Welcome FOR COMPANY TRAVEL & MEETINGS BUYERS ISSUE 66 JANUARY/FEBRUARY 2014
Editor’s letter
Divining the data: technology trends for 2014
Eco-nomics Is business serious
about sustainable travel?
Airline Survey Take your seats:
key carriers’ vital statistics THINKING AHEAD ISSUE 66
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, Simone Buckley, Catherine Chetwynd, David Churchill, Amon Cohen, Rose Dykins, Martin Ferguson, Mark Frary, Tom Hall, Chloe Hay, Fergal Kelly, Betty Low, Gareth Morgan, Matthew Parsons, Ian Skuse, Graham Smith, Paul Wait Publisher Chris Mihalop Events Manager Emma Gordon 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
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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
© 2014 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
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AS WE LOOK FORWARD to what’s shaping up to be an interesting year, the content in this issue of BBT reflects the forward thinking in our sector that’s essential to keep pace with a travel industry that doesn’t stand still. Our Hotlist (p54) shines a spotlight on who and what is driving change and innovation in travel, while our cover story (p69) analyses the tech trends that will be the talking points – and action points – in 2014 and beyond. Not surprisingly, technology features heavily: we examine the threats and opportunities of social media (p82), and the new start-ups influencing the open booking debate (p78). But this year could be frustrating
as well. Politicians on all sides continue to dodge difficult decisions on key issues such as airport capacity and rail investment – they seem more focused on the 2015 election than long-term solutions.
It sometimes seems those in power misheard a Tony Blair mantra: tough on business travel, tough on the causes of business travel. However, from the news and views
The industry is not waiting around for Westminster
expressed here, it’s obvious the industry is not waiting around for Westminster. Besides, many managed travel professionals and the businesses they serve have a global outlook – and in a lot of cases they are focused on
the fast-moving emerging markets. This is reflected in reports throughout the magazine. China in particular was a hot topic at the CAPA aviation summit (p18), and we visit Shanghai’s new free trade zone (p112). As always, we need your feedback to ensure we continue to bring you a valuable professional resource, so keep in touch – comment at
www.buyingbusinesstravel.com or drop me a line at
prevel@panaceapublishing.com
Happy new year!
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Sustainable travel
Sustainable travel
STEPPING OFF THE GAS So, mixed messages – but what’s not obvious is to what extent people are aware of the differentials in CO2 emissions. For example, Eurostar says that on its London-Paris round-trips, its CO2 emissions work out at 6.6kg per passenger, against 102.8kg for a return flight between Luton and Paris Charles de Gaulle. Comparative figures for London-Brussels are 8.2kg by rail and 140.6kg by air. But what does a kilo of CO2 look like? The answer is that at normal atmospheric pressure, it’s about half a cubic metre. An Olympic-sized swimming pool has a minimum capacity of around 2,500 cubic metres, so it would hold 5,000kg of CO2, equivalent to nearly 760 Eurostar trips to Paris and back, but fewer than 50 return flights. Quit
the environment – apart from not good” – remains unclear but, if
Quite what this means in terms of the environment – apart from “not good” – remains unclear but, if
(CWT) thinks future generations of travellers are likely to be more attuned to sustainable ways of working, and to virtual meetings in particular. “Virtual meetings will always be an option for those companies that have invested in the technology and whose business practice can be handled via remote connections,” says Sandy Moring, CWT senior director for market strategy, business services and sustainability. She says future business
generations could potentially embrace virtual meetings more as it is part of their mindset, whereas at the moment “we’re in a crossover zone where we have long-established travellers in senior positions who still value highly the more traditional approach to doing business. The next generation coming through, with a completely different attitude and approach, could potentially be game-changing.”
As companies and their employees become greener,, Moring argues, so Moring
g
With many major economies back on track, the panic has subsided, and travel’s environmentalists are once again being given a fair hearing
panic has subsided, and tr e again being giv
Airplus International’s latest report is to be believed, the price of ignoring t avel emissions is going to be very
ECO VS ECONOMICS
The financial crisis pushed green issues off the agenda, but has the recent economic upturn seen a renewed interest in sustainable travel? Bob Papworth reports
74
ACCORDING TO THE FORESTRY COMMISSION, your average tree ‘locks up’ about 2kg of carbon dioxide (CO2) every year. If you add up all the trees in all the UK’s forests and woodlands (and someone at the Commission clearly had nothing much else to do that day), between them they suck about 10 million metric tonnes of CO2 out of the atmosphere every year. However, the UK’s total CO2 and greenhouse gas emissions amount to something like 600 million metric tonnes per year. Clearly, we need more trees...
Sustainability, and sustainable
travel in particular, are back on the agenda. In 2009, as the developed world finally woke up to the true extent of its economic woes, corporate interest in ‘green’ issues nose dived. Companies were too concerned about their own survival to worry about that of the rainforests and polar bears. Five years on, with many major economies back on track, the panic has subsided, and travel’s environmentalists are once again being given a fair hearing – but are they getting their message across?
A recent survey by the Guild of
Travel Management Companies (GTMC) of more than 1,000 regular business rail travellers revealed that “the company car has taken a back seat due to higher petrol prices, congestion, and not being able to work whilst travelling”. However, in general GTMC members’ car rental transactions are growing at a faster rate than that of rail – in the first nine months of last year, the former were 9.3 per cent up on the same period in 2012, while the latter were up only 4.1 per cent.
Airplus International’s latest report is to be believed, the price of ignoring travel emissions is going to be very high indeed. Its white paper, Business Travel
2060, paints an apocalyptic picture of a future in which nations go to war over water supplies; rising sea levels swamp roads and railways; and wildfires, extreme storms and higher winds could close ports and airports. “The environmental impact of pollution and emissions currently costs the global economy around US$4.7 trillion each year,” writes the report’s author, Mark Harris. “With the world’s fast-growing population, and rising incomes in emerging economies, demand for natural resources is on track to treble by 2050 – meaning that water and other critical raw materials for industry will be less available, and more expensive.”
VIRTUAL SOLUTIONS Not everyone subscribes to the doom-and-gloom scenario, however. Indeed, Carlson Wagonlit Travel
onomies back on tr air hearing
onmentalis Destination report
ys economic restraints mean that a travel management company’s (TMC) sustainability performance is “not yet a deal-breaker”, but as peer pressure and legislation initiates better performance on the sustainability agenda, more and more companies are committing to a strategy of best practice.
they will increasingly expect their suppliers to have followed suit. She says economic restraints mean that a
they will increasingly expect their ve followed suit. She
“When companies are able to engage and support each other’s strategies, then you are definitely coming nearer to being in a deal- making position,” she says.
If legislative and peer pressure
does force more corporates to toe the eco-friendly line, is there an advisory role for TMCs? Moring believes there is, and that CWT – which recently became the first TMC in the world to achieve Gold Medal status under the Global Business Travel Association’s (GBTA) Project Icarus corporate social responsibility scheme – is leading by example. “We are proactively
advocating sustainable travel practices and using our knowledge and position
PLANE TALKING
ENVIRONMENTAL ACTIVIST GROUP Greenpeace has called on the government to ban all UK mainland domestic flights and scrap its plans for airport expansion to force travellers to use greener rail services. “We don’t want to stop people from flying,” the organisation insists. “We do want to prevent the number of flights from growing to dangerous levels – the growth in aviation is ruining our chances of stopping dangerous climate change. “To achieve this, companies like British Airways need to end their needless short-haul routes, and the government needs to ban all mainland domestic routes, where the train is an easy alternative. Most importantly, the government must end plans for airport expansion.”
wh
y, the go ernment m xpansion.”
London to New York produces a greater carbon footprint than a whole year’s personal allowance needed to keep the climate safe.
As usual, hard facts are hard to come by. According to the Environmental Transport Association (ETA), just one return flight from ork pr
ding to the Envir A), jus
“The average personal footprint in Britain is 9.5 tonnes,” the association says. “To get down to a ‘fair’ share of the world’s total, this must be cut by 87 per cent, leaving 1.2 tonnes. On every flight to New York and back, each traveller emits about 1.2 tonnes of CO2. If we fly, air travel overshadows all our other impacts.”
ootprint than a whol “The av
eep the climate saf age per
ootprint in Britain is Destination report On the opposing side, the Air Transport Action
Group (ATAG) says that aviation emissions, although increasing rapidly, represent only 2 per cent of the global total. In 2012, ATAG says, human-induced CO2 emissions added up to 34 billion tonnes, only 680 million tones of which came from aviation. Furthermore, it says, aviation accounts for
only 12 per cent of the emissions produced by all transport modes, with road transport accounting for 74 per cent of the total. Business travellers themselves seem
ambivalent on the subject – an Audiencenet survey conducted for the GTMC revealed that more than 80 per cent of the 1,000 frequent flyers questioned said issues such as sustainability did not affect the amount of international business travel undertaken by their organisations.
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booked up to one year in advance. “Another trend we’ve noticed is Munich has the most expensive hotel market in Germany, with an average rate of €112 a night in Q3 of 2013,” he says. “However, it’s also ranked as the best value for hotels in the country,” adding that for overnight stays, Munich is the country’s second most popular destination after Berlin, with 9.7 million overnights during January to September 2013. LeRoy Sheppard is UK sales director for German hotel chain Maritim, which has 38 properties in the country, and focuses on business travel and MICE. He says: “Due to the strength of the automotive industry in Munich, as well as the city being the HQ of Siemens, both of these segments continue to be very strong source markets. We’ve also noted an increase in the number of pharma
19/12/2013 11:10 BRISK BUSINESS IN BAVARIA 110
LUFTHANSA’S WIDE-RANGING restructuring programme has been extensively reported – a fairly drastic efficiency-drive designed to boost operating profits to more than €2 billion by 2015. However this hasn’t stopped it investing heavily in one of its key hubs, Munich airport. Lufthansa has a 40 per cent stake in the airport’s Terminal 2, which is used exclusively by the national carrier and its partners. Lufthansa is sharing a €650 million investment with the airport owner to build a new 125,000sq m T2 satellite, which will have gates for 27 aircraft and increase capacity by 11 million passengers per year (MPPA) – the main terminal having reached its limit of around 25 million MPPA. At the topping out ceremony last autumn, airport CEO Michael Kerkloh said the satellite, which is scheduled for completion in 2015, is designed with a built-in option for a second-phase
expansion that could further increase capacity to 17 million MPPA. Marianne Sammann is Lufthansa’s director of passenger sales management for southern Germany. She says the airline’s current winter timetable offers flights from Munich to 112 destinations in 44 countries. “Each week about 5,000 Lufthansa flights take off from, or land at, Munich,” she says, adding that this summer will see new routes to Mexico and Toronto. It seems business travel and meetings, incentives, conferences and exhibitions (MICE) activity are helping drive demand for this added capacity. The Munich Convention Bureau reported some healthy statistics for the first ten months of 2013 – its monthly overnight stay figures averaged a 5.85 per cent year- on-year rise, while arrivals were up an encouraging 4 per cent.
MUNICH
With an airport revamp, top-notch convention facilities and the world's largest beer festival, could Munich be Germany’s ultimate MICE destination? Paul Revel reports
BAVARIA BY THE BARREL THE ROMANTIC ROAD TO OKTOBERFEST
So who is doing business in
Munich? Lufthansa’s Sammann says top sectors for the city include finance, hi-tech and automotive. “Munich is also Germany’s number one location for the insurance industry,” she says. “And there are around 22,000 hi-tech companies based in the area.” She adds: “Munich is Germany’s
DAX capital [DAX refers to the 30 largest companies trading on the Frankfurt stock exchange]. It’s the city with the highest number of DAX companies in Germany, of which six are headquartered in the area. And SMEs [small- and medium-sized enterprises] in Munich grow at a rate of 23,000 new registrations a year.” The Munich Convention Bureau says growing source markets for MICE include China, India, the Asia-Pacific region and the US. The convention bureau offers support services to events planners, including help with the request for proposal (RFP) process, coordination, accommodation, and pre- and post-event excursions. The hotel sector is also noting healthy demand from the corporate sector. Jon West, UK managing director for hotel booking specialist HRS, says his research shows that the city’s leading international fairs, and popular events such as the Oktoberfest beer festival (see panel, right), mean reservations tend to be
MY MEMORABLE BAVARIAN JOURNEY started in the pilot’s seat of an A380, and ended with dancing, singing and hoisting vast steins of beer while a live band belted out pop anthems to a 10,000-strong crowd, resplendent in dirndls and lederhosen. Our group flew from London, Manchester and Birmingham into Frankfurt airport, where we met retired veteran Lufthansa pilot Heinz Rieckert for a fascinating tour of the airline's cavernous, purpose-built A380 hangar, and had a chance to get up close and personal with a superjumbo – from its cockpit to its 22 nitrogen filled tyres and the 3 metre-diameter titanium fans in the vast Rolls-Royce engines. Rieckert said 40,000 items are delivered to the plane for every flight, from cutlery and condiments to the red roses for the first class cabin.
Then it was time to hit the Romantic Road, a picturesque route winding south through quintessential Bavaria. The route offers several options for corporate incentives and activities. Highlights include beautifully preserved medieval towns such as Rothenburg and Nordlingen – the only one in
Germany with a fully-intact city wall, best viewed in a glorious 360º panorama from the top of the 90m-tall tower of St George’s Church. The church and many other historic buildings are largely built of a rare rock called suevite, formed in the white heat of a massive meteor strike 15 million years ago – the town sits in a shallow crater 25km in diameter, formed by the impact. The town’s crater museum charts this epochal event and its history. Activities on this route often
involve imbibing – good training for the Oktoberfest beer festival at our journey’s end. There’s al fresco wine-tasting among the pretty vineyards at the family-run boutique estates at Bad Mergentheim, and artisan beer-tasting at the Wallerstein Brewery. At the Michelin-starred Mayers Keller restaurant, chef Joachim Kaiser cures his famous hams – said to rival those from Parma – for two years in the restaurant’s vaulted cellars. Then its time for the famous Oktoberfest. The figures speak for themselves: in 2013, 6.4 million revellers visited the 420,000sq m fairground and consumed 6.7 million litres of beer, as well as 114 whole oxen
Rothenburg: beautifully preserved
events.” He has seen business boosted by investment in both air networks and infrastructure on the ground. Sheppard and others cite the auto sector as a source of business, offering spectacular events opportunities. Munich is the home of BMW, and
The city’s international fairs, and events such as the Oktoberfest, mean reservations tend to be booked up to one year in advance
BMW World is a stylish events venue for petrol-head delegates, with its eye- catching architecture, factory tours, iconic vehicles from the past, and the latest gleaming models. Munich has the facilities you’d expect from a key destination, such as a large convention centre and a comprehensive list of luxury and
conference hotel brands. And beyond the ‘conventional’, there’s a wealth of modern and historic attractions and venues to tempt event planners. The splendid Residenz Palace complex houses priceless treasures that reflect the power of an 800-year royal dynasty, and the Versailles-style Nymphenburg Palace sits in acres of woodland, parks and ornamental lakes. Bavaria has dozens of fairytale castles, some of which offer stunning corporate event settings. However, while the region benefits from a strong core business base, infrastructure and international network, how it fares in 2014 and beyond will no doubt be affected by the fledgling ‘grand coalition’ agreed at the end of last year, which sees Chancellor Angela Merkel lead the government in partnership with the opposition Social Democratic party.
ansport
eturn flight fr s per
and 48 calves. We checked into Munich's 347-room Maritim hotel, which features extensive conference facilities and an indoor rooftop pool with city views – and is a ten-minute stroll from the fairground. Maritim’s UK sales director
LeRoy Sheppard says: “Oktoberfest is a pre-built, corporate event heaven. With its world-renowned reputation it automatically increases the interest of corporate clients looking to attract maximum numbers to an event.” However, he warns that “booking tables at the fairground is key to the success” of any corporate event. Leading the festivities
at Oktoberfest are the massive brewery-sponsored tents, with capacities of around 10,000. Their daily sessions with excellent live bands are very popular, and there are only a limited number of reservable tables in the VIP areas, and events managers need to plan well ahead to reserve these. Suffice to say, many steins
were hoisted, cheesy pop songs bellowed, tables danced on, and alarmingly silly hats donned... The perfect end to a trip that demonstrated the beguiling German ability to approach business and having fun with the same level of dedication.
Paul Revel 111
19/12/2013 11:11
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