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Businesstravelbarometer2010 Eng

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2010 American Express barometer on european organisations business travel practices

2010 American Express barometer on european organisations business travel practices

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    Businesstravelbarometer2010 Eng Businesstravelbarometer2010 Eng Document Transcript

    • EUROPEAN BUSINESS TRAVEL BAROMETER 2010 by Groupe Concomitance EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 Groupe Concomitance: Tel: +33 (0)1 78 16 52 30 or infobarometre@concomitance.comThis 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
    • The 20th American Express Business Travel Barometer is released at the end of anuncertain year in economic terms, with GDP growth of around 1% forecast for theEuropean zone. In this context, the barometer indicates that European businessesT&E budgets are shrinking, although without showing as significant a decline as in2009.40% of businesses thus report budget cuts for 2010, compared to 66% in 2009.Furthermore, the percentage of increasing budgets has almost tripled from 11% to31%. The worldwide economic downturn is the primary cause of reduced expenditure,in the face of internal measures to reduce travel costs.Paradoxically, economic imperatives are also behind budget increases, not least theneed to develop new clients and markets and to retain business.The majority of T&E expenditure is dedicated to maintaining and developingbusiness activity.This year, European companies devoted 63% of their T&E expenditure directly tomaintaining and developing business. Even so, intra-company business trips remainedthe largest travel category for European businesses in 2010. Businesses support ‘strengthening TMC usage’ as the primary means of makingsavings.Although the principal Levers of optimizing expenditure remain the same, theirhierarchy has altered during 2010. Businesses seem less opportunistic in theirattempts to reduce costs and find potential savings, irrespective of their expenditurelevels. As a consequence, three of the four primary Levers of optimizing T&Eexpenditure cover negotiations and the strengthening of supplier relations, includingthose with the TMC. Strengthening TMC use became the primary method of optimizingexpenditure in 2010, ahead of the ‘best buy’.Businesses are strengthening and expanding monitoring processes, particularlyregarding their staff. The trend towards generalization and expansion of travel expenditure controlmeasures, which began in 2008, is continuing on several levels: • Travel Policies which reinforce each other and which are better implemented: 93% of the responding businesses reported currently having one sole travel policy. Travel policy coverage has increased in virtually every area this year, with a record 67% of businesses showing a travel policy compliance rate above 70%. • Businesses have a more mature approach to the use of expenditure control and monitoring procedures: 93% of businesses reported having implemented T&E monitoring and control procedures. • ‘Self booking tools’ (SBTs) are being used for more than just bookings: SBT usage and performance both remained constant compared with 2009, and SBT applications have been extended above and beyond the booking process itself with the introduction of functions to manage travel orders and expense forms. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • Greater monitoring of employee travel and expenditureThe barometer found that 97% of expenditure initiated by employees was subject toauthorization to a greater or lesser degree, and this year showed a trend towardsstringency with 25% of businesses reporting that all employee expenditure was subjectto prior approval.At the same time, in order to comply with provisions on corporate social responsibilityrelating to the safety of staff while on business trips, 74% of respondents reportedhaving implemented measures to remain in contact with their employees.44% of businesses (up 20 percentage points on 2009) evaluated the performance oftheir TMC. The four most important criteria this year were the quality of service, theagency’s ability to demonstrate its economic performance, cost control and dataconsolidation.Businesses reported greater usage of TMC services across the entire value chain, with2010 showing increased use for diagnosing and improving the purchasing process (up14 percentage points on 2009) or for new elements such as workflow auditing andanalysis (36%), or for implementing geolocation solutions for travellers (22%).New business challengesBusinesses as a whole are continuing to increase and combine their payment meansand methods. However, the barometer also notes a slight trend towards rationalizationof these means through more marked use of corporate cards, replacing internal costgenerating procedures such as expense form reimbursement.As regards expenditure monitoring, businesses received more regular reports on theirexpenditure in 2010. Even so, 60% had received data on all their travel expenditure,which furthermore came from a variety of sources.The rationalization of payment methods, data sourcing and reports is a majorchallenge, particularly for establishing the total cost of a business trip.Ultimately, businesses must develop and assess the efficiency of new alternatives tophysical travel, such as telepresence or video conferencing. 40% were unable tomeasure the benefits of these solutions compared to face-to-face meetings, and thuswere equally unable to calculate returns on investment. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • Prospects for 2011Another strong trend this year is the importance of personal technology in the businesstravel industry value chain. Around 50% of businesses reported that the use of mobiletelephones, smartphones and laptops for business travel would increase over thecoming months.When asked in September 2010 about their expectations for the coming year,European businesses took a relatively prudent view of 2011.They suggested a slight recovery in T&E expenditure, with an increase of 3%. Onaverage, 34% expected their budget to rise, 65% thought it would remain constant and11% foresaw a reduction. As for 2010, it was the large businesses that predicted agreater than average percentage of budget increases: 61% rather than 31%. Thisdisparity are visible on a European country-wide level: Germany and theScandinavian countries take the lead with 50% of budgets increasing, compared withless than 25% for countries such as Spain and France.However, there is one point in common: businesses unanimously reported that thisbudget growth would primarily be linked to the development of business andcommerce outside the European zone.A prudent recovery for the business travel industrySince the third quarter of 2010, the international economic situation has beencharacterised by an increasing number of indicators suggesting that the pace of activityin the global economy is beginning to revive, following a period of recession whichbegan in the last quarter of 2008. However, the IMF is projecting extremely sluggishgrowth (1%) for the European GDP, with strong disparities within the eurozone: 2.1%for Germany, 1.5% for Italy, 1.3% for the UK, 0.9% for Spain and 2.1% for France.In line with this modest economic revival, the business travel sector remains highlyvolatile and difficult to assess. Indeed, what proportion can be attributed to structuralcauses such as the reduction of business T&E budgets, and what to events such as thevolcanic ash cloud which paralyzed the European airline industry for several days?In the Airline sector, there have been signs of a post-recession rebound for theinternational airline industry.Following the serious impact of 2009, the Airline sector has recovered in 2010.According to IATA, the International Air Transport Association which encompasses230 companies worldwide, the sector’s cumulative net profit could reach 8.9 billiondollars, as opposed to losses of 9.9 billion the previous year.This recovery has been driven for the most part by China and India and to a lesserextent by North America. However, European businesses continue to lag behind, at aparticular disadvantage due to the weak European economy. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • In order to deal with an environment which remain unstable, airlines have focused ontwo major approaches: • They are continuing to reduce their fixed costs through links with other international companies, the main objective being to rationalise flights by implementing joint ventures or alliances (Air France and China Southern; America Airlines, Iberia and British Airways; or Atlantic Plus-Plus, bringing together United, Continental, Lufthansa & Air Canada). At the same time, they are managing their seat capacity cautiously, in particular on certain routes with a view to prioritizing hubs on intercity connections which had been abandoned to low-cost airlines. Seat capacities on European flights have grown by around 10% - this has been driven largely by the Middle East and Asia, while capacities for intra-European routes have only increased by 7%. • They are developing a face value policy through moderate price increases in business class (7% increase on long-haul flights and 4% increase for medium distances) and in economy class (13% increase on long-haul flights and 13% decrease for short-haul).Businesses are also attempting to expand their additional sources of revenue byimplementing specific surcharges known as ‘ancillary charges’ on certain types ofservices, such as additional luggage and preferential seating.This trend will need close monitoring in 2011 as it could impact upon the developmentof business expenditure. In fact, according to the World Airline Report, this revenueshould be worth around 18.4 billion euros in 2010, increasing exponentially.In the hotel industry, markets this year have been affected to different extents by anincrease in the occupancy rate and a worldwide drop in average daily rates (ADR) ofaround 3% in the first half of the year.The figures vary according to destination and indeed city markets.By way of example, in June 2010 the French market saw a 2.6% decline in the averagedaily rate against a 4% growth in occupancy rate.The daily rate is also falling in markets such as Denmark, Finland and Spain withdrops of 16%, 9% and 6% respectively.It should be noted that in certain markets the price decline was ‘compensated for’ via arealignment of the VAT rate. This is notably the case in the UK market which sawVAT increase from 17.5% to 20%, against a 1% price increase and 4% growth in theoccupancy rate.Conversely, certain countries such as Germany or Sweden saw price increases of 8%and 9% during the first half of 2010.This downward trend in prices is expected to reverse in the second half of 2010 inresponse to increasing growth in demand. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • In the railway market demand is continuing to increase, predominantly thanks to agrowth in leisure-related traffic.In France, traffic has increased by 3.4%. It should also be noted that transfer of 1stclass bookings to 2nd class has stabilised.In the UK, demand has risen by 5.1% and is back at its 2008 level!At the same time, the launch of new routes such as Madrid-Barcelona and Milan-Rome has contributed to rail growth, as experienced in France on the Paris-Lyon andParis-Nantes routes, at the expense of air travel.Finally, there has been a marked growth for international routes such as Paris-London(14% increase) where Eurostar holds a market share of more than 80%, and for theThalys routes with an increase of 7.5%.In the field of car rentals, global demand has remained constant this year, albeit witha slight decrease in the number of days per rental. The sector has made no significantchanges compared with 2009. However, prices have increased by between 2% and 7%depending on the market segment.There are two principal reasons for this increase: • The first is related to increasing fleet costs which have resulted in tighter management of vehicle fleets. • The second reason is the implementation of pricing policies identical to those recorded in the aviation industry, with an increase in supplementary services incurring charges (GPS, additional insurance, refuelling, ‘no show’ penalties etc.)Budget growth conceals substantial disparitiesThe Europe of business travel was still in a period of recession during 2010, althoughthe percentage of decreasing budgets is lower than for the previous year: 40% against66% in 2009. Even so, it should be mentioned that there has been a slightimprovement for increasing budgets, almost tripling from 11% to 31%.It must be acknowledged that there has been great disparity between different budgetsizes this year, with large businesses indeed seeming to have withstood the sluggisheconomy more successfully.There are various explanations for this: • Businesses have offered three reasons for this reduction in expenditure: the global economic downturn, a freeze on travel and expenditure optimization. This hierarchy is generally respected, no matter the size of a business’s budget. • Budget increases are mostly economic imperatives that are primarily due to: new client/market development, business retention and competitive pressure. It should be noted that for large accounts, competitive pressure has been named as the most important factor in T&E budget increases during 2010. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • This disparity can also be seen on a European level. In Germany and the UK, therefore,the percentage of increasing budgets lies between 32% and 42%, whilst France andSpain are still lagging behind with an increasing budget percentage only half the size –between 15% and 18%.63% of budgets are devoted to maintaining and developing business activityIn 2010, 63% of business budgets were dedicated to maintaining market shares,gaining new clients and developing a relationship with suppliers – stable at 2009 levels.Nevertheless, differences may be noted in behaviour among the businesses surveyed.Whilst large businesses devote 70% of their budget to directly developing theirbusiness activity, businesses with budgets of less than €5M dedicate only 60% of theirexpenditure to this task. In fact, the key element is intra-company trips as theyrepresent more than 30% of European businesses’ total expenditure. This figure is dueto the effects of the economic recovery, and to the strong interdependence between thedifferent entities of certain (especially medium sized) organizations. Even so,measures put in place to reduce travel expenses such as a freeze on travel orexpenditure optimization do not appear to have had a profound effect on the hierarchyof expenditure motives. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • For large accounts: Expenses related to intra-company transfers, to maintainingexisting clients and to developing new clients/markets occupy third, second and firstplace respectively. It is primarily organizational elements which threaten to alter thehierarchy of motives for business trips, with large businesses having furtherstreamlined the intra-company transfer process this year through the implementation ofalternative solutions to physical transfers.T&E expenditure: cost or investment? The concept of business travel expenditure being a contribution has been growing steadily for a number of years. All the responding businesses showed progress as compared with 2009 (up 2 percentage points for budgets of less than €5M, 3 percentage points for those between €5M and €20M and 1 percentage point for those above €20M). EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • It should be noted that this perception is more clear cut for large accounts. 29%consider it an investment and 64% a necessary expense for the business.Similar types of perception can also be found according to the market or culture.Therefore, German and Scandinavian businesses feel than in 39% and 40% of cases,their travel budget is a contribution to their development.On a more global scale, it should be noted that this developing trend towardsconsidering travel as a real investment is hampered by the genuine difficulties whichthe responding businesses encountered when trying to measure its real benefit.Numerous studies show that businesses ultimately have very few indicators and meansto measure a trip’s return on investment.To address the crisis, businesses are using different Levers for optimizing T&EexpenditureBusinesses as a whole have used the same optimization levers as in 2009, showing arelatively unchanged hierarchy for the most important methodsHowever, taking the definitions used in 2009, it illustrates that structural methods areclearly gaining ground over price-related levers.The majority of businesses, whilst still considering purchase-price optimization to beimportant, have made marked efforts this year to standardise their practices by turningmore to structural tools such as reinforcing TMC usage or renegotiating supplieragreements. They have focused on the fundamentals by adopting strategies which aremore profitable in the medium or long term. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • This shows that reinforcing TMC usage has become the primary expenditureoptimization tool in 2010, ahead of the ‘best buy’ which held first place in 2009.Businesses preferred to maximise their supplier agreements rather than to carry out‘isolated deals’ which could harm corporate contract profits.As a consequence, three of the four primary levers of optimization cover negotiationsand the strengthening of preferred supplier relations, including those with the TMC.Note that amongst the changes in hierarchy for expenditure optimization methods, theuse of online tools and ’travel alternatives’ has decreased. This change is due first ofall to greater business maturity in the use of online tools (down three places from2009) and secondly (down four places from 2010), following a period of justifiedinfatuation, to difficulties in implementing and evaluating the performance of thesetools.Finally, businesses have realised that changing travellers’ behaviour remains a longerterm method which will create more important savings, such as for example havingmore consistent practices for advance bookings and the use of restricted tickets.Overall, we have noticed a degree of homogeneity on a European level in the use ofthe three major optimization (levers), namely reinforcing TMC partnerships, using‘best buys’ and renegotiating with suppliers.As in 2009, local conditions may have an effect on the choice and hierarchy of thesemethods. This is the case in France, for example, where the preference for rail overairways takes sixth position. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • Travel Policies which reinforce each other and which are better implementedWe have noticed that considerations linked to travel policies are the focus ofbusinesses’ concerns. (The tightening of travel policies takes fifth position in theoptimization methods hierarchy).The scope of travel coverage and the travel policy compliance rate are strongindicators of the way in which businesses manage their expenditure. 93% of businesses surveyed this year reported ‘having a uniform travel policy whichapplies to the entire organization and its subsidiaries where these exist’, an increase of4 percentage points on 2009.Travel policies include the principal T&E expenditure optimization methods that werepreviously discussed.There have been some developments this year, in particular for: • Regulations on meetings, incentives, conferences and events (MICE), which now feature in more than half of all travel policies, an increase of 5% on 2009. For the record, this expenditure category represented 13% of the budget for the businesses surveyed this year. • Regulations on the use of ‘travel alternatives’ which feature in around two- thirds of travel policies, a figure which has however declined slightly compared with 2009. • CO2 emission considerations - although these are increasing, they still seem to be marking time, despite an increasing number of initiatives aimed at reducing a business’s carbon footprint.67% of businesses have travel policy compliance rates above 70%. These compliancerates vary significantly according to the businesss budget size, with more than 75% oflarge accounts showing a rate higher than 70% whilst this figure drops to 55% forbusinesses whose budgets are less than €5M. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • This year, 93% of businesses reported having implemented control and monitoringprocedures for their travel policies, showing no change from 2009.Businesses have now reached a level of maturity in the use of these control andmonitoring procedures. As regards the frequency of checks, systematization is alwaysrequired no matter the travel budget size. At the same time, systematic expendituremonitoring remains by far the most popular method.Economic conditions do not seem to have a significant influence on the choice of onemethod over another, or on the frequency of checks.Each company has now established its own experience curve for the subject. Moreover,in the majority of cases, internal teams developed the process and methods (56%finance department, 20% purchasing department) and are responsible for monitoring(principally the finance department with 52% and the travel managers with 27%).New ways of staying in touch with employeesBusinesses have implemented regulations to cover employee safety and business tripmonitoring. 74% take measures to remain in contact with their employees.For the record, regulations covering employee safety and monitoring are included inthe travel policy in 85% of cases, a 2% increase on 2009.This high percentage is the result of measures implemented by businesses in directresponse to various political and military crises occurring in some parts of the world,or more recently to the effects of the Icelandic volcano.It is important to remember that businesses and their management are legally obligedto protect their employees. Their scope of liability is enormous, extending from risk EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • prevention and the ability to safeguard the employee’s health to any possible care andrepatriation needs which may arise either in the workplace or while on business trips.In this context, it becomes essential to use new technologies and mobility solutions toremain in constant contact: we should point out that 61% of businesses haveimplemented measures for remaining in constant with employees at all times.Other markets, the United States in particular, display very similar figures to theEuropean market. 65% of businesses reported being able to monitor employees forsafety reasons. Generally speaking, the use of such technologies is growing rapidly.Analysis tools deserve a mention at this point, both ‘pre-trip (detailed territorial andcartographic analysis graded according to thematic alert levels: geopolitical, socio-economic, threat of terrorism, crime, internal transfers) and ‘post-trip’, where theymake geolocation possible, not only using the employee travel file number (dates anddestinations, flight numbers, hotel details, mobile telephone numbers) but also via theemployee’s mobile, computer or even in some cases a beacon. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • Monitoring traveller expenditureThe barometer shows that regulations on the use of payment methods appear in 82% oftravel policies, and have been implemented more strongly this year.From this perspective, expenditure by employees does not go unmonitored as 97% ofexpenditure was subject to authorization to a greater or lesser degree and/or wascapped. The trend towards stringency is evident, as this year 25% of businessesreported that all expenditure was subject to prior authorization.It is also highly likely that the trend towards increased scrutiny of employeeexpenditure was accentuated by the increasing use of surcharges (ancillary charges)not included in the business contracts originally signed.Apart from the fact that it is often difficult to identify additional charges when makingthe booking, it is essential to implement a policy that covers how to deal with feesincurred by the employee during the period following the booking, in particular duringthe trip itself (luggage surcharges, food on board etc.)By way of example, American Express has calculated that these supplementary airlinecharges (ancillary revenue) represent a 3-5% increase for travel budgets.It should be emphasised at this point that this concerns all expenses (some hotelservices such as parking, business centre and internet access; room service; mini bar;car rental fees such as refuelling surcharges, GPS or additional driver surcharges),without forgetting other types of expenditure which are not yet monitored such as on-the-ground expenses (taxis, shuttles, parking etc.).The task of handling employee expenses is therefore a major challenge for the creationand monitoring of travel policies. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • The use of online booking tools is stabilizingFollowing several years of growth, the use of online self booking tools (SBTs) hasstabilised during 2010. As we have reported, it remains a method used by businessesfor optimizing their travel budgets.Businesses have achieved real maturity, as in other areas of travel budget management.In 78% of cases they reported having received help from TMCs, which this yearcontinue to play an essential role in choosing, configuring, implementing andmonitoring such booking tools. Businesses report that using SBTs, and flexibility insetting agreements, has allowed them to monitor their costs and their travel policymore effectively. The more widespread use of SBTs has thus contributed strongly toincreasing compliance rates for travel policies.This year showed new signs of maturity, with functional coverage widening to includethe collection and payment of expense forms.The implementation and use of this new functionality is an indication that businessesare taking a greater interest in the management of internal administrative andaccounting costs associated with the reconciliation and payment of expense forms.Finally, it should be pointed out that: • SBT usage is still less important for businesses with budgets of less than €5M - 54% compared to 84% for budgets greater than €20M. • There is great disparity between different European countries; for example, 36% of Spanish businesses reported using an SBT compared to 68% in Germany. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • As is the case for the entire travel chain, the SBT is not exempt from monitoring andchecks. 96% of businesses reported having implemented SBT measurement tools, aslight increase on 2009.During 2010, the different criteria used to measure efficiency remained generallystable and various in numbers. The choice of indicators is essential, and it would bereasonable to consider the increased use of other indicators beyond classic indicatorssuch as travel policy compliance rates or the percentage of SBT bookings comparedwith bookings as a whole. This may include some traveller practices which require theTMC to carry out specific actions on the travel records. They are then altered manually,i.e. they cannot be dealt with entirely using an automatic process, creating additionalcosts for businesses.Greater evaluation of TMCsNearly half of all travel agencies were evaluated in 2010, an increase of 20 percentagepoints on the previous year (24%). There is much to suggest that this developmentshould be analyzed from the perspective of increased TMC usage, now the primarymethod of travel budget optimization.Moreover, businesses are taking a relatively logical approach to their employment ofthese criteria. They are focusing their efforts on cost control and travel policycompliance by strengthening the control and monitoring analysis tools for their travelpolicy. It is therefore not surprising that these two criteria for assessment havedeclined this year (moving from second to third place and fourth to fifth placerespectively.) EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • Businesses have therefore focused on: • The TMC’s ability to deliver a quality service by generalizing service level agreements (SLAs) • The TMC’s ability to demonstrate its economic performance, this year the second criterion for TMC evaluation. The strength of proposals for optimizing expenditure is now right at the heart of the debate, and seems to go beyond monitoring proposed and generated savings. • Data consolidation, an area where businesses expect TMCs to monitor budgets, make the right tradeoffs and monitor supplier agreements, with the associated challenges such as data integration.TMCs are increasingly being called on for value added servicesBusinesses are calling on TMCs with increasing frequency for tasks outside of theirtrade. (Diagnosis, improving the purchasing process, auditing and improving‘workflows, online booking solutions, integrating travel policies into informationsystems and implementing solutions for travel orders and expense forms, such as theexample of SBTs.)This year, items related to reducing direct costs such as the ‘sourcing program’ (air,hotel, MICE) or to travel policy optimization have declined slightly. Without a doubt,this is linked to businesses’ purchasing efforts as mentioned at the beginning of thebarometer.As a new development in line with the elements previously stated, businesses havebeen employing solutions for improving traveller comfort and safety (such as 24-hourassistance) during 2010, and geolocation solutions are emerging.Finally, it was noted that businesses with smaller budgets chose to purchase thefollowing as a priority: 24-hour assistance, online booking solutions and solutions forintegrating travel policies into their information system. Large businesses additionallyopted to improve their direct costs, for example by improving purchasing processes or‘hotel sourcing’, which (as we know) are a source important expenditure which isdifficult to control. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • Multiple sources for T&E expenditure reportingMore than ever, issues relating to payment and reporting are interconnected. We havecited the challenges associated with capturing ancillary charges and reconciling themwith expenditure.As regards payment means and methods, there is a slight trend towards rationalizingusage although there are still multiple methods of payment. The use of and ‘corporate’cards and BTA accounts seems to be gradually increasing compared with practicessuch as refunds on presentation of expense forms or employees’ personal card bills,which have been in decline for three years. It is crucial to optimise the number ofpayment methods in order to obtain an overview of expenditure, as the processes forreconciling all expenditure are very different, and generate internal processing costswhich are important for the business.Regarding expense monitoring, this year businesses have been receiving more regularreporting on the categories of expenditure. Even so, as regards an overview ofexpenditure, only 64% of businesses received reports on all of their T&E expenditure.Beyond the depth of reporting, which needs to improve both on categories ofexpenditure and their granularity (surcharges), the importance of information sourcesmust be stressed. In this regard, businesses reported that TMCs and payment cardswere the two principal sources where it was possible to establish expenditure reporting(67% from TMCs, 39% from cards). For this reason, card data and travel are excellentcompanions, as payment card data is an admirable complementary tool for identifyingexpenses above and beyond a trip’s transport costs. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • It is therefore strategic to receive complete and reliable reporting on all expenditure inorder to steer the purchasing policy and optimise travel costs, in particular in thecontext of reinforcing T&E expenditure checks.New measurement tools to implementWe noticed that the use of ‘travel alternatives’ were an important method foroptimizing businesses’ T&E expenditure, to which 66% of business travel policiesrefer.However, businesses seem to have difficulty assessing the effectiveness of ‘travelalternatives’ for their travel practices, excepting inter-company trips. Indeed, 70%consider a telepresence or video conferencing to be as or more efficient than face-to-face meetings.Businesses are not yet using these new technologies frequently or as a commonsolution. A lack of experience in using these tools explains why businesses are unableto appreciate their effects for professional travel. These observations are similar formature markets such as the North American market. The use of ‘travel alternatives’ isalso important for replacing internal meetings, such as in the European market. 27% ofNorth American businesses reported having indeed used a telepresence to replace thistype of business trip.In addition, there is an absence of tools for measuring the benefits of travel alternativesas compared with face-to-face contact. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • This lack of measurement supports the trend observed at the beginning of thebarometer towards difficulties in measuring returns on investment for a business trip.From this perspective, a generalised use of ‘travel alternatives’adds a level ofcomplexity to this analysis.To deal with this, the TMC should suggest monitoring and analysis tools for eachproposed method of contact (face-to-face and remote), since physical travel and theuse of travel alternatives will not in fact necessarily be incompatible.These tools will contribute to better preparation for meetings, and will also ensurebetter monitoring of some projects. They promote efficiency and productivity in thebusinesses that use them.Prospects for 2011According to IATA, the discrepancy between Asian companies and their Europeancounterparts will persist in 2011 amid a general slowdown in growth. IATA predicts5.3 billion in cumulative profits, including 3 billion for Asian companies, and a 5%increase in global traffic. European companies will remain on an even keel, displayinga 3.4% traffic increase.For airlines, prices are predicted to rise in 2011:For the European market, price increases for economy class in the domestic short-haulmarket are in the 4% to 9% range. For business class in the international long-haulmarket, increases fall between 5% and 9%.Price increases in the North American market are slightly lower than in Europe, at 2-6% for domestic short-haul and 3-7% for long-haul in business class. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • Price increases are more substantial in the Asian market, with figures between 3% and8% for domestic short-haul and between 5% and 10% for long-haul in business class.It should be noted that European airlines will continue to organise themselves toconsolidate their market by opting increasingly for alliance strategies, in an effort toreduce fixed costs and improve seat-occupancy rates in areas where they are not yetstrongly represented.Other factors, notably oil prices but also capacity reduction, will drive changes to thecurrent situation and will contribute more directly to increasing prices.Joint ventures will result in the development of global agreements between businessesand will allow some airlines to offer optimised coverage. It can be assumed that areduction in services for major hubs and routes will have the direct effect of increasingprices.For hotels, tariffs for European establishments will experience a moderate increase in2011.As is the case for air transport, the hotel industry has gradually been emerging fromthe crisis during 2010. As well as improving the operational performance of hotelgroups, industry experts also predict that the hotel real estate market will experiencerecovery. However, caution is called for in 2011, when tariffs will also see onlymoderate increases, driven by demand and by higher occupancy rates for all businessdestinations. European hotel tariffs should thus increase by 1-6%, whereas greaterincreases are expected in China, Hong Kong and Singapore. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • For the railway market, the opening up of the market to competition will allowplayers to launch huge projects as a way of strengthening their presence on a nationallevel, as well as in neighbouring countries.Examples include the Deutsche Bahn, which is strengthening its position in Poland,the Netherlands, Denmark and soon in the UK, and also the SNCF, which is trying toestablish a significant presence in Germany.This new competitive market will offer travellers a wide range of choices, both forprices and for services offered.Competition with airlines will again be the subject of tradeoffs on European routes,where the decision will be less easy as journey times are still long.Demand should continue to increase. Indeed, businesses will still continue to favourthis form of transport over short-haul flights.The development of dematerialization services in France, Thalys new loyalty programand the ability to print Eurostar tickets from home all affect comfort, and willinfluence passenger choices.Riding on this success, prices in France are predicted to increase.In the car rental market, the slight increase in prices in expected to continue,principally as a result of maintaining vehicle fleets at their current levels and of anadditional revenue policy identical to 2010.In this context, increases will range between 3% and 5% for 2011.On the American continent, basic prices will remain fairly stable or will decreaseslightly, principally due to increasing ‘post recession’ competition levels. However,rental prices are predicted to see a slight increase, as in Europe, driven by newsurcharges or taxes – such as the introduction of cancellation charges. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • New emerging practicesThe importance of new technologies, and notably personal tools for remaining incontact with the business, was emphasised. This year, an average of 56% of businessesreported making use of a mobile telephone, a smartphone or a laptop for business trips.These new technologies are part of a broader context which addresses the challengesof productivity, comfort and (as we have seen) employee safety.The experience curves are still too recent to offer any conclusions, even if businessesare making it clear that the use of all types of mobile tools will become a regularpractice. The development of mobile tools for business travellers will take placeaccording to four determining factors: • Enabling the employee to remain in constant contact with his business and TMC. • Enabling the employee use his mobile to access all functionalities for remotely managing his travel. • Facilitate his travel and ensure his comfort using applications which are fun but which also allow him to increase his efficiency (monitoring, geolocation, mapping). • Facilitate his work during the trip (room rental, video conference room etc.) EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • Slight increase in T&E expenditure, driven predominantly by large businessesDespite the crisis, the European business travel market is predicted to increase by morethan 3% (3.2%) in 2011.We should remain cautious, as businesses are generally taking a ‘wait-and-see’approach over the next months, in particular those with budgets of less than €20M.The International Monetary Fund predicts that the GDP for the European zone willremain practically unchanged for 2011 (an increase of 0.8%). As for 2010, there isimportant disparity between different countries within the zone (UK 1.2% increase,0.2% increase for Germany, 0.4% increase for France and Italy, 0.7% increase forSpain).Although the economic situation is relatively similar to 2010, businesses are still moreoptimistic for 2011.34% of the businesses surveyed predicted that their budgets would increase, and 55%foresaw no change.The average expenditure increase totals 3% for 2011, with growth being led by largegroups (as in 2010) seeking to consolidate efforts at reducing administrative expensesundertaken and to better mediate changes in their expenditure according to theirmotives for travel.It should be noted that the main reasons for budget increases in 2011 are associatedwith developing activity outside the European zone.Europe seems to be split in two in this regard, with Northern European regions such asGermany, Scandinavia, Belgium and the UK more optimistic about recovery. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • However, there is one point in common: Businesses unanimously reported that thisbudget growth would primarily be linked to the development of business andcommerce outside the European zone.The European business travel market will be driven by activity on an internationallevel, regardless of a business’s level of expenditure. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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
    • About the BarometerIt was prepared by Concomitance from a telephone survey conducted between the 5thand 29th September interviewing managers in charge of travel budgets (purchasingdirectors, travel managers, financial directors etc.) at 295 European businesses within7 principal markets: Germany, Great Britain, France, Benelux, Spain, Italy and theNordic countries. The budgets represented range from €400K to €50M.About ConcomitanceCreated in 2001, Concomitance is a company specialised in market research,consulting and human performance for marketing, and sales initiatives.Concomitance is made up of a team of professionals who can intervene through thefull process across several sectors (telecoms, travel and transportation, financialservices, industry, retail etc.).Since its creation, Concomitance has focused on converting sales and marketingchallenges into effective and efficient action plans, endorsed by all projectparticipants.This factor is down to Concomitance’s roots. All of our consultants have anoperational experience, enabling us to develop and share recommendations in line withthe maturity levels of our client. EUROPEAN BUSINESS TRAVEL BAROMETER 20th edition – November 2010 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