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Business Traveller - UK - August 2013

“There is scope for airlines to better attract business travellers by offering more optional, business-focused extras on top of standard or economy class tickets, thereby circumventing inflated APD charges for premium classes. While low-cost airlines often charge extra for allocated seating or additional legroom, there is scope to offer power sockets or on-board or pre-flight Wi-Fi access.”

– Harry Segal, Research Analyst

Some questions answered in this report include:

  • How can the industry tempt people away from using their own cars?
  • How can brands cater to demands to extend business trips for leisure?
  • What does the shift away from premium travel mean for the industry?
  • How will Deutsche Bahn’s cross-Channel venture affect the market?

Recovery in the UK business travel market has been a mixed bag. While the domestic market had recovered to pre-crash levels by 2011, growth has since slowed as fluctuating business confidence and cutbacks serve to dampen demand. The overseas market, however, has failed to recover from the crash suffered in 2009 and, while the market has enjoyed minor growth over the last two years, is expected to slip back into contraction in 2013.

While travel management companies have reported steady year-on-year transactional growth since 2009, they have a range of threats to content with, not least the high use of personal cars that serves to cut companies out from a lucrative chunk of the market.

This report examines business trips taken by UK residents and forecasts how the market will perform over the next five years. It explores the challenges and opportunities that operators will face in 2013/14 and investigates the core drivers behind changes in the market. The report also examines consumer attitudes towards business trips and highlights key innovations in the market. 

 

Definition:

This report examines business travel by UK residents, both within the UK (domestic) and overseas. Such travel can include business meetings, incentive trips and attending conferences, exhibitions and trade shows.

An adult, for the purposes of Mintel’s research, is anyone aged 16 or over.

The standard travel and tourism definitions used in the terminology of this report are as follows:

  • Tourism is any travel which involves at least one overnight stay away from home.
  • A holiday is a subjectively defined form of tourism, as defined by the tourist in response to surveys such as the IPS. A holiday can be distinguished from other leisure travel such as visits to friends and relatives (VFR) or shopping trips.
  • Short-haul refers destinations within Europe. The following destinations are considered to be short-haul: Austria, Belgium, Bulgaria, Croatia, Cyprus EU, Cyprus Non-EU, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Irish Republic, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Russia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey and Other Europe.
  • Long-haul refers to destinations outside of Europe.
  • The Canaries are included as a part of the Spanish market, and Madeira and the Azores are included as part of the Portuguese market.
  • A package holiday is defined as the simultaneous sale of at least two elements of a holiday to the traveller: fares on public transport (eg flights) and commercial accommodation (eg hotel or self-catering apartment). Other elements, such as meals or excursions, are not essential to the definition of an inclusive tour. The term ‘all-inclusive’ is used to describe a special type of resort holiday in which food, drink, excursions and other services are provided as part of the total holiday cost.
  • An independent holiday is one in which the traveller organises and books transport and accommodation from separate sources (eg a Channel ferry crossing and a caravan site in France).

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Domestic trips account for three quarters of the market
                • Figure 1: Total business travel market, domestic vs. short-haul vs. long-haul, by volume, 2007-12
              • Growth in the UK market has slowed
                • Figure 2: Total business travel market, by volume, 2008-18
              • Domestic market unaffected by economic stagnation
                • Overseas market volume has contracted 23% since 2008
                  • Market drivers
                    • Growth in business travel transactions slowed in 2012
                      • Figure 3: GTMC business travel transactions, 2008-12
                    • High fuel prices have failed to impact growth in the car segment
                      • Figure 4: Petrol and diesel pump prices, pence per litre, January 2011-July 2013
                    • Jet fuel prices remain inflated, up 63% against 2009
                      • Figure 5: Jet fuel prices, GBP per gallon, Jun 2008-Jun 2013
                    • Rail fare increases continue to outpace RPI
                      • Pound strengthens against key business travel destination currencies
                        • Market share and segmentation
                          • UK residents took 15% more business trips by tunnel in 2012
                            • Figure 6: Overseas business travel market, by transport method, by volume, 2007-12
                          • France and Germany hold a combined 26% share of the overseas market
                            • Figure 7: Top ten overseas business travel destinations, by volume, 2011-12
                          • The consumer
                            • Domestic business trip penetration doubles that of overseas
                              • Figure 8: Business trips taken in the last 12 months, April 2013
                            • Incentives have failed to persuade people to opt for first class rail travel
                              • Just 27% of business travellers are fully reimbursed for business trips
                                • Figure 9: Company approaches to business travel, April 2013
                              • Some 29% of business travellers use hotel internet, 13% use a mobile dongle
                                • Figure 10: Experiences of business travel, April 2013
                              • 31% of business travellers would prefer to choose their own transport
                                • Figure 11: Attitudes towards business travel, April 2013
                              • What we think
                              • Issues in the Market

                                  • How can the industry tempt people away from using their own cars?
                                    • How can brands cater to demands to extend business trips for leisure?
                                      • What does the shift away from premium travel mean for the industry?
                                        • How will Deutsche Bahn’s cross-Channel venture affect the market?
                                        • Trend Application

                                            • Slow It All Down
                                              • Decline of Deference
                                                • Mintel Futures: Human
                                                • Market Drivers

                                                  • Key points
                                                    • Growth in business travel transactions slowed in 2012
                                                      • Figure 12: GTMC business travel transactions, 2008-12
                                                    • High fuel prices have failed to impact growth in the car segment
                                                      • Figure 13: Petrol and diesel pump prices, pence per litre, January 2011-July 2013
                                                    • Jet fuel prices remain inflated, up 63% against 2009
                                                      • Figure 14: Jet fuel prices, GBP per gallon, May 2008-May 2013
                                                    • APD rises further dampen demand for premium air travel
                                                      • Figure 15: Air Passenger Duty, April 2012, April 2013 and April 2014
                                                    • Rail fare increases continue to outpace RPI
                                                      • Figure 16: Average change in rail fares, 2004-12
                                                    • Deutsche Bahn is set reshape the cross-Channel market
                                                      • EU Roaming Regulation lowers the price cap for mobile data roaming
                                                        • Pound strengthens against key business travel destination currencies
                                                          • Figure 17: Foreign exchange rate index, GBP against selected business destination currencies, Jan 2012-Jun 2013
                                                        • Business trips to China lag far behind its value as a UK trade partner
                                                          • Figure 18: The UK’s top ten trade partners in 2012
                                                      • Who’s Innovating?

                                                        • Key points
                                                          • Billion Books Baby asks travellers to donate spare baggage space
                                                            • Globalgig extends international data roaming service
                                                              • Klout users get access to American Airlines lounges
                                                                • Intercontinental offers reward programme members free internet
                                                                • Market Size and Forecast

                                                                  • Key points
                                                                    • Domestic trips hold a 73% share of the total business travel market
                                                                      • Figure 19: Total business travel market, domestic vs. overseas, by volume, 2008-13
                                                                    • Total market
                                                                      • Growth in the UK business travel market has slowed
                                                                        • Figure 20: Total business travel market, by volume and value, 2008-18
                                                                      • 2013 will see market value recover to pre-recession levels
                                                                        • Forecast
                                                                          • Figure 21: Total business travel market, by volume, 2008-18
                                                                          • Figure 22: Total business travel market, by value, 2008-18
                                                                        • Domestic market
                                                                          • The domestic market has been unaffected by economic stagnation
                                                                            • Figure 23: Domestic business travel market, by volume and value, 2008-18
                                                                          • Forecast
                                                                            • Figure 24: Domestic business travel market, by volume, 2008-18
                                                                            • Figure 25: Domestic business travel market, by value, 2008-18
                                                                          • Overseas market
                                                                            • Overseas market volume has contracted 23% since 2008
                                                                              • Figure 26: Overseas business travel market, by volume and value, 2008-18
                                                                            • Forecast
                                                                              • Figure 27: Overseas business travel market, by volume, 2008-18
                                                                              • Figure 28: Overseas business travel market, by value, 2008-18
                                                                            • Forecast methodology
                                                                            • Segment Performance

                                                                              • Key points
                                                                                • Short-haul segment grew 4.2% in 2012 while long-haul contracted 6.4%
                                                                                  • Figure 29: Overseas business travel market, long-haul vs. short-haul, by volume, 2002-12
                                                                                • UK residents took 15% more business trips by tunnel in 2012
                                                                                  • Figure 30: Overseas business travel market, by transport method, by volume, 2002-12
                                                                                • The tunnel holds a majority share of trips to France and Belgium
                                                                                  • Figure 31: Selected overseas business travel destinations, by transport method, by volume, 2011-12
                                                                              • Market Share

                                                                                • Key points
                                                                                  • France and Germany hold a combined 26% share of the overseas market
                                                                                    • Figure 32: Top ten overseas business travel destinations, by volume, 2011-12
                                                                                  • Germany was the best performing business travel destination in 2012
                                                                                    • Figure 33: Best and worst performing overseas business travel destinations, by volume change, 2011-12
                                                                                  • Transatlantic trade deal could reverse the US market’s downward trend
                                                                                  • Companies and Products

                                                                                      • American Express Global Business Travel (Amex BT)
                                                                                          • Figure 34: Key financials of American Express Ltd. for the year ended 31 December 2012
                                                                                        • Carlson Wagonlit Travel (CWT)
                                                                                            • Figure 35: Key financials of Carlson Wagonlit UK Ltd for the year ended 31 December 2011
                                                                                          • Hogg Robinson Group
                                                                                              • Figure 36: Key financials of Hogg Robinson Group for the year ended 31 March 2013
                                                                                            • ATPI
                                                                                              • Figure 37: Key financials of ATPI Ltd for the year ended 31 December 2011
                                                                                            • BCD Travel
                                                                                                • Figure 38: Key financials of BCD Travel UK Ltd for the year ended 31 December 2012
                                                                                              • Capita Business Travel
                                                                                                  • Figure 39: Key financials of Capita Business Travel Ltd for the year ended 31 December 2011
                                                                                                  • Figure 40: Key financials of Expotel Hotel Reservations Ltd for the year ended 31 October 2011
                                                                                                • Egencia
                                                                                                    • Figure 41: Key financials of Egencia UK Ltd for the year ended 31 December 2011
                                                                                                  • FCm Travel Solutions
                                                                                                      • Figure 42: Key financials of Flight Centre UK Ltd for the year ended 30 June 2012
                                                                                                    • Portman Travel
                                                                                                        • Figure 43: Key financials of Portman Travel Ltd for the year ended 31 December 2011
                                                                                                    • Business Trips Taken in the Last 12 Months

                                                                                                      • Key points
                                                                                                        • Domestic business trip penetration doubles that of overseas
                                                                                                          • Figure 44: Business trips taken in the last 12 months, April 2013
                                                                                                        • Men dominate the business travel market
                                                                                                          • Figure 45: Business trips taken in the last 12 months, by gender, April 2013
                                                                                                        • Under-35s are a key demographic for the business travel market
                                                                                                          • Figure 46: Business trips taken in the last 12 months, by age, April 2013
                                                                                                      • Modes of Travel Used

                                                                                                        • Key points
                                                                                                          • Incentives have failed to persuade people to opt for first class rail travel
                                                                                                            • Figure 47: Modes of travel used, April 2013
                                                                                                          • Air travel penetration for domestic business trips is low
                                                                                                            • Figure 48: Modes of travel used, by business trips taken in the last 12 months, April 2013
                                                                                                        • Company Approaches to Business Travel

                                                                                                          • Key points
                                                                                                            • Just 27% of business travellers are fully reimbursed for business trips
                                                                                                              • Figure 49: Company approaches to business travel, April 2013
                                                                                                            • Cost-cutting is blurring the line between business and consumer travel
                                                                                                              • Environmental and fiscal concerns have served to dampen demand…
                                                                                                                • … but cutbacks have failed to stall overall growth
                                                                                                                  • Figure 50: Company approaches to business travel, by business trips taken in the last 12 months, April 2013
                                                                                                                • Fully reimbursed business travellers are more likely to travel by car
                                                                                                                  • Figure 51: Modes of travel used, by company approaches to business travel, April 2013
                                                                                                              • Experiences of Business Travel

                                                                                                                • Key points
                                                                                                                  • 29% of business travellers use hotel internet, 13% use a mobile dongle
                                                                                                                    • Figure 52: Experiences of business travel, April 2013
                                                                                                                  • Demand for connectivity is highest among overseas travellers
                                                                                                                    • Figure 53: Experiences of business travel, by business trips taken in the last 12 months, April 2013
                                                                                                                • Attitudes towards Business Travel

                                                                                                                  • Key points
                                                                                                                    • 31% of business travellers would prefer to choose their own transport
                                                                                                                      • Figure 54: Attitudes towards business travel, April 2013
                                                                                                                    • A third of non-parents view business trips as a welcome change
                                                                                                                      • Figure 55: Attitudes towards business travel, by presence of children in the home, April 2013
                                                                                                                    • 36% of overseas travellers want to extend business trips for leisure…
                                                                                                                      • Figure 56: Attitudes towards business travel, by business trips taken in the last 12 months, April 2013
                                                                                                                    • … but just a quarter of employers have accommodated this demand
                                                                                                                      • Figure 57: Experiences of business travel, by attitudes towards business travel, April 2013
                                                                                                                  • Appendix – Business Trips Taken in the Last 12 Months

                                                                                                                      • Figure 58: Business trips taken in the last 12 months, April 2013
                                                                                                                      • Figure 59: Business trips taken in the last 12 months, by demographics, April 2013
                                                                                                                      • Figure 60: Business trips taken in the last 12 months, by demographics, April 2013 (continued)
                                                                                                                      • Figure 61: Business trips taken in the last 12 months, by demographic, April 2013 (continued)
                                                                                                                  • Appendix – Modes of Travel Used

                                                                                                                      • Figure 62: Modes of travel used, April 2013
                                                                                                                      • Figure 63: Modes of travel used, by business trips taken in the last 12 months, April 2013
                                                                                                                      • Figure 64: Modes of travel used, by demographics, April 2013
                                                                                                                      • Figure 65: Most popular modes of travel used, by demographics April 2013 (continued)
                                                                                                                      • Figure 66: Modes of travel used, by demographics, April 2013 (continued)
                                                                                                                  • Appendix – Company Approaches to Business Travel

                                                                                                                      • Figure 67: Company approaches to business travel, April 2013
                                                                                                                      • Figure 68: Modes of travel used, by company approaches to business travel, April 2013
                                                                                                                      • Figure 69: Company approaches to business travel, by demographics, April 2013
                                                                                                                      • Figure 70: Popular company approaches to business travel, by demographics April 2013 (continued)
                                                                                                                      • Figure 71: Company approaches to business travel, by demographics, April 2013 (continued)
                                                                                                                  • Appendix – Experiences of Business Travel

                                                                                                                      • Figure 72: Experiences of business travel, April 2013
                                                                                                                      • Figure 73: Experiences of business travel, by business trips taken in the last 12 months, April 2013
                                                                                                                      • Figure 74: Experiences of business travel, by demographics, April 2013
                                                                                                                      • Figure 75: Experiences of business travel, by demographics, April 2013, (continued)
                                                                                                                  • Appendix – Attitudes towards Business Travel

                                                                                                                      • Figure 76: Attitudes towards business travel, April 2013
                                                                                                                      • Figure 77: Attitudes towards business travel, by business trips taken in the last 12 months, April 2013
                                                                                                                      • Figure 78: Attitudes towards business travel, by company approaches to business travel, April 2013
                                                                                                                      • Figure 79: Experiences of business travel, by attitudes towards business travel, April 2013
                                                                                                                      • Figure 80: Attitudes towards business travel, by demographics, April 2013
                                                                                                                      • Figure 81: Attitudes towards business travel, by demographics, April 2013 (continued)

                                                                                                                  Companies Covered

                                                                                                                  • A. S. Watson UK
                                                                                                                  • Accor
                                                                                                                  • American Express UK
                                                                                                                  • Aristocrat Leisure
                                                                                                                  • Aviva Plc
                                                                                                                  • BCD Travel
                                                                                                                  • Best Western International Inc.
                                                                                                                  • Britannia Hotels Ltd
                                                                                                                  • Capita Business Travel
                                                                                                                  • Carillion plc
                                                                                                                  • Carlson Wagonlit Travel, Inc.
                                                                                                                  • Cox & Robinson (Chemists) Ltd
                                                                                                                  • Expedia.co.uk
                                                                                                                  • Expotel
                                                                                                                  • FCm Travel Solutions UK
                                                                                                                  • Flight Centre (UK) Ltd
                                                                                                                  • Foreign and Commonwealth Office [FCO]
                                                                                                                  • GlaxoSmithKline Plc
                                                                                                                  • Hilton Group plc
                                                                                                                  • HRG
                                                                                                                  • InterContinental Hotels Group PLC
                                                                                                                  • Novartis Consumer Health UK Ltd
                                                                                                                  • Portman Travel
                                                                                                                  • Procter & Gamble UK & Ireland
                                                                                                                  • Radisson Hotels & Resorts
                                                                                                                  • Research in Motion Uk Ltd.
                                                                                                                  • Reuters Group PLC
                                                                                                                  • T-Mobile (UK) Ltd
                                                                                                                  • The Capita Group plc
                                                                                                                  • Travelport
                                                                                                                  • TripAdvisor LLC

                                                                                                                  Business Traveller - UK - August 2013

                                                                                                                  £1,995.00 (Excl.Tax)