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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
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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