Abstract
The UK business travel sector has enjoyed a buoyant period of growth since 2003. Sound economic fundamentals, strong exports performance, and an increasing number of UK enterprises have provided highly favourable demand-side conditions.
Volume trends in domestic business travel within the UK have registered consistent, if unspectacular, progress, but the picture in overseas travel has much more dynamic. Here, volumes have accelerated rapidly, driven in the main by traffic growth to Rest of World destinations, particularly the emerging economies of Asia Pacific.
In the past year, however, a convergence of the fallout from the sub-prime crisis, rising oil and energy prices, and the highest domestic inflation for several years means that corporate UK is facing a marked downturn in trading performance. IPS data is now showing some significant declines in activity during the last final quarter of 2007, continuing into 2008.
The cost of business travel has increased dramatically with the rise in fuel prices and the much-vaunted Business-only sector is now pretty much history, as Eos, Maxjet, and Silverjet struggled to make the model work. Most recently, in August 2008, British Airways announced an 88% fall in pre-tax profits for the three months to June, against what its CEO, Willie Walsh, described as ‘the worst trading environment the industry has ever faced' .
There is plenty of evidence that businesses are introducing cost-saving travel measures, using no-frills carriers and budget hotel chains.
Key report themes:
Against the backdrop of a trading picture not witnessed since the early 1990s, this report provides a wide-ranging analysis of:
- The current domestic and outbound business travel environment
- How business travellers are booking their travel
- The growth in self-booked trips
- Whether belt-tightening is a genuine phenomenon in terms of budget options/expenses etc
- Whether technological/communication developments further threaten meetings
- The prospects for incentive travel
- Whether business travel is leading the way in green initiatives, and
- The prospects for a growth in domestic and international rail travel.
Table of Contents
- Issues in the Market
- Key issues
- Definitions
- Abbreviations
- Market in Brief
- Domestic: Business generates 1 in 5 travel pounds
- Overseas business travel heads east
- Start me up
- Changing economic climate
- Business goes budget in response
- The Big 3 TMCs
- Fast tracks and networking
- Online, on tracks and involved
- Business and pleasure
- Internal Market Environment
- Key points
- Sizing the business traveller population
- Figure 1: Transport and accommodation usage, 2003-07
- Transaction volumes
- Figure 2: GTMC members' transactions in millions, 2007
- Travel budgets under extreme pressure
- Supply side woes
- Business goes no-frills
- Alternatives to travel
- Rise of the online travel agent
- Legislative change
- Broader Market Environment
- Key points
- Falling GDP
- Figure 3: GDP at 2008 prices in £ billion, 1997-2008
- The relationship with GDP
- Figure 4: Indexed trends for overseas business travel and GDP, 2000-07
(year 2000 = 100)
- The relationship with overseas trade
- Figure 5: UK export performance (£ billions), 2003-07
- Figure 6: UK Top 10 export markets, 2003 and 2007
- British enterprise
- Figure 7: Key enterprise indicators, 2001-06
- The consumer economy
- Figure 8: Trends in personal disposable income (PDI) and consumer
expenditure, 2003-13
- Competitive Context
- Key points
- Figure 9: Overseas and domestic travel volumes and expenditure, by
purpose, 2007
- Domestic travel
- Figure 10: Domestic travel volumes (millions), by purpose of travel,
2003-07
- Overseas travel
- Figure 11: Overseas travel volumes (millions) by purpose of travel,
2003-07
- Figure 12: Overseas travel expenditure (£ millions) by purpose of
travel, 2003-07
- Strengths and Weaknesses in the Market
- Strengths
- Weaknesses
- Market Size and Forecast
- Key points
- Business travel volume analysis
- Figure 13: Business travel market size by volume, 2001-13
- Business travel expenditure analysis
- Figure 14: Business travel market size by value, 2001-13, at current
prices
- Figure 15: Business travel market size by value, 2003-13, at constant
2008 prices
- Factors used in the forecast
- Market Segmentation
- Key points
- Overseas business travel by main destination area
- Figure 16: Overseas business travel volume trips (millions) by
destination area, 2003-07
- Figure 17: Overseas business travel, expenditure (£ millions) by
destination area, 2003-07
- Figure 18: Overseas business travel, volume, expenditure and average
trip expenditure trends, 2003-07
- Main sources of growth
- Figure 19: Overseas business travel, contribution to five-year growth by
destination area, 2003-07
- Mode of transport
- Figure 20: Overseas business travel volumes (thousands), by type of
travel, 2003-07
- Figure 21: European business travel volumes (millions) by type of
travel, 2003-07
- A period of considerable uncertainty
- Figure 22: Year on year quarterly business travel volume trends, 2007
and 2008
- Market Share
- Key point
- Figure 23: Top ten TMCs in the UK, by turnover, 2007
- Companies and Products
- Key points
- American Express Business Travel
- BCD Travel
- Carlson Wagonlit Travel (CWT)
- Expedia Corporate Travel (Egencia)
- FCm Travel Solutions
- Hogg Robinson Group plc
- Kayak
- Portman Travel/Radius Network
- Travelocity Business
- The Consumer: Business Trips
- Key points
- Figure 24: Business trips taken in the past 12 months, April 2008
- Day trippers
- Let' s stay over
- Can conferences be rewarding?
- The Consumer: Business Transport
- Key points
- Figure 25: Transport used for business trips taken in the past 12
months, April 2008
- Tyre hire
- Rail travel
- Twin peaks and conference carriages
- Budget briefcases
- The Consumer: Travel Priorities
- Key points
- Figure 26: Most important factors for business trips, April 2008
- Figure 27: Average priority scores, September 2006-April 2008
- Priorities by demographics
- Figure 28: Most important factors (punctuality, comfort, value) and
their main demographic characteristics, April 2008
- The Consumer: Booking Methods
- Key points
- Figure 29: Booking methods for business trips taken in the past 12
months, April 2008
- Online opportunists
- Business direct
- Business and pleasure agents
- Appendix -- The Consumer: Business Trips
- Figure 37: UK business trips taken in the past 12 months, by
demographic, April 2008
- Figure 38: Business trips taken abroad in the past 12 months, by
demographic, April 2008
- Appendix -- The Consumer: Business Transport
- Figure 39: Most popular transport used for business trips taken in the
past 12 months, by demographic, April 2008
- Figure 40: Transport used for business trips taken in the past 12
months, by demographic, April 2008
- Appendix -- The Consumer: Travel Priorities
- Figure 41: Most important factors for business trips, by demographic,
April 2008
- Appendix -- The Consumer: Booking Methods
- Figure 42: Booking methods for business trips taken in the past 12
months, by demographic, April 2008
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