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Business Travel Worldwide - International - September 2010

This report provides an overview of business travel worldwide and is structured by type of travel service provider (ie airlines, hotels and car rental) as well as by selected geographical region.

Key findings:

  • Worldwide spending on business travel should decline for the second year in a row in 2010 – by an estimated 1.8% – but is projected to almost double to reach US$1.6 trillion by 2020.
  • Airlines are earning a growing proportion of their revenues on ancillary items (luggage check-in fees, in-flight meals, priority boarding, seat selection, etc), which poses a problem for cost estimates and price comparison of fares listed on the global distribution system (GDS), as well as for travel management groups and their clients.
  • After two years of sharp declines, premium (first- and business-class) air-ticket sales are rebounding, increasing by 11% year on year for the first five months of 2010.
  • Premium economy is a growing ‘fourth’ cabin-class option offering more space than standard economy seats but without the service of business class. So far the class is largely available only on European and Asian routes, as lack of standardisation prevents it from being integrated into the travel programmes of large North American companies.
  • Some airlines are attempting to offset credit card commissions, either by imposing surcharges on tickets purchased with credit cards or by blocking travel agencies from using airline merchant accounts for tickets purchased with credit cards. The effect ultimately is to drive up the cost of air tickets by 2% to 3%.

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Table of contents

  1. Introduction

      • Key findings
      • Data Sources

          • Abbreviations
          • Overview

              • Ageing of the population
                • Demographic implications
                  • Figure 1: Percentage distribution of the population in selected age groups by selected region and country, 2009 and 2050
                • Economic outlook
                  • Asia and Africa continue to lead the way
                    • Figure 2: Overview of WEO projections, 2008-11
                  • Trade forecasted to bounce back
                    • Financial markets have staged a strong recovery
                      • Inflation and interest rate outlook
                        • Figure 3: Inflation outlook by monetary zone, 2008-11
                        • Figure 4: Interest rate forecasts by currency zone, 6 August 2010
                      • Exchange rate outlook
                        • Short-term forecasts
                          • Figure 5: Exchange rate forecast, US$ against major currencies, July 2010
                        • The Euro has rebounded
                          • Figure 6: Exchange rate forecast, Euro against major currencies, July 2010
                        • No further rebound in sight for the Pound
                          • Figure 7: Exchange rate forecast, UK Pound against major currencies, July 2010
                        • The US Dollar to slide against most emerging market currencies
                          • Figure 8: Exchange rate forecast, US Dollar against Eastern European and Latin American currencies, July 2010
                        • The Renminbi un-pegged
                          • Figure 9: Exchange rate forecast, US Dollar against Asian currencies, July 2010
                        • Eastern European currencies stable against the Euro
                          • Estonia to adopt the Euro
                            • Figure 10: Exchange rate forecast, Euro against Eastern European and Latin American currencies, July 2010
                          • A slightly weaker Euro against Asian currencies
                            • Figure 11: Exchange rate forecast, Euro against Asian currencies, July 2010
                          • A similar outlook for the Yen
                            • Figure 12: Exchange rate forecast, Japanese Yen against Asian currencies, July 2010
                          • Business travel spending
                            • Spending by world region
                              • Figure 13: Business travel expenditure* worldwide and by region, 2010-20
                            • Spending by major country
                              • Figure 14: The biggest spenders on business travel, 2008 and 2018
                            • Projections incorporate currency assumptions
                            • Business Travel Transport

                                • Air travel
                                  • Capacity rebounding
                                    • Strong growth in Asia pacific, Middle East and Africa
                                      • Routes and airport capacity and frequency
                                        • Premium travel growing twice as fast
                                          • A mixed picture by region
                                            • Asia Pacific
                                              • Central and South America
                                                • Europe
                                                  • Middle East
                                                    • North Atlantic
                                                      • Figure 15: Premium traffic growth, by route, May 2009-10
                                                    • The rise of premium economy
                                                      • Still limited availability
                                                        • UAL the only US carrier to offer premium economy
                                                          • Availability on alliance partners
                                                            • A rethink since the recession
                                                              • Premium economy has survived the crisis in good form
                                                                • Air France’s Premium Voyageur
                                                                  • Better seats, same food
                                                                    • Business-class-like handling at the airport
                                                                      • Figure 16: Description of current premium economy offerings, 2010
                                                                    • ‘Preferred supplier’ versus ‘lowest logical airfare’
                                                                      • Preferred supplier policy
                                                                        • Preferred supplier benefits
                                                                          • Risks and challenges
                                                                            • Lowest logical airfare policy
                                                                              • Compliance remains an issue
                                                                                • Hybrid policies can pose problems
                                                                                  • Different policies for different markets
                                                                                    • US airlines rated by corporate travel buyers
                                                                                      • Figure 17: Business Travel News' Annual Airline Survey – US airlines* rated by service attribute, 2009
                                                                                    • Rating criteria definitions
                                                                                      • Figure 18: Explanation of ranking criteria for Business Travel News' Annual Airline Survey, 2009
                                                                                    • Continental and American lead the pack
                                                                                      • Bands versus buckets
                                                                                        • Criteria linkages
                                                                                          • Growing discontent with the sector
                                                                                            • Buyers want more pricing flexibility
                                                                                              • Airlines accused of ‘nickel-and-diming’
                                                                                                • Better tracking of ancillary fees desired
                                                                                                  • Airlines wary of the ‘new normal’
                                                                                                    • Southwest still the value-for-money champion
                                                                                                      • Ancillary fees
                                                                                                        • Figure 19: Top 10 airlines – ranked by total ancillary revenue, 2008-09
                                                                                                      • Pay extra to jump the queue
                                                                                                        • easyJet
                                                                                                          • easyJet Plus
                                                                                                            • Southwest
                                                                                                              • Jump the queue for US$10
                                                                                                                • American’s ‘Your Choice’
                                                                                                                  • Gogo Inflight Wireless Internet
                                                                                                                    • Figure 20: Gogo Inflight Wireless Internet services, by type and cost, 2010
                                                                                                                  • Admirals Club and rescheduling
                                                                                                                    • AAdvantage Mileage Multiplier
                                                                                                                      • Early boarding coming soon
                                                                                                                        • Speeding up security
                                                                                                                          • Towards more ‘bundled’ services?
                                                                                                                            • UAL’s ‘Premier Travel’
                                                                                                                              • Airlines to mimic the hotel sector?
                                                                                                                                • Reduction in credit card fees could drive up travel costs
                                                                                                                                  • Why are airlines now trying to eliminate merchant costs?
                                                                                                                                    • Impact on corporate travel costs
                                                                                                                                      • The advantages of using credit cards
                                                                                                                                        • The consequences of airline merchant fee offsets
                                                                                                                                          • BA versus Amex
                                                                                                                                            • Surcharging
                                                                                                                                              • Restricted merchant account model
                                                                                                                                                • Asia-Pacific practice quite different
                                                                                                                                                  • Car rental
                                                                                                                                                    • Negotiations save up to 30% on standard rates
                                                                                                                                                      • Figure 21: Annual car rental savings by spend of the companies sampled by the Runzheimer Car Rental Negotiations study, 2010
                                                                                                                                                    • Longer contracts
                                                                                                                                                      • Mileage thresholds for rental car use
                                                                                                                                                        • Survey sample profile
                                                                                                                                                          • Figure 22: Business sector profile of Runzheimer Car Rental Negotiations study sample, 2010
                                                                                                                                                          • Figure 23: Revenue profile of the Runzheimer Car Rental Negotiations study sample, 2010
                                                                                                                                                          • Figure 24: Travel budget profile of the Runzheimer Car Rental Negotiations study sample, 2010
                                                                                                                                                          • Figure 25: Number of frequent travellers in the companies sampled by the Runzheimer Car Rental Negotiations study, 2010
                                                                                                                                                          • Figure 26: Annual car rental spend of the companies sampled by the Runzheimer Car Rental Negotiations study, 2010
                                                                                                                                                        • Trend toward outsourcing
                                                                                                                                                          • Most are dealing with one or two rental companies
                                                                                                                                                            • Figure 27: Number of signed contracts for negotiated car rental rates sampled in the Runzheimer Car Rental Negotiations study, 2010
                                                                                                                                                          • No rental contracts for more than three years
                                                                                                                                                            • Figure 28: Average length of car rental contracts for the companies sampled by the Runzheimer Car Rental Negotiations study, 2010
                                                                                                                                                          • Flat-rate concessions the most frequent type of discount
                                                                                                                                                            • Figure 29: Type of car rental discounts for the companies sampled by the Runzheimer Car Rental Negotiations study, 2010
                                                                                                                                                            • Figure 30: Negotiated flat-fee rate for domestic intermediate/standard car rental for the companies sampled by the ‘Car Rental Negotiations’ study, 2010
                                                                                                                                                            • Figure 31: Negotiated flat-fee rate for domestic compact car rental for the companies sampled by the Runzheimer Car Rental Negotiations study, 2010
                                                                                                                                                            • Figure 32: Average negotiated discount for domestic car rental for the companies sampled by the Runzheimer Car Rental Negotiations study, 2010
                                                                                                                                                          • Unlimited mileage the most wanted concession
                                                                                                                                                            • Figure 33: Concessions received from rental car companies sampled by the Runzheimer Car Rental Negotiations study, 2010
                                                                                                                                                          • Guaranteed Dollar volume – the most frequent condition
                                                                                                                                                            • How organisations insure rental cars
                                                                                                                                                              • Accidents
                                                                                                                                                                • Satisfaction levels and complaints
                                                                                                                                                                  • What will change in future?
                                                                                                                                                                    • Figure 34: Expected car rental programme changes in 2011 for the companies sampled by the Runzheimer Car Rental Negotiations study, 2010
                                                                                                                                                                  • Used car prices up
                                                                                                                                                                    • Glut of used cars has dissipated
                                                                                                                                                                      • Hertz raises rates
                                                                                                                                                                        • Avis Budget’s no-show fees
                                                                                                                                                                          • US market share trends
                                                                                                                                                                            • Figure 35: Hertz’ estimate of on-airport market share in the US, 2003-09
                                                                                                                                                                          • Consolidation of sector continues
                                                                                                                                                                            • Hertz has offered to buy Dollar Thrifty
                                                                                                                                                                              • Hertz counter-offer accepted
                                                                                                                                                                                • Rail travel
                                                                                                                                                                                  • Slow growth recently
                                                                                                                                                                                    • Figure 36: Volume of passenger rail traffic, by region, 2006-09
                                                                                                                                                                                  • The green alternative
                                                                                                                                                                                    • Japan ahead of the game
                                                                                                                                                                                      • Figure 37: Summary of rail/air competitive position on major intercity routes in Japan, 2009
                                                                                                                                                                                    • Premium economy on Eurostar
                                                                                                                                                                                      • Rail gaining share in the UK
                                                                                                                                                                                        • Rail up 31%, air down 20%
                                                                                                                                                                                        • Business Travel Accommodation

                                                                                                                                                                                            • 250,000 business hotels worldwide
                                                                                                                                                                                              • Figure 38: Estimated number of business hotels worldwide, by region, 2009
                                                                                                                                                                                            • US business traveller hotel ratings
                                                                                                                                                                                              • Ritz-Carlton top ranked in the luxury segment
                                                                                                                                                                                                • Luxury segment suffering from overcapacity
                                                                                                                                                                                                  • Ritz-Carlton’s new approach to service
                                                                                                                                                                                                    • Celebrity chefs introduced
                                                                                                                                                                                                      • Waldorf-Astoria on the rise
                                                                                                                                                                                                        • Supply concerns to be relieved
                                                                                                                                                                                                          • Figure 39: Business Travel News’ US Hotel Chain Survey ranking for luxury hotel brands, 2010
                                                                                                                                                                                                        • Upper upscale rankings
                                                                                                                                                                                                          • InterContinental and Hilton the best overall performance
                                                                                                                                                                                                            • Marriott has dropped precipitously
                                                                                                                                                                                                              • Sofitel on the upswing
                                                                                                                                                                                                                • Boutiques do not cut it with business travellers
                                                                                                                                                                                                                  • IHG – the classic business traveller brand
                                                                                                                                                                                                                    • Upper upscale hit worse than luxury in 2009
                                                                                                                                                                                                                      • Development continues
                                                                                                                                                                                                                        • Figure 40: Business Travel News’ US Hotel Chain Survey ranking* for upper upscale hotel brands, 2010
                                                                                                                                                                                                                      • Crowne Plaza leads the upscale/select-service segment
                                                                                                                                                                                                                        • Half a billion dollars of investment
                                                                                                                                                                                                                          • Hilton Garden Inn still a strong second
                                                                                                                                                                                                                            • Hyatt Place expanding rapidly
                                                                                                                                                                                                                              • Another low-ranked Starwood offering
                                                                                                                                                                                                                                • Supply growth remains a problem
                                                                                                                                                                                                                                  • Figure 41: Business Travel News’ US Hotel Chain Survey ranking for upscale/select service hotel brands, 2010
                                                                                                                                                                                                                                • Hampton Inn – practically a clean sweep in the mid-price category
                                                                                                                                                                                                                                  • La Quinta also benefiting from trading down
                                                                                                                                                                                                                                    • Holiday Inn’s brand makeover
                                                                                                                                                                                                                                      • Mid-price without food & beverage seen to be outperforming
                                                                                                                                                                                                                                        • Without food & beverage gets a higher ADR
                                                                                                                                                                                                                                          • Supply growth slowdown not as dramatic as in upper tiers
                                                                                                                                                                                                                                            • Figure 42: Business Travel News’ US Hotel Chain Survey ranking* for mid-priced hotel brands, 2010
                                                                                                                                                                                                                                          • Contradictory evidence for trend in 2010 rates
                                                                                                                                                                                                                                            • Pegasus says hotel rates have gone up
                                                                                                                                                                                                                                              • Rates still 9% below levels two years ago
                                                                                                                                                                                                                                                • Figure 43: Change in volume and price of hotel reservations via GDS worldwide, 2010
                                                                                                                                                                                                                                              • North American GDS data
                                                                                                                                                                                                                                                • Figure 44: Change in volume and price of hotel reservations via GDS in North America, 2010
                                                                                                                                                                                                                                              • GDS data outside North America
                                                                                                                                                                                                                                                • Figure 45: Change in volume and price of hotel reservations via GDS outside North America, 2010
                                                                                                                                                                                                                                              • Forward booking trends
                                                                                                                                                                                                                                                • Signs of stabilisation according to HRG
                                                                                                                                                                                                                                                  • No full recovery before 2012
                                                                                                                                                                                                                                                    • Changes in the world’s most expensive cities ranking
                                                                                                                                                                                                                                                        • Figure 46: Ten most expensive cities in the world, first half 2010 vs first half 2009
                                                                                                                                                                                                                                                      • Trend in rates in key cities
                                                                                                                                                                                                                                                        • Figure 47: Key global focus cities – ADRs, Q1 & Q2/2010 vs Q1 & Q2/2009
                                                                                                                                                                                                                                                        • Figure 48: Greatest increases/decreases in ADR, first half 2010 vs first half 2009
                                                                                                                                                                                                                                                      • Regional round-up
                                                                                                                                                                                                                                                        • Rate trends by grade
                                                                                                                                                                                                                                                          • Budget sector competing with three- and four-star segment
                                                                                                                                                                                                                                                            • UK focus
                                                                                                                                                                                                                                                              • Figure 49: Key UK focus cities – ADRs, first half 2010 vs first half 2009
                                                                                                                                                                                                                                                            • North American focus
                                                                                                                                                                                                                                                              • Figure 50: Key North American focus cities – ADRs, first half 2010 vs first half 2009
                                                                                                                                                                                                                                                            • Hotel rates down so far in 2010 says Amex
                                                                                                                                                                                                                                                              • Trend in rates varies by destination
                                                                                                                                                                                                                                                                • Figure 51: Average hotel rates as tracked by American Express Business Travel, 2008-10
                                                                                                                                                                                                                                                            • Business Travel Management and Distribution

                                                                                                                                                                                                                                                                • The trend towards consolidation
                                                                                                                                                                                                                                                                  • 81% consolidated in the US
                                                                                                                                                                                                                                                                    • A trend towards outsourcing
                                                                                                                                                                                                                                                                      • Social networking and mobile apps
                                                                                                                                                                                                                                                                        • An interactive online itinerary
                                                                                                                                                                                                                                                                          • Amex wants a proprietary offering
                                                                                                                                                                                                                                                                            • CWT and BCD have a different approach
                                                                                                                                                                                                                                                                              • American Express
                                                                                                                                                                                                                                                                                • Travel management a small part of Amex
                                                                                                                                                                                                                                                                                  • Revenue recognition
                                                                                                                                                                                                                                                                                    • MaXvantage – an alliance with Maritz Travel
                                                                                                                                                                                                                                                                                      • CXO Planning Dashboard
                                                                                                                                                                                                                                                                                        • Less reliance on commissions
                                                                                                                                                                                                                                                                                          • eXpert for virtual meetings
                                                                                                                                                                                                                                                                                            • Social networking presence
                                                                                                                                                                                                                                                                                              • BCD
                                                                                                                                                                                                                                                                                                • Travel management
                                                                                                                                                                                                                                                                                                  • Corporate social responsibility
                                                                                                                                                                                                                                                                                                    • BCD Travel Marine Services
                                                                                                                                                                                                                                                                                                      • Consulting
                                                                                                                                                                                                                                                                                                        • Meetings & Incentives
                                                                                                                                                                                                                                                                                                          • Leisure services
                                                                                                                                                                                                                                                                                                            • Carlson Wagonlit Travel
                                                                                                                                                                                                                                                                                                              • Present in 150 jurisdictions
                                                                                                                                                                                                                                                                                                                • Traveller and transaction services
                                                                                                                                                                                                                                                                                                                  • Programme optimisation
                                                                                                                                                                                                                                                                                                                    • Safety and security
                                                                                                                                                                                                                                                                                                                      • Meetings & Events
                                                                                                                                                                                                                                                                                                                        • Hogg Robinson Group
                                                                                                                                                                                                                                                                                                                          • Figure 52: Major stakes in HEG shares, 2010
                                                                                                                                                                                                                                                                                                                        • HRG’s client base
                                                                                                                                                                                                                                                                                                                          • New clients
                                                                                                                                                                                                                                                                                                                            • Expanded contracts
                                                                                                                                                                                                                                                                                                                              • Client business sectors
                                                                                                                                                                                                                                                                                                                                • Figure 53: HRG’s client revenue by industry, in order of magnitude, 2010
                                                                                                                                                                                                                                                                                                                              • Europe contributes over two thirds of revenue
                                                                                                                                                                                                                                                                                                                                • Cost reductions have protected margins
                                                                                                                                                                                                                                                                                                                                  • UK dragged down by banking and finance sector
                                                                                                                                                                                                                                                                                                                                    • A pickup in Germany noted
                                                                                                                                                                                                                                                                                                                                      • North America benefited from weakening Pound
                                                                                                                                                                                                                                                                                                                                        • Asia Pacific
                                                                                                                                                                                                                                                                                                                                          • A strong pickup in Singapore
                                                                                                                                                                                                                                                                                                                                            • Major OTAs
                                                                                                                                                                                                                                                                                                                                              • Egencia – Expedia’s business travel management division
                                                                                                                                                                                                                                                                                                                                                • Orbitz Road Warrior
                                                                                                                                                                                                                                                                                                                                                  • Travel alerts
                                                                                                                                                                                                                                                                                                                                                    • OrbitzTLC Mobile Access
                                                                                                                                                                                                                                                                                                                                                      • Hotel alerts and reviews
                                                                                                                                                                                                                                                                                                                                                        • Travelocity Business
                                                                                                                                                                                                                                                                                                                                                          • Global Distribution Systems
                                                                                                                                                                                                                                                                                                                                                            • US airlines in conflict with GDSs over ‘full content’ definition
                                                                                                                                                                                                                                                                                                                                                              • Buyers wish to access ancillary fee data via GDSs
                                                                                                                                                                                                                                                                                                                                                                • Sabre’s ‘Air Total Pricing’ solution
                                                                                                                                                                                                                                                                                                                                                                  • Total pricing already exists for rental cars
                                                                                                                                                                                                                                                                                                                                                                    • Enhanced transparency across booking channels
                                                                                                                                                                                                                                                                                                                                                                      • A technological issue, not a contractual one
                                                                                                                                                                                                                                                                                                                                                                        • Amadeus also working on a solution
                                                                                                                                                                                                                                                                                                                                                                          • ARC caught in the middle
                                                                                                                                                                                                                                                                                                                                                                            • Waiting for the airlines to act
                                                                                                                                                                                                                                                                                                                                                                              • Congress to force the issue?
                                                                                                                                                                                                                                                                                                                                                                              • Meetings, Incentives, Conferences and Exhibitions

                                                                                                                                                                                                                                                                                                                                                                                  • Corporates and non-corporates
                                                                                                                                                                                                                                                                                                                                                                                    • Substantial differences between market segments
                                                                                                                                                                                                                                                                                                                                                                                      • Figure 54: Differences regarding four key criteria between corporate and non-corporate clients, 2010
                                                                                                                                                                                                                                                                                                                                                                                    • Between 0.5% and 1.5% of total revenues
                                                                                                                                                                                                                                                                                                                                                                                      • MICE most important for pharmaceutical and consulting sectors
                                                                                                                                                                                                                                                                                                                                                                                        • Figure 55: Importance of meetings and events as a marketing channel, 2010
                                                                                                                                                                                                                                                                                                                                                                                        • Figure 56: Estimated MICE spend by business sector, 2009
                                                                                                                                                                                                                                                                                                                                                                                      • Spending has fallen drastically
                                                                                                                                                                                                                                                                                                                                                                                        • Figure 57: Estimated real growth rate of MICE expenditure and GDP, 2003-07*
                                                                                                                                                                                                                                                                                                                                                                                      • Exhibitions
                                                                                                                                                                                                                                                                                                                                                                                        • 13.5% capacity increase 2006-10
                                                                                                                                                                                                                                                                                                                                                                                          • Venues are biggest in Europe and Asia
                                                                                                                                                                                                                                                                                                                                                                                            • Figure 58: Venues and indoor exhibition space – number of venues by size category, 2006*
                                                                                                                                                                                                                                                                                                                                                                                          • Most space concentrated in five countries
                                                                                                                                                                                                                                                                                                                                                                                            • High-growth markets
                                                                                                                                                                                                                                                                                                                                                                                              • Strong growth in emerging markets
                                                                                                                                                                                                                                                                                                                                                                                                • Figure 59: Country venue capacity, top 10, by end 2010
                                                                                                                                                                                                                                                                                                                                                                                              • CEIR demonstrates value of attending exhibitions
                                                                                                                                                                                                                                                                                                                                                                                                • Attendance likely to have declined in 2009
                                                                                                                                                                                                                                                                                                                                                                                                  • MICE planners
                                                                                                                                                                                                                                                                                                                                                                                                    • WizMeetings International
                                                                                                                                                                                                                                                                                                                                                                                                      • A 30% rebound in business
                                                                                                                                                                                                                                                                                                                                                                                                        • Incentive travel
                                                                                                                                                                                                                                                                                                                                                                                                          • Non-cash rewards more effective
                                                                                                                                                                                                                                                                                                                                                                                                            • Incentive travel most impacted by crisis
                                                                                                                                                                                                                                                                                                                                                                                                              • An improving outlook, however
                                                                                                                                                                                                                                                                                                                                                                                                                • Figure 60: Impact of economy on incentive travel and merchandise/non-cash incentive programmes, 2009-10
                                                                                                                                                                                                                                                                                                                                                                                                              • Virtual meetings
                                                                                                                                                                                                                                                                                                                                                                                                                • 47% saving money with videoconferencing
                                                                                                                                                                                                                                                                                                                                                                                                                  • Videoconferencing replacing internal meetings
                                                                                                                                                                                                                                                                                                                                                                                                                    • Comparison of various technologies
                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 61: Comparison of web conferencing, videoconferencing and telepresence features, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                    • Telepresence not more expensive on per-unit basis
                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 62: Economics of videoconferencing and telepresence*, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                    • Growth in use of telepresence
                                                                                                                                                                                                                                                                                                                                                                                                                      • Tata Communications’ public suites
                                                                                                                                                                                                                                                                                                                                                                                                                        • Earlier adapters saving money on travel
                                                                                                                                                                                                                                                                                                                                                                                                                          • More than 300 companies using Cisco’s system
                                                                                                                                                                                                                                                                                                                                                                                                                            • Hotel chains, travel managers and GDSs jumping on bandwagon
                                                                                                                                                                                                                                                                                                                                                                                                                              • Marriot
                                                                                                                                                                                                                                                                                                                                                                                                                                • Starwood
                                                                                                                                                                                                                                                                                                                                                                                                                                  • Rendezvous Hotel Singapore
                                                                                                                                                                                                                                                                                                                                                                                                                                    • Travel managers also
                                                                                                                                                                                                                                                                                                                                                                                                                                      • Amex has followed suit
                                                                                                                                                                                                                                                                                                                                                                                                                                        • Will it permanently impact growth in business travel?
                                                                                                                                                                                                                                                                                                                                                                                                                                        • Business Travel in Asia and Europe

                                                                                                                                                                                                                                                                                                                                                                                                                                            • China
                                                                                                                                                                                                                                                                                                                                                                                                                                              • Only 16% cut expenses in 2009
                                                                                                                                                                                                                                                                                                                                                                                                                                                • 31% to increase spending in 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                  • An emphasis on compliance
                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Outbound business travel
                                                                                                                                                                                                                                                                                                                                                                                                                                                      • A high value-adding market
                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Becoming more targeted
                                                                                                                                                                                                                                                                                                                                                                                                                                                          • The agencies have adapted their offer
                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Lack of qualified staff a problem
                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Upscale business travel products to France
                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Shopping, skiing, golf and wine tours
                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Beijing, Shanghai and Guangzhou – the main source markets
                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Exploratory tours for business travellers in the Netherlands
                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Netherlands increasing its market share
                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • 40-50% of incoming Chinese are business travellers
                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • India
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • A fragmented market
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Inconsistent infrastructure
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • More supply has relieved some bottlenecks
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Air travel returned to growth a year ago
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Many travel services not on GDS
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Low level of credit-card usage
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Traditional travel programmes dominate
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Hard bargaining and high service expectations
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Japan
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • High expectations – unique challenges for travel managers
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • More airport capacity to relieve pressure at high holidays
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • 80% of business travel transactions concern domestic trips
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Market characteristics
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Travel patterns and suppliers
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Adoption of online booking tools slow
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Corporate travel programmes
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Travel policies difficult to put in place
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Japan still a cash society
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Europe
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Service providers much more willing to negotiate
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • A sharp improvement in the attitude of hoteliers
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 63: Buyer perception of vendors’ current attitudes toward negotiating favourable pricing agreements for European points of sale compared with 6 months previous, 2008-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Air travel
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Increased use of LCCs and restricted fares
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Tighter restrictions on business-class usage
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Travel policies standardised and expanded
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Travel policy covering more issues
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Reduction in preferred suppliers
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Figure 64: Issues covered in European corporate travel policies, 2007-08
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Germany
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Government up, private sector down
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Larger companies more resilient
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Figure 65: Total business travel spending in Germany, 2005-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Shorter trips in 2009
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Figure 66: Length of business trips in days, 2005-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Long-term decline in average cost per trip
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Travel managers can save money
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 67: Average business travel spending by size of company, 2007 and 2009
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Business travellers spend more
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Cost breakdown of business travel
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Rail relatively important
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 68: Cost breakdown, by type of business travel spending, 2008-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 69: Detail of the €5.5 billion of ‘other’ business travel spending, 2008-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Airline booking class
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 70: Trend in airline booking class by type of flight, 2005 and 2009
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Overnight stays
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 71: Overnight stays by size of company, 2005-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Two thirds of overnights domestic
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 72: Number of overnight stays in Germany and abroad, 2008-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Decline in hotel spending
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 73: Turnover for overnight stays (room nights) by business travellers in Germany and abroad, 2007-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Trend in accommodation grade
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 74: Business travel accommodation, by grade, 2008-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Four- and five-star accommodation when abroad
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 75: Accommodation categories on business trips in Germany and abroad – business traveller overnights, 2009
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Public-sector travel
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 76: Ranking of foreign business destination countries, 2005/10
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Trade an important influence on German business travel
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 77: Germany’s leading trading partners, imports and exports, 2009
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Internal management of travel expenditure
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • A need for certified travel managers?
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Figure 78: Responsibility* for core business travel management tasks, 2004 and 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Other tasks handled by travel managers
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Figure 79: Further tasks* entrusted to travel managers, 2009-10
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Implications of VAT reduction on hotel nights
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Reaction of travel buyers
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Figure 80: Measures* taken when purchasing overnight stays, in reaction to reduction in VAT, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Impact of economic crisis
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Figure 81: Consequences of the financial crisis for business travel management*, 2009-10
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Measures taken
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • 60% say changes will be permanent
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Figure 82: Most important measures implemented in business travel since 2008
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Outlook for 2011
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Figure 83: Estimated trend in overnight stays and various means of transport, 2011
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • UK
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Domestic business travel
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Mostly one night only
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Some regional differences
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 84: Summary of UK domestic business travel, by region, 2009
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Outbound business travel has slumped
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 85: Outbound business trips from the UK, 2007-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Spending down by a bit less
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 86: Spending on outbound business travel from the UK, 2007-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Inbound business travel also took a tumble
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 87: Inbound business trips to the UK by regional source market, 2007-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Spending down by less
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Figure 88: Spending on inbound business trips to the UK, by regional source market, 2007-09
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Inbound business traveller market profile
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Corporate Social Responsibility and Sustainable Development

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Corporate social responsibility
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Verifying the supply chain
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Regular audits to ensure compliance
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Limiting damage to the environment
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Green meetings
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Electric rental cars
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Still some unanswered questions
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Green initiatives in Europe
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • CO2 policy vis-à-vis suppliers
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 89: Environmental criteria* included in travel policies, 2009
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Cultural differences
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 90: Internal measures* taken to reduce environmental impact by European companies, by country/region, 2009
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Internal initiatives
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Figure 91: Internal measures taken to reduce environmental impact, by European companies, 2009
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • What Next?

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Global business travel forecast
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Figure 92: Amex Global – forecast for travel prices by category, y-o-y change, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Forecasts by region
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • North America
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Figure 93: North America – forecast for travel prices by category, y-o-y change, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Europe
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Figure 94: Europe – forecast for travel prices by category, y-o-y change, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Latin America
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Figure 95: Latin America – forecast for travel prices, by category, y-o-y change, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Asia Pacific
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Figure 96: Asia Pacific – forecast for travel prices by category, y-o-y change, 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Higher prices for air travel, hotels and meetings in 2011
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Hotel prices up, ground transportation down
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Lower car-rental rates
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • Meetings activity picking up
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    • Hotel rate negotiations will be tougher this year
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      • Second-quarter results exceed expectations
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        • Timing a challenge
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          • Major urban markets on the upswing
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            • Upper upscale and luxury comeback
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Environmental taxes and restrictions
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • Figure 97: Current airline passenger duty and scheduled increases for 1 November 2010
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • Germans move to tax air travel

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Companies Covered

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Business Travel Worldwide - International - September 2010

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              £1,495.00 (Excl.Tax)