Table of Contents
Introduction
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- Key findings
Data Sources
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- Abbreviations
Overview
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- Ageing of the population
- Demographic implications
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- 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
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- 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
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- 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
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- Figure 5: Exchange rate forecast, US$ against major currencies, July 2010
- The Euro has rebounded
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- Figure 6: Exchange rate forecast, Euro against major currencies, July 2010
- No further rebound in sight for the Pound
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- Figure 7: Exchange rate forecast, UK Pound against major currencies, July 2010
- The US Dollar to slide against most emerging market currencies
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- Figure 8: Exchange rate forecast, US Dollar against Eastern European and Latin American currencies, July 2010
- The Renminbi un-pegged
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- Figure 9: Exchange rate forecast, US Dollar against Asian currencies, July 2010
- Eastern European currencies stable against the Euro
- Estonia to adopt the Euro
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- Figure 10: Exchange rate forecast, Euro against Eastern European and Latin American currencies, July 2010
- A slightly weaker Euro against Asian currencies
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- Figure 11: Exchange rate forecast, Euro against Asian currencies, July 2010
- A similar outlook for the Yen
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- Figure 12: Exchange rate forecast, Japanese Yen against Asian currencies, July 2010
- Business travel spending
- Spending by world region
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- Figure 13: Business travel expenditure* worldwide and by region, 2010-20
- Spending by major country
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- Figure 14: The biggest spenders on business travel, 2008 and 2018
- Projections incorporate currency assumptions
Business Travel Transport
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- 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
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- 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
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- 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
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- Figure 17: Business Travel News' Annual Airline Survey – US airlines* rated by service attribute, 2009
- Rating criteria definitions
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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?
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- 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
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- 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
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- Figure 36: Volume of passenger rail traffic, by region, 2006-09
- The green alternative
- Japan ahead of the game
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- 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
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- 250,000 business hotels worldwide
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- 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
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- 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
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- 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
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- 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
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- 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
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- Figure 43: Change in volume and price of hotel reservations via GDS worldwide, 2010
- North American GDS data
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- Figure 44: Change in volume and price of hotel reservations via GDS in North America, 2010
- GDS data outside North America
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- 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
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- Figure 46: Ten most expensive cities in the world, first half 2010 vs first half 2009
- Trend in rates in key cities
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- Figure 47: Key global focus cities – ADRs, Q1 & Q2/2010 vs Q1 & Q2/2009
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- 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
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- Figure 49: Key UK focus cities – ADRs, first half 2010 vs first half 2009
- North American focus
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- 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
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- Figure 51: Average hotel rates as tracked by American Express Business Travel, 2008-10
Business Travel Management and Distribution
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- 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
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- Figure 52: Major stakes in HEG shares, 2010
- HRG’s client base
- New clients
- Expanded contracts
- Client business sectors
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- 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
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- Corporates and non-corporates
- Substantial differences between market segments
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- 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
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- 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
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- 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
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- 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
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- 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
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- 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
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- Figure 61: Comparison of web conferencing, videoconferencing and telepresence features, 2010
- Telepresence not more expensive on per-unit basis
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- 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
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- 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
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- 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
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- Figure 64: Issues covered in European corporate travel policies, 2007-08
- Germany
- Government up, private sector down
- Larger companies more resilient
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- Figure 65: Total business travel spending in Germany, 2005-09
- Shorter trips in 2009
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- Figure 66: Length of business trips in days, 2005-09
- Long-term decline in average cost per trip
- Travel managers can save money
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- 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
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- 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
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- Figure 70: Trend in airline booking class by type of flight, 2005 and 2009
- Overnight stays
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- Figure 71: Overnight stays by size of company, 2005-09
- Two thirds of overnights domestic
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- Figure 72: Number of overnight stays in Germany and abroad, 2008-09
- Decline in hotel spending
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- Figure 73: Turnover for overnight stays (room nights) by business travellers in Germany and abroad, 2007-09
- Trend in accommodation grade
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- Figure 74: Business travel accommodation, by grade, 2008-09
- Four- and five-star accommodation when abroad
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- Figure 75: Accommodation categories on business trips in Germany and abroad – business traveller overnights, 2009
- Public-sector travel
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- Figure 76: Ranking of foreign business destination countries, 2005/10
- Trade an important influence on German business travel
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- Figure 77: Germany’s leading trading partners, imports and exports, 2009
- Internal management of travel expenditure
- A need for certified travel managers?
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- Figure 78: Responsibility* for core business travel management tasks, 2004 and 2010
- Other tasks handled by travel managers
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- Figure 79: Further tasks* entrusted to travel managers, 2009-10
- Implications of VAT reduction on hotel nights
- Reaction of travel buyers
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- Figure 80: Measures* taken when purchasing overnight stays, in reaction to reduction in VAT, 2010
- Impact of economic crisis
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- Figure 81: Consequences of the financial crisis for business travel management*, 2009-10
- Measures taken
- 60% say changes will be permanent
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- Figure 82: Most important measures implemented in business travel since 2008
- Outlook for 2011
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- Figure 83: Estimated trend in overnight stays and various means of transport, 2011
- UK
- Domestic business travel
- Mostly one night only
- Some regional differences
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- Figure 84: Summary of UK domestic business travel, by region, 2009
- Outbound business travel has slumped
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- Figure 85: Outbound business trips from the UK, 2007-09
- Spending down by a bit less
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- Figure 86: Spending on outbound business travel from the UK, 2007-09
- Inbound business travel also took a tumble
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- Figure 87: Inbound business trips to the UK by regional source market, 2007-09
- Spending down by less
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- 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
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- 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
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- Figure 89: Environmental criteria* included in travel policies, 2009
- Cultural differences
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- Figure 90: Internal measures* taken to reduce environmental impact by European companies, by country/region, 2009
- Internal initiatives
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- Figure 91: Internal measures taken to reduce environmental impact, by European companies, 2009
What Next?
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- Global business travel forecast
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- Figure 92: Amex Global – forecast for travel prices by category, y-o-y change, 2010
- Forecasts by region
- North America
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- Figure 93: North America – forecast for travel prices by category, y-o-y change, 2010
- Europe
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- Figure 94: Europe – forecast for travel prices by category, y-o-y change, 2010
- Latin America
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- Figure 95: Latin America – forecast for travel prices, by category, y-o-y change, 2010
- Asia Pacific
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- 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
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- Figure 97: Current airline passenger duty and scheduled increases for 1 November 2010
- Germans move to tax air travel
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