European business travel barometer version anglaise 2012

1

EUROPEAN BUSINESS TRAVEL
BAROMETER 2012

Concomitance Group

November 2012
BAROMETRE EUROPEEN DU VOYAGE D’AFFAIRES
22nd edition – November 2012

Groupe Concomitance : Tel : +33 (0)1 78 16 52 30 or infobarometre@concomitance.com
This report is protected by copy right - any full or partial reproduction is subject to prior authorisation of Amex and
acknowledgment of Groupe Concomitance in its role in the preparation of this report

2

Contents

Executive summary .................................................................................................... 3
Methodology of the barometer .................................................................................. 4
Part 1: Economic trends and travel budget developments ..................................... 5
Economic trends: Eurozone recession in 2012, slow recovery expected in 2013 .............................. 5
Travel expenditure unchanged in Europe in 2012 despite the drop in GDP ....................................... 5
Moderate growth (+1%) in business travel expenditure in Europe, with a range of contrasting
situations ............................................................................................................................................. 6
The proportion of unchanged budgets has increased, giving rise to arbitrage .................................. 8
1/3 of the companies measure the return on investment and 1/4 consider that business travel
contributes to their development ....................................................................................................... 9
Most travel expenditure needs to be more tightly managed ........................................................... 10
Budget optimisation factors mainly affect direct costs .................................................................... 11
Travel policies are broadly implemented and cover all phases of trips ............................................ 12
Companies use TMCs for support ..................................................................................................... 13

Part 2: An increasingly complex value chain ......................................................... 14
A complex value chain, but still managed manually to a large extent.............................................. 14
Multiple and incomplete reporting sources...................................................................................... 16

Part 3: Security and mobility issues ....................................................................... 17
Traveller security is a key concern for companies ............................................................................ 17
Mobile solutions are becoming fully established.............................................................................. 17

Summary ................................................................................................................... 19
Company maturity is still closely linked to the size of their travel budget ....................................... 19

Part 5: 2013 Prospects ............................................................................................. 20
2013 prospects: more wait-and-see strategies, +0.5% growth forecast .......................................... 20
Key issues for 2013: development of international travel and expense management .................... 20



3

Executive summary
The 2012 barometer opens in a period of economic uncertainty in Europe, with negative
GDP growth in the Eurozone despite a range of contrasting situations.
Despite this, European business travel budgets are still growing, albeit slowly, but at an
average rate of 0.5 points above GDP, yet again demonstrating the resilience of the market.
Overall, the business travel budgets of the companies interviewed have increased by 1%.
Unlike in 2011, small and medium-sized companies enjoy a better situation than large
businesses.
As can be expected in this context, business travel expenditure management is central to the
concerns of the companies.

Travel budgets are not increasing overall, but they favour client base development
 63% of the 2012 budgets have remained relatively unchanged from 2011: the trend
already observed in previous years has become more marked.
 3 out of 4 companies now consider business travel as a cost for the company rather than
an investment. However, they recognise that this cost is essential: this explains why more
than a quarter of them have increased their expenditure on developing new
clients/markets, even if this involves cutting their internal business trip expenditure. In a
period of economic uncertainty, business travel is perceived as a real growth factor.

Business travel costs are increasingly monitored and restricted
 Although only 30% of the companies measure the return on their business travel
investment, almost all of them (89%) have established an expenditure monitoring process.
This development should be seen against the increasingly frequent tendency to enter
business travel expenditure under Purchases or Finance.
 Items weighing heaviest in relation to overall expenditure are the most closely monitored,
but these are also the least well managed (e.g. MICE).
 As the primary means for expenditure restriction and control, it is logical that travel
policies have been established in almost 9 companies out of 10, including the smallest. In
general these policies are very well implemented and cover all business trip phases.

Companies are opportunistic in optimising their budgets
 Although advance booking is still the main factor in optimising company budgets,
searching for best buy takes second place (as opposed to 6th place last year) despite the
induced risks of hidden costs. The use of rail travel when possible (in 5th place and rising)
and low-cost companies (among the first 10 optimisation factors) exemplify this
preference for levers affecting costs directly on booking, focusing on the short term
perspective.
 Nevertheless, the value of more structured factors is equally well recognised, such as
online booking, using preferred suppliers or renegotiating supplier agreements.



4

Mobile solutions are becoming a fully-fledged booking option
Applications provided by mobile tools increasingly cover pre-trip, on-trip and post-trip phases
and are turning this option into a real alternative for a growing number of companies (14%,
as opposed to 9% last year).
Security is becoming a major issue
Driven by increasingly stringent legal obligations, companies are increasingly integrating
security issues in their business trips. These issues are now the 6th most frequent component
of travel policies (for 83% of the companies) and are even among the 3 priorities for 2013.
Prospects for 2013: more wait-and-see strategies
Over 7 companies out of 10 anticipate that their 2013 travel budgets will stagnate. Growth
expectancy is diminishing, at +0.5%. Here again the situation is more favourable for small
and medium-sized companies.

Methodology of the barometer



5

Part 1: Economic trends and travel budget developments
Economic trends: Eurozone recession in 2012, slow recovery expected in 2013
2012 is synonymous with recession for the European zone, with GDP down 0.4% from
2011. France registered a GDP growth of approximately 0.
Although slow recovery is anticipated in 2013 (0.2% growth in Europe), the economic
outlook is still strained. During this year the IMF reduced its Eurozone growth forecasts on
two occasions.

The United States enjoy more favourable dynamics, with 2.2% growth, representing
progress from 2011 observations.
In Asia, Japan is recovering after a difficult year in 2011, showing 2.2% growth. Although
China no longer has two-figure growth, the level of GDP growth is still much higher than
for other regions, increasing by 7.8% for 2012.

Travel expenditure unchanged in Europe in 2012 despite the drop in GDP
The volume of expenditure for the 3 main European countries during this year remains
unchanged at 127 billion USD. The French market, amounting to about 36 billion USD,
has grown very slightly by about 0.6%.



6

Overall, the increase in business travel expenditure is still 0.5 points above GDP; this
confirms the resilient nature of business travel, as already observed in 2011.
The Global Business Travel Association (GBTA) forecasts slow growth for Europe in
2013, which should allow a return to 2008 expenditure levels, or approximately 131 billion
USD. Caution is still the order of the day, however, as a number of financial analysts
anticipate that GDP will increase less than the IMF's + 0.4% forecast due to weak exports
and restrictive budget policies.
In the United States, business travel trends also reflect the GDP trend. A total of 257
billion USD will have been spent in the United States in 2012. This expenditure has grown
constantly in the country since 2009.
As in 2011, China has the strongest growth. Expenditure increased by 22 billion USD
from 2011 to 2012. In this respect, China is growing by the equivalent of the French
budget every 2 years. It is forecast to overtake the United States in 2014, making it the
country with the highest business travel expenditure in the world.

Moderate growth (+1%) in business travel expenditure in Europe, with a range of
contrasting situations
The interviewed companies increased their budgets by +1% on average during 2012, but
the situation varies in several respects.



7

Geographical contrast:
- Germany and the northern countries in particular took the lead in terms of growth, with
an increase in budgets of over 2%;
- Southern European countries are marking time with diminished budgets;
- Interviewed companies in the UK have also seen their budgets reduced by -1% to -2%.

Contrast in types:
- Growth in the budgets of small and medium-sized companies and industries has been
the most significant at 1.6%;
- For their part, growth among large businesses has been sluggish at +0.1%. The largest
budgets (over €20 million) have even dropped by 5%, unlike in 2011 when they led the
growth figures with a +6% increase. The growth mechanism has thus been completely
reversed. This is one of the striking facts in the 2012 barometer.
Finally, a contrast between sectors:
- The construction, manufacturing and luxury sectors show above average growth
of 1.9%;
- Conversely, the finance and health care sectors have seen their business travel
budgets diminish by 1.6%.



8

The proportion of unchanged budgets has increased, giving rise to arbitrage
63% of the companies declared that their budget was largely unchanged in 2012. The
proportion of these companies has doubled in two years from 29% to 63%. In 2011, "only"
1 out of 2 companies had anticipated this budget stability for 2012; the phenomenon is
thus even more marked.

Even so, this does not mean that all budgets have been frozen; unlike in 2010, the
dynamics of the market remain positive with a higher proportion of companies declaring
growth in their budget than those declaring a budget cut: 23% against 14%.
The stability of the budgets is driving companies into arbitrage. Client base development
benefits most from increased budgets, with the development of new markets and clients
being the primary growth factor, followed in second place by maintaining existing clients.
This type of arbitrage is at the expense of business trips within organisations or internal
events, the primary budget reduction factors.
Business travel is therefore still a lever for company growth and is used as a determining
factor in company strategies.



9

1/3 of the companies measure the return on investment and 1/4 consider that
business travel contributes to their development
Currently 30% of the companies declare that they measure the return on their investment
on business travel. In 80% of cases, this involves measurements on all business trips in a
particular department or division. The return on the investment on each separate business
trip is much less frequently measured.

Measuring the return on investment is closely linked to the company's travel budget. The
larger the budget, the more important it is to measure the benefits. 43% of large
companies (with travel budgets exceeding €3 million) measure the return on investment;
this figure even reaches 53% for global businesses with budgets exceeding €20 million.
3 out of 4 companies still consider business trips as a necessary cost rather than an
investment. However, two facts should be borne in mind:
- The number of those undecided has decreased sharply. There were 6 times more of
them two years ago than today;
- The proportion of companies considering business travel as a major contribution to
company development is steadily growing.
This demonstrates development in the perception of business travel expenditure.
Companies are increasingly aware of the contribution made by business travel. Indeed,



10

companies today no longer consider reducing the number of trips as a way of optimising
the budget.
Travel management companies (TMCs) have a crucial role to play in this changing
perception: only 15% of companies without a TMC consider that business travel makes an
important contribution, while 26% of companies using a TMC hold this view. Working with
a TMC has a direct impact on the perception of business travel as an investment.

Most travel expenditure needs to be more tightly managed
The 3 expenditure categories subjected to more stringent monitoring than last year
account for 75% of the travel budget. As can be expected, these categories are the
largest items in the travel budget and attract the attention of companies.

Air travel is still the most closely monitored category, with a total of 57% of companies
subjecting it to a more tightly management. This result is still fairly logical, as this item
accounts for 40% of the budgets of the interviewed companies.
The two major issues in this monitoring are above all accommodation and MICE.
Hotel expenses are still a poorly managed category. It still appears relatively limited in
size but its real weight is difficult to assess for two reasons:
- The large number of booking channels (travel agencies, booking centres, direct
suppliers) prevents companies from obtaining an overview of their hotel usage. For



11

example, a study on the hotel industry commissioned by American Express among
travellers shows that travel policies do not impose any particular booking channel on
2/3 of employees;
- The fact that companies use numerous payment methods is a hindrance to
consolidating these expenses.
This particularly applies to large companies, for which accommodation only accounts for
20% of expenditure, but of which 54% declare that they monitor hotel expenses more
stringently. Small and medium-sized companies and industries tend to favour rail travel,
which is still generally a well-monitored and controlled item.
The perceived proportion of MICE expenditure (Meetings, Incentives, Conventions and
Events) remains small in terms of the attention devoted by companies (in particular
accounts in excess of €20 million, 41% of which wish to monitor this item more closely).
In fact this type of expenditure is difficult to consolidate and is hence under-evaluated for
two main reasons:
- Orders within the company come from multiple sources; and
- This expenditure is often outside the scope of activity of the travel manager.
This item can represent up to 30% of real travel expenditure in some sectors such as the
pharmaceutics or automobile industry.

Budget optimisation factors mainly affect direct costs



12

In the current context, and unlike what happened last year, companies increasingly
prioritise economic levers.
As in 2011, companies still favour advance booking as a means of optimising their travel
budget. In most cases, this can generate savings of 25% without affecting traveller
comfort. Studies show that between 2011 and 2012, the proportion of reservations
exceeding 21 days increased from 43% to 46% for long haul trips. This development is
even more striking on the European rail network, with an increase of 11% from 2011 to
2012. Predicting trips is thus essential for budget optimisation, but is a long-term approach
as it involves a change in the behaviour of travellers.
The largest increase is in factor 2: resorting to the best buy policy. In 2011 this factor
was only in sixth place. But obtaining the best buy has its own consequences: companies
should be aware of the hidden costs involved, such as for altering or cancelling tickets. In
addition, this factor can have a significant impact on the economic conditions set out in the
contracts negotiated with some preferred suppliers.
The use as mentioned of online booking is in third place, relatively unchanged from
2011. This factor has a double impact: on prices and on the implementation of company
travel policies. The resulting reduction in costs can achieve up to 20% savings on
average. This is also a structural factor, considering that an investment in an online
booking tool pays for itself within 2 years on average.
Other structural factors are also among the most widely mentioned:
- Use of preferred suppliers: down one place to fourth place;
- Use of centralised means of payment: within the top 10.
These two factors also show that companies have a long-term vision on budget
optimisation within the scope of their partnership with their TMC.

Travel policies are broadly implemented and cover all phases of trips
Travel policies occupy 7th place among the means of optimising budgets. As can be
expected, these policies still represent an essential frame of reference for business travel
and for its monitoring.
Overall, 80% of the companies have a travel policy and implement it properly, with 2/3 of
companies reporting an implementation rate of over 70%. This impressive implementation
figure is linked to the broad scope of the travel policy, which includes all business trip
phases.



13

This year has seen very significant developments affecting the very structure of travel
policies.
The first striking development concerns accommodation. This year hotels have become
the primary component of travel policies for 88% of the companies, ahead of air travel.
They only occupied 6th place in 2011. Taking into account the difficulties in consolidating
and monitoring this category, travel policies are still the primary means of laying down
rules.
The second major development concerns security, which now figures in 82% of travel
policies (see the point on security on page 17).
Finally, another major issue is expenditure monitoring. This appears in the travel policies
of 87% of the companies. Monitoring is applied both before and after the trip.

Companies use TMCs for support
As can be expected, companies use their TMCs for the major issues of the moment:
online booking, employee security, cost control. In this framework, travel agencies
increasingly occupy a partnership position: 50% of the services purchased by the
companies are strategic advice services for sourcing programmes, the purchasing
strategy, the workflow audit, or building the travel policy.



14

With a view to ensuring employee security, over half of the companies engaged their
TMCs to provide 24-hour support, while almost 40% of them used TMCs to repatriate their
employees or to re-route travellers during their business trip.

Part 2: An increasingly complex value chain
A complex value chain, but still managed manually to a large extent
The value chain is the combination of all phases, from authorisation of the trip to
reconciliation of the expenses.
At least 50% of the companies have organised procedures or even established
instruments for each phase in this value chain, both pre- and post-trip.



15

However, there are major disparities:
- Apart from online booking, the public sector has a more structured approach to all of
the phases. This is clearly linked to the regulatory framework of the administration;
- In the private sector, large businesses are more organised than small and mediumsized companies in the post-booking phase. This is to be expected, as they have both
the resources and the tools required. Small and medium-sized companies and
industries focus more on online booking, benefiting from increasingly accessible
technologies.
Even if processes are in place, they are still managed manually or through partial
automation and using frequently disparate solutions (originating from different sources):
this is still the case for 79% of the companies. One possible explanation for this relates to
the market offer: very few suppliers are yet capable of providing a fully integrated solution.
Despite this, progress has been made since 2011. For example, 41% of the large
companies declared that their management is completely automated. This figure was 28%
in 2011.
This trend is expected to increase, as over 50% of the companies wish to improve their
value chain management from now on, moving towards improved forecasting, monitoring,
measurement and consolidation of their travel budgets. Travel agencies have an essential
role to play in integrating these solutions.



16

Multiple and incomplete reporting sources
Companies now receive reports from multiple sources.

The main source is still travel agencies, particularly for large companies and small and
medium-sized companies and industries (respectively 65% and 54% using travel
agencies).
The second source of reports is internal, through company financial systems. As
companies have not usually made a clear choice regarding their means of payment,
problems arise in consolidating data, driving the companies to engage their internal
departments in order to obtain an overview of their expenditure.
As can be expected, only 55% of the companies receive a single, comprehensive report
on their entire travel expenditure. Progress remains to be made at a time when the prime
objective of 80% of the companies is to control their expenditure.



17

Part 3: Security and mobility issues
Traveller security is a key concern for companies
Recent events such as the nuclear disaster at Fukushima, hurricane Sandy and the
hostage crisis in Mali emphasise the importance of business travel security. Companies
are legally required to ensure the safety of their travellers. In France this obligation was
reinforced by legal precedent following the Karachi terror attack in 2007.

Companies have genuinely improved their awareness of this issue over the last 2 years:
83% of them now include security in their travel policy, as opposed to 74% in 2011.
Irrespective of their size, they have been establishing procedures to ensure immediate
localisation and repatriation of their employees. Their level maturity in terms of business
travel thus has no impact on establishing security measures.
The public sector, however, appears to lag behind slightly; this difference is probably
linked to the fact that most public sector business travel is not international.

Mobile solutions are becoming fully established
Mobile business travel support solutions are today being adopted in full. Mobile solutions
have adapted to business travel needs:
- in the pre-trip phase for booking and payment; and


18

- in the post-trip phase for reporting and expense management.

As can be expected, 14% of the companies now consider mobile tools as real alternative
booking options, as opposed to 9% last year.



19

Summary
Company maturity is still closely linked to the size of their travel budget

This matrix typifies the maturity of the various categories of companies with regard to
business travel, from the use of a travel agency (the first phase in the maturing process)
to measuring the return on investment, through implementing the travel policy or using
dedicated payment methods.
It also compares the rates of use according to the size of company travel budgets, from
less than €250,000 to over €3 million.
Firstly, the traditional business travel phases (use of an agency, expense management
procedure, existence and implementation of the travel policy) have now been established
in the vast majority of the companies.
On the other hand, payment, booking and expense management tools and solutions are
still largely a prerogative of large companies.
Thirdly, small and medium-sized companies and industries appear quicker to adopt
mobile technologies, which are lighter and easier to put into operation.
Most of the companies still share one challenge: measuring the return on investment. The
increasingly frequent allocation of the travel budget to purchasing and finance
departments should facilitate awareness of this issue.


20

Part 5: 2013 Prospects
2013 prospects: more wait-and-see strategies, +0.5% growth forecast

The economic context is still strained and there is a growing tendency for companies to
adopt wait-and-see strategies. While 63% of the companies declared a largely unchanged
budget in 2012, prospects for 2013 put this figure up to 71%. The proportion of increasing
budgets is anticipated at 16%, as opposed to 23% in 2012.
The mean increase in budgets looks to be around 0.5%. As in 2012, dynamics are on the
side of small and medium-sized companies and industries, while on the other hand
companies of over €20 million are banking on a 1.8% budget reduction.
This sluggish growth is consistent with forecasts for very moderate price increases. The
air travel sector, in particular short- and medium-haul flights, is only expected to increase
fares very slightly: 2% for economy class and 1% for business class. Fares for long-haul
flights are unlikely to increase to any greater extent. Moderate price rises are also
expected in the hotel sector: between +1 and +4% in general.

Key issues for 2013: development of international travel and expense
management
In 2013, 52% of the companies planning to increase their business travel budget will do so
to support their international activities, as opposed to 31% on the domestic market.


21

For example, 850 French companies are currently established in China, which in 2020 is
expected to become the second-largest commercial outlet for France after Germany.

This development on an international level will make travel management more
complicated; as can be expected, this complexity is reflected in company priorities for
2013.
These priorities mainly focus around controlling costs and optimising and consolidating
expenditure.
Further company priorities include employee security during their business trips and, to a
lesser extent, employee satisfaction. Some sectors, such as insurance and services to
companies, take more account of satisfaction. For these companies, the travel policy also
represent a means to attract and keep talented personnel.
In conclusion, three issues emerge for the business travel industry in 2013:
- Organising business trips to support the growth of European and international
companies;
- Controlling and measuring the costs that may be involved in such international
development through improved technological integration and improved support
throughout the value chain;
- The final major issue concerns travellers themselves: their trips must be facilitated and
made safe to ensure maximum efficiency.



22

About the barometer
The 2012 barometer was prepared by Concomitance on the basis of a telephone survey
conducted from 18 September to 15 October 2012 among persons in charge of travel
budgets ranging from less than €250,000 to over €50 million (Finance Directors, Purchasing
Directors and Travel Managers) in 567 European companies based in 11 countries:
Germany, Great Britain, France, Belgium, Luxembourg, the Netherlands, Spain, Italy,
Denmark, Sweden and Norway.
About Concomitance
Concomitance is a service company specialised since 2001 in marketing, commercial, sales
and client relations research, consultancy and performance development.
Concomitance has teams specialised in several activity sectors such as telecommunications,
travel and business travel, banking, distribution, etc.
Since its establishment, Concomitance has stood out in terms of its capacity to transpose
commercial and marketing issues into action plans which are immediately effective and
comprehensible to all players. This capacity is a direct result of Concomitance's DNA: the
prior business experience of our consultants allows us to formulate recommendations and
share them with our clients in line with the maturity of their organisation.



European business travel barometer version anglaise 2012

Recomendados

Recomendados

Más contenido relacionado

Destacado

Destacado (16)

Similar a European business travel barometer version anglaise 2012

Similar a European business travel barometer version anglaise 2012 (20)

Más de Philippe Greco

Más de Philippe Greco (6)

Último

Último (20)

European business travel barometer version anglaise 2012