Germany IN CONVERSATION…
Hans-Ingo Biehl Executive director, Verband Deutsches Reisemanagement (VDR)
coming years, the BRIC countries other than China [Brazil, Russia and India] will be important, too.
What is unique about the
Munich
lengthy winter, and what some see as a growing state role in the economy, which is beginning to discourage investment. The post-war Wirtschaftswunder, or economic miracle, came to an end because of a similar situation – bumper wage claims and a rise in regulation. The same could happen again, affecting business travel buying.
GERMANY IS DIFFERENT The German economy, like its executive travel, is structured differently from other European markets, due to its federal and decentralised nature. In France and the UK, many large corporations and much of those countries’ travel infrastructure, such as large airports and transport terminals, are concentrated in Paris and London. In contrast, Germany has more than 20
international airports spread all over the country. For instance, Frankfurt, which is neither the capital nor the biggest metropolis, has the biggest airport in the country. Federalism means German corporations are also spread out in various regions – goods-trading and shipping in Hamburg, insurance and consultancy in Munich for example. Major industry players can also be found in very rural areas. “This has a strong impact on the local infrastructure and economy, as well as on travel buying patterns,” explains Carlson Wagonlit Travel (CWT) vice-president Martina Eggler. This leads to more fragmented
routing. The majority of flights in the UK start or finish in London, while in Germany it is much more spread out. The dispersion of businesses throughout the country fuels a strong domestic travel market,
Who is buying? 98
THE MITTELSTAND, the small- to medium- sized businesses that form the backbone of Germany’s economy, is the biggest sector. Largely export- focused, they need to travel even when times are tough. They demand specialised services. However, the use of online booking tools in this market is still relatively low. Typically adoption rates sit at around
10 per cent. This market still likes to work by telephone or email with their trusted travel agent. German companies
with less than 500 employees generate approximately 80 per cent of business travel spend, according to the VDR. Since the economic downturn, it is often the boss of smaller companies who is directly responsible for bookings.
In terms of the number of business trips, this sector travels more often than big corporations. “We have seen mid- sized companies have a high share of long-haul travel, and also have special requirements, such as excess baggage in the machine engineering sector,” explains CWT’s Martina Eggler. Large corporations,
focused on
the chemical, pharmaceutical, electrical and automotive sectors – including big players such as Audi, BMW, BASF and Bayer – are the type of companies that have the majority of clout in the business travel buying market. The trips from large
corporations tend to be less complicated than those of the Mittelstand who are
inclined to go overseas for longer. The larger corporations mandate travel policies and expect both buy-in and more compliance from their executives. “Bigger German
companies have not been consolidating their travel buying internationally in the past, but consolidation is happening now,” explains HRG Germany's Wolfgang Strasser.
Hans-Ingo Biehl
Who is travelling in Germany? In recent times, small- to medium-sized
enterprises have become more cost-conscious – but despite this, companies with less than 500 employees still spend nearly Ð36 billion a year on business travel.
Where are business
travellers heading? The trend to
‘go east’ rings true here. China is a top
destination for German businesses, but equally so is the US. In the
German market? Other European markets are very much focused on
their capital cities, but this is not true in Germany. Our market is extremely decentralised with a huge number of business hubs across the country.
What specific challenges do
German buyers face? Rail travel is more restricted than in other
European countries because it is run as a monopoly, and therefore we don’t have a choice in providers. We are also being confronted with a concentration of airline alliances, which effectively decreases choice. However, this is also now true in other markets.
MAY/JUNE 2013
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