Table of Contents
Introduction
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- Employee mobility
- High-growth firms spend more
Data Sources
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- Abbreviations
Summary of Key Points
Overview
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- Demographic trends
- Economy
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- Figure 1: Worldwide economic growth rate, 2006-09*
- Inflation is back
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- Figure 2: Consumer prices, 2006-09*
- Commodity prices
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- Figure 3: Commodity prices, 2006-09*
- Trade to slow down
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- Figure 4: World trade volume – goods and services, 2006-09*
- Business travel spending
- Spending by world region
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- Figure 5: Business travel expenditure* worldwide and by region, 2008-18
- Spending by major country
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- Figure 6: The biggest spenders on business travel, 2008 and 2018
- The fastest growers
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- Figure 7: Countries with the fastest growth in business travel expenditure, 2008-18
Business Travel Transport
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- Air
- Airfares are going up
- Capacity cuts coming worldwide
- Capacity reductions a necessity for the US
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- Figure 8: Fuel cost impact on jobs, fares and capacity, 2008
- Coming reductions in regional service
- Cutbacks planned for autumn 2008 and beyond
- Smaller US cities could be left out in the cold
- Reversal was anticipated by the manufacturers
- A cost comparison
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- Figure 9: Impact of rising fuel costs on regional jets, 2007-08
- Non-US airlines also cutting capacity
- Alitalia on the brink
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- Figure 10: Top ten airlines at Malpensa, 2007-08
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- Figure 11: A geographical analysis of routes abandoned by Alitalia in 2008
- BA and Iberia to cut capacity
- Less choice in future
- Trends in ‘premium’ air travel
- Growth in premium tickets at a standstill
- A drop of 6% in North America
- A mixed picture in Europe
- Africa booming
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- Figure 12: Premium traffic share and growth by route Q1 2007 versus Q2, 2007-08
- Corporate aviation
- Worldwide demand and supply trends
- Record high deliveries in 2007
- Technological development driving demand
- Embraer enters the corporate jet market
- Lufthansa to offer business jet service
- Other carriers are considering a move
- Multiple options
- Fractional ownership
- Cost of flights skyrocketing
- The chartering option
- Very light jets
- NASA
- Concentration of traffic in a few airports
- VLJs service to replace car travel?
- DayJet’s debut
- Other operators
- A competitive business model?
- DayJet scale-back
- Blink
- JetBird
- Bikkair
- Helicopters in demand
- PremiAir
- Sikorsky
- Bell
- Air travel in general losing popularity
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- Figure 13: Responses to the question, “Which two/three of these words come to mind when thinking of travelling by air, including airport experience?”, May 2008
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- Figure 14: Responses to the question, “Is this one of the best things about travelling, a very good thing, a somewhat good thing, a somewhat bad thing, a very bad thing, or one of the worst things about travel?”, May 2008
- Flight cancellations surprisingly common
- Problems seen as worsening
- Deteriorating customer service
- In-flight amenities
- Loyalty and price
- Remote luggage check-in
- Reduced queues
- Airports
- Transport links
- Upgraded airport parking
- New Terminal 5 car park
- Airport retailing and food & beverage goes upmarket
- Dissatisfaction on the rise
- Security concerns
- Registered passenger schemes
- Privium Club
- CANPASS Air
- The UK’s Project IRIS
- The US’ Registered Traveller (RT) programme
- Participating sponsoring entities
- RT rules relaxed
- Clear
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- Figure 15: Cost of Clear membership, 2008*
- Online registration
- Check-in by mobile phone
- Finnair
- Japan Airlines
- All Nippon Airways
- Air Canada
- Spanair's link with Vodafone
- Creating an industry standard
- Car rental
- Consolidation in the US
- Airport market shares
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- Figure 16: Hertz’ estimate of on-airport marketshare in the US
- Corporate customers react to economic downturn
- Dollar Thrifty increasing its share
- Rental costs are trending up
- Avis/Budget and Hertz to increase off-airport presence
- Customer satisfaction with renting cars
- Enterprise leads the pack
- Long waiting times
- E-vouchers
- Enhancing compliance
- Amadeus and National first off the mark
- Others have followed suit
- Avoiding GDS altogether
- Rail
- Railteam
- High-speed rails for the UK?
- A strategic review to be undertaken
- Commuter trains
- Capital spending restricted
- Rail travel growing in the US
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- Figure 17: The top ten busiest station in the fiscal year ended 30 September 2007
Business Travel Accommodation
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- Different types of business hotels
- Airport hotels
- Stable occupancy
- Airport hotels are moving upmarket
- Conference centres
- The fastest-growing hospitality segment
- The International Association of Conference Centers (IACC)
- Dolce conference centres
- Convention hotels
- Public funding often necessary
- Suite hotels
- Business travellers’ hotel ratings
- Luxury
- Upscale
- JW Marriott rated second in luxury survey
- JW Marriott rated highly for MICE amenities
- Midscale
- A fast-growing segment
- Extended stay
- Strong performance in 2007
- Upscale capacity expanded by 8% in 2007
- Trends in hotel costs
- Occupancies declining
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- Figure 18: Hotel performance worldwide, Q1 2008 vs Q1 2007
- Relative hotel costs
- Chinese cities not on the list
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- Figure 19: Hotel costs in the 50 most expensive cities outside the US, 2008
- US hotel costs
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- Figure 20: Hotel costs in the 50 most expensive US cities
- Business travellers driven ‘up the wall’ by extra charges
- Extra charges are only 6% of revenue
- A survey of 20 hotels
- Hotel service trends
- Expensive hotel charge for Internet access
- Complementary breakfasts are declining
- Vegetarian and ‘healthy’ menus on the rise
- Late cancellation fees increasingly common
- Frequent guests want to be ‘inspired’
- A 24-hour shipping service
Business Travel Distribution
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- Corporate travel agents can save money
- Value-added services
- Carlson Wagonlit Launches Agency+Card Reporting
- Longer-term challenges
- Flight booking channels
- Agents can save money on flights
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- Figure 21: Comparison of airfares paid by reservation channel for US companies, 2001-07
- Figure 22: Comparison of airfares paid by reservation channel for US companies by air travel spend, 2001-07
- Corporate travel agents
- Carlson Wagonlit Travel
- CWT overtakes Amex
- American Express
- BCD
- BCD buys into HRG
- BCD’s African expansion
- Hogg Robinson Group
- Online travel agents
- Expedia Corporate Travel becomes Egencia
- Orbitz for Business
- Global Distribution Systems
- Travelport
- Amadeus
- Sabre
- Corporate travel management
- Case study: Eastman Kodak
- Case study: Novartis
- Global air bid
- Travel management a growing trend in China
- Preventing ‘rate squatting’
- The risk to travel programmes
- Measures to protect against squatting
- Rate loading and auditing
- Travel-related loyalty programmes
- Airlines
- Double jeopardy
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- Figure 23: Purchase data from 23 airlines serving US airports, 2002-04
- Market penetration more important than purchase frequency
- Hotel chain loyalty schemes
- Costly necessity or dynamic marketing tool
- Not as effective as airline frequent-flyer schemes
- Guest loyalty – a zero-sum game?
- Frequent travellers belong to more than three loyalty schemes
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- Figure 24: Breakdown of US hotel guests by travel frequency and overnights generated per segment, 2005
- Figure 25: Number of loyalty scheme memberships for frequent travellers, 2004
- Loyalty versus rewards
- Hotel chains should target profitable guests, not just frequently staying ones
- Potential value as well as current value should be considered
- The risk of cannibalisation
- Costs can be high and unpredictable
- Hotel loyalty schemes must offer real value to members, especially air miles
- Onsite benefits are of little value
- Should the chains charge a fee?
Meetings, Incentives, Conferences and Exhibitions
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- Vulnerable to an economic downturn
- A cyclical peak?
- The FutureWatch 2008 study
- Meeting planner concerns
- Budgets
- Economy
- Environment
- Organisational issues
- Labour shortages
- Use of technology
- Incentive travel
- US companies spent US$13.4 billion
- 23% of large companies use travel incentives
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- Figure 26: Breakdown of incentive travel expenditure in the US by type, 2006
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- Figure 27: Most popular destinations cited by SITE members, 2007
- Conferences/conventions
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- Figure 28: ICCA country and city ranking measured by no of meetings organised in 2007
- MICE – the last travel management frontier
- Specialised agencies still favoured
- Greater transparency needed
- Videoconferencing
- Technology drives growth in North America
- Cisco’s TelePresence
- Hurdles still to be overcome
- Videoconferencing in Germany
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- Figure 29: Use of videoconferencing by German companies, 2007
- Will it cut growth in business travel?
- Almost half to reduce travel
- Major companies embrace videoconferencing
- Credit Suisse
- Cisco
- Hewlett-Packard
Business Travel by Selected Country
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- Australia
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- Figure 30: Expenditure on business travel and tourism in Australia, 2006-2018
- Incoming business arrivals
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- Figure 31: Business arrivals and overnights in Australia, 2004-08
- Figure 32: Proportion of incoming tourists travelling for a business purpose by major source market, year ended June 2007
- Domestic business travel
- Outbound business travel
- Brazil
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- Figure 33: Expenditure on business travel and tourism in Brazil, 2006-18
- Incoming business arrivals
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- Figure 34: Incoming business arrivals, 2002-06
- Figure 35: % of business arrivals by mode of transport, 2004-05
- Canada
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- Figure 36: Expenditure on business travel and tourism in Canada, 2006-18
- Incoming business arrivals
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- Figure 37: Incoming business arrivals, 2002-06
- Trend in business travel costs
- Airfares
- Hotels
- Car rentals
- Travel policy
- China
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- Figure 38: Expenditure on business travel and tourism in China, 2006-18
- Figure 39: Incoming business arrivals, 2003-06
- China now third ranked
- More than half did not increase T&E expenditure
- Amex had 41% growth
- Visas causing headaches
- France
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- Figure 40: Expenditure on business travel and tourism in France, 2006-18
- Incoming business arrivals
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- Figure 41: Incoming business arrivals, 2005-06
- Motives for business travel
- SMEs versus large companies
- Breakdown of business T&E costs
- High spending on rail
- Spending on hotels declining
- Two thirds of companies have rules for business travel
- Increased regulation of transport costs
- No increase in regulation of hotel stays
- Medium-sized companies have tightened up the rules
- Why some companies do not have policies
- Security a rising concern
- Companies well equipped for controlling travel expenditure
- Optimising T&E expenditure
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- Figure 42: Methods used to optimise T&E budgets, 2006
- Increased use of Internet
- Advantages of using the Internet
- Increasing use of OTAs
- Most companies work with one travel agency
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- Figure 43: Number of travel agencies used by French companies, 2006
- Agency selection criteria
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- Figure 44: Criteria used for choosing a travel agency (% using criteria by size of travel budget), 2006
- Agency remuneration
- Additional services
- Greater satisfaction with travel agencies
- Respect for the environment
- Germany
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- Figure 45: Expenditure on business travel and tourism in Germany, 2006-18
- Incoming business arrivals
- SMEs are driving growth in business travel
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- Figure 46: Trend in German business trips, 2003-06
- Importance of business travel for Germany
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- Figure 47: A comparison of business and leisure travel expenditure in Germany, 2002-06
- Business travel expenditure slowly recovering
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- Figure 48: Trend in German business travel expenditure, 2003-06
- Breakdown of business travel costs
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- Figure 49: Total costs of business travel broken down by cost areas in 2005-06
- Outlook for hotel overnights
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- Figure 50: Reasons for more overnight stays by business travellers in 2008
- The importance of business travel and MICE
- The role of corporate travel managers
- Security a growing responsibility
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- Figure 51: Additional areas of responsibility for travel managers*, 2005-07
- Contract negotiations with suppliers
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- Figure 52: Negotiations and daily rates for hotels, flights, rail and hired cars, 2007
- Destination trends for German business travellers
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- Figure 53: German and foreign cities that will take on greater significance for business travel in 2008
- Italy
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- Figure 54: Expenditure on business travel and tourism in Italy, 2006-18
- Incoming business arrivals
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- Figure 55: Incoming business traveller arrivals in Italy, 2004-08
- Figure 56: Incoming business traveller overnights in Italy, 2004-08
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- Figure 57: Incoming business traveller expenditure, 2004-08
- By destination region
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- Figure 58: Incoming business arrivals, overnights, expenditure by region in Italy, 2006-07
- By source market
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- Figure 59: Incoming business arrivals, overnights and expenditure by source market, 2006-07
- National business travel
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- Figure 60: Italian business trips and overnights, 2005-07
- MICE
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- Figure 61: Italian business travel by type, 2007
- Travel characteristics
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- Figure 62: Booking channel used by Italian business travellers, 2006-07
- Figure 63: Type of transport used by Italian business travellers, 2006-07
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- Figure 64: Type of lodging used by Italian business travellers, 2006-07
- Figure 65: Breakdown by destination region of Italian business trips, 2007
- Outbound business travel
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- Figure 66: Outbound business trips, 2004-08
- Figure 67: Outbound business overnights, 2004-08
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- Figure 68: Outbound business expenditure, 2004-08
- Figure 69: Outbound business trips, overnights and expenditure by destination region /country, 2006-07
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- Figure 70: Outbound business trips, overnights, expenditure by regional source market in Italy, 2006-07
- Japan
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- Figure 71: Expenditure on business travel and tourism in Japan, 2006-18
- Incoming business arrivals
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- Figure 72: Incoming business travel, 2000-07
- Outbound business travel
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- Figure 73: Japanese outbound business arrivals as a % of total by region/country, 2006
- Travel to China heavily weighted towards business
- Open skies agreement with Korea
- Demographics
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- Figure 74: Japanese outbound business arrivals as a % of total by demographic profile, 2006 Part 1
- Figure 75: Japanese outbound business arrivals as a % of total by demographic profile, 2006 Part 2
- Korea
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- Figure 76: Expenditure on business travel and tourism in Korea, 2006-18
- Incoming business arrivals
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- Figure 77: Incoming business arrivals, 2002-06
- Russia
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- Figure 78: Expenditure on business travel and tourism in Russia, 2006-18
- Incoming business arrivals
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- Figure 79: Incoming business arrivals, 2002-06
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- Figure 80: Incoming tourist arrivals by purpose, 2000-07
- South Africa
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- Figure 81: Expenditure on business travel and tourism in South Africa, 2006-18
- Incoming business arrivals
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- Figure 82: Incoming business arrivals, 2002-06
- Spain
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- Figure 83: Expenditure on business travel and tourism in Spain, 2006-18
- Incoming business arrivals
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- Figure 84: Incoming business arrivals, 2003-07
- Domestic and outbound business travel
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- Figure 85: Spanish business trips by destination region, 2006
- Sweden
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- Figure 86: Expenditure on business travel and tourism in Sweden, 2006-18
- Domestic business travel
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- Figure 87: Destination, type of domestic business trips and means of transport, 2007
- Outbound business travel
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- Figure 88: Destination, type of outbound business trips and means of transport, 2007
- Switzerland
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- Figure 89: Expenditure on business travel and tourism in Switzerland, 2006-18
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- Figure 90: Profile of Swiss business travellers, 2005
- UAE
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- Figure 91: Expenditure on business travel and tourism in the UAE, 2006-18
- Dubai
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- Figure 92: Breakdown of incoming business travel to Dubai by segment, 2006-07
- Business meetings
- MICE characteristics
- Business/leisure activities
- Business visitor expenditure
- Air and ship crew segment
- Business conference segment
- Business exhibition segment
- Business FIT segment
- Business incentives segment
- Business meeting segment
- UK
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- Figure 93: Expenditure on business travel and tourism in the UK, 2006-18
- Incoming business arrivals
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- Figure 94: Incoming business arrivals, 2002-06
- MICE arrivals
- By segment
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- Figure 95: Segmentation of the incoming business traveller market, 2006
- By region
- Leading country markets
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- Figure 96: Incoming business arrivals by major region, 2002-06
- Leisure potential
- Domestic business travel
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- Figure 97: Domestic business arrivals, expenditure and length of stay in England by source market, 2006
- Domestic business expenditure breakdown
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- Figure 98: Breakdown of expenditure on domestic business trips in England, May-December 2005
- Outbound business travel
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- Figure 99: UK outbound business travel, 2002-06
- Figure 100: Top overseas destination regions for business travel, 2002-06
- Travel management companies
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- Figure 101: The top business TMCs in the UK by turnover, 2007
- Business event venues
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- Figure 102: Conference venue breakdown by type, 2006
- Figure 103: Breakdown of unusual or unique venues, 2006
- Market outlook
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- Figure 104: The UK business travel market size by value, 2001-11
- US
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- Figure 105: Expenditure on business travel and tourism in the US, 2006-18
- Incoming business arrivals
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- Figure 106: Incoming business arrivals, 2002-06
- Overseas business arrivals
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- Figure 107: Inbound overseas business traveller profile, 2007
- Figure 108: Inbound overseas business traveller booking profile, 2007
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- Figure 109: Inbound overseas business traveller travel party and travel purpose profile, 2007
- Domestic business travel
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- Figure 110: Total spending on US domestic business travel, at current and constant prices, 2002-07
- Figure 111: Breakdown of US domestic business travel expenditure, 2004-06
- Outbound overseas business travel
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- Figure 112: Outbound overseas business travellers – by demographic profile and travel purpose, 2007
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- Figure 113: Outbound overseas business traveller profile – travel frequency, overnights & destination, 2007
- The typical lodging customer
What Next?
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- Vulnerability to cyclical economic slowdown
- An overly optimistic outlook?
- Reducing costs the main goal
- It’s not only about cost-cutting
- Outlook for costs
- Air travel
- Hotels
- Car rental
- Rail
- Combining business with pleasure
Index to TTI Destination Reports
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- Country reports
Index to Travel & Tourism Analyst
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- Index grouped by geographic area
Special Reports Index
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