings business, while trade show attendees are a key market. “Hanover has the largest trade showground in the world, and Frankfurt and Cologne are both in the top ten worldwide,” he says. It helps that a previous decade of welfare reforms have largely kept a lid on wage inflation to date. Marry that with a boost in demand from


Germany’s economy is still resilient, the labour market is stable and consumer spending is solid


developing nations for high-value- added manufacturing, and you have the recipe for Germany’s highly competitive economy and success in recent years.


THE NUMBERS Travel spend breakdown in Germany looks like this:


Air tickets 27% 19% Rail Accommodation 25% 10% Meals Miscellaneous 11.5% 7.5% Car rental


reviewing their approach to air or rail on these domestic routes to ensure they are getting best value”. There are also other challenges in the


marketplace. Data security has become a major topic for buyers. Strong regulations make bookings difficult and individual arrangements have to be made by travel buyers in-house rather than agents. “Profile data on executives now


has to be kept in separate data warehouses, which then need to synchronise with distribution systems used by suppliers and TMCs,” says Franziskus Bumm, general manager, Europe, for FCM Travel Solutions.


GOOD NEWS, BAD NEWS It’s not all rosy for the years ahead though. Already German executives are cutting costs as they see prices for flights and hotels rise this year; then there are fears of the global economy creaking. Fares for economy and business class air tickets are likely to rise 3-5 per cent in 2013, according to the American Express Global Business Travel Forecast, while corporate- negotiated hotel rates are likely to increase by up to 4 per cent in Germany this year.


Continental’s Bruss cites concerns that UK travel buyers will be equally familiar with. “The main focus of buyers here is continuous cost management, and increasing deployment and use of online booking tools,” he says. “Another concern is the rise of ancillary fees in air travel with the expansion of Germanwings and Hop, and how to manage this both from a policy as well as buyer perspective.” Amex Business Travel’s general


manager for Germany, Anton Lill, says: “With the high demand, prices will likely increase by more than the rate of inflation this year. But travellers are being prudent and economically conservative at the moment because of concerns around the euro.”


There is also unease that Germany’s competitive edge will be eroded by rising wages. Thousands of workers are now benefiting from strong wage hikes. Then there are soaring energy costs after a bitter and


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Technology


THE NAME ofTHE GAME


Trying to predict the next game-changing innovation is no easy feat. Martin Cowen explores current thinking and finds out that the biggest thing in this field today is the way in which technologies can work with each other


CORPORATE BUYERS and travel management companies (TMCs) work hard to keep on top of technology. They need to keep an eye on costs, compliance, security and productivity. At the same time, business travellers are fragmenting into a mass of individuals, each with their own demands and devices. As some technologies mature, new ones emerge. Sarah Kennedy Ellis is director of Sabre’s ‘future lab’ division, Sabre Travel Studios, but she doesn’t have time for geekery for the sake of it – her Sabre roots are in the nitty- gritty of its global distribution system (GDS) business, so whatever tech innovation her team is working on, Ellis is always looking for return on investment, cost savings, new service enhancements or revenue streams. “You can measure the impact of technology by how much you’d miss it,” she observes. But despite the self-sustaining


evolutionary nature of technology development, every now and again something comes along that causes a significant shift in how things are done. Forward-thinking TMCs and corporates are trying to predict which of the emerging technologies today are likely to survive, and if any of these will be revolutionary for business travel.


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GOING MOBILE Many of us take the presence of mobile for granted, but it has taken some time to establish itself as the biggest sea-change in technology our generation has experienced. The smartphone – particularly the iPhone 4, released in 2010, and the emergence of Google’s Android platform for mobiles – heralded a big rethink in the relationship between the business traveller and their travel organiser. ATPI sales director Scott


Wylie refers to mobile in terms of the Gartner hype cycle – the business theory which identifies five stages in the development of any successful technology. A ‘technology trigger’ is followed by ‘a peak of inflated expectations’ which leads to the ‘trough of disillusionment’. “We’ve moved out of that stage,” he says. “And we’re starting the slope of enlightenment as we understand more.” Travel technology giant Amadeus identified mobile as the ‘next big thing’ many years ago. Rob Golledge,


Despite the growth in mobile use, many businesses are not working hard enough to capture its benefits


head of marketing communications for Amadeus, explains that it is now ready with what it considers a major innovation. Put simply, Amadeus’s corporate booking tool, Amadeus Travel Management (AETM) is now available on mobile devices, in an extension called AETM Mobile. Although it sounds simple, Golledge insists that the real game-changer here is the consistency and control for the corporate. Travellers use the same AETM password to access the mobile and web versions, ensuring that any data derived from the mobile can be used with a desktop. Version one is already in pilot, and by the end of this year the mobile version will be able to automate ticket changes, make hotel bookings and feed into expense management. “One of the biggest gripes our corporate clients have is that if they’ve set up the online booking tool to be policy compliant, often that compliance is lost when the travellers are on the road. So there is


no visibility to the corporate until the expense claims are looked at later,” Golledge says. “With AETM Mobile, bookings on the road can be as policy compliant as those made on a desktop.” Research commissioned by Amadeus backs up his claim that, despite the growth in mobile use, many businesses are not working hard enough to capture its benefits. “66 per cent of travellers are now able to book their business travel through an online booking tool, but only 33 per cent are able to book travel on a mobile or tablet device,” he says. Not all travel


buyers are enthused about booking tool advancements. One buyer for a giant mining firm says their complex


itineraries mean they use their TMC rather than any self-booking tools (SBTs). Another senior buyer in global finance insists the only tech gaps in her travel programme are self-booking abilities for multi-sector trips and trips to restricted countries – but adds this is down to company choice than lack of tools available.


She says: “The thing most people are talking about is mobile apps and gamification – I have very little time for either, I believe it’s predominately a media frenzy driven by those companies that have mobile apps or gamification processes.”


INTEGRATION IS KEY ‘Big data’ is a phrase which has entered the vernacular over the past two years. It is an umbrella term to cover initiatives based around the ability to capture, store and access data from different sources, link them together and come up with a new revenue stream, a cost reduction or some valuable business insight.


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Technology


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