Business Travel Insight2014(11-8-13)

2014 Business Travel Forecast and Insight

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Introduction
Welcome to the Travel Leaders 2014 Business Travel Insight. As 2013
draws to a close, it is important to begin to assess what trends will
impact 2014, and how changes in the travel industry may affect
individual clients in the upcoming year. The Travel Leaders
Consulting Team constructs this Insight document each year to help
our clients understand some of the travel developments that may
take place in the near future. To do this, our team analyzes an
assortment of well-‐known global travel sources and incorporates
data patterns we see that are specific to Travel Leaders clients to
create a customized Forecast specific to our clientele. By taking the
information in the 2014 Insight into account and working with the
guidance of an experienced travel account manager to develop a
sound strategy—we hope each client will have true insight into the
future of the business travel program and will be proactive about
optimizing their travel programs for the coming year.

Travel Leaders Consulting Team
November 12, 2013
Consulting@travelleaders.com

Timeline of Upcoming
Business Travel Insight
Updates:

January 2014: Quarter 4
Insight Updates released

April 2014: Quarter 1

July 2014: Quarter 2

October 2013: Quarter 3

November 2015: Full
2015 Business Travel Insight
released


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Overview:
An impressive 84% of Travel Leaders agents who specialize in business travel indicated that
2013 bookings are on equal to or better than 2012. So will growth carry over into 2014? Yes.
All our data indicates that the number people traveling for business will continue to increase
over the next year. However, this growth with be diluted by uncertainty and caution about
the business travel marketplace, and the economy as a whole. The recession still casts a broad
shadow on business travel budgets, and the recent government shutdown added to an
already uncertain business travel marketplace.
Trends for 2014 and Beyond
Global trends can have a major impact on the way businesses operate, manage their
resources and, of course, travel. By examining the major socioeconomic trends we’ll see in
2014, we can predict ways they will affect the way people travel and the influence they will
have on the business travel industry.
Trend: Making Big Data Work
“Big Data” refers to the collection of large, complex sets of data. Organizations are already
looking for ways to capture, store, study, and use huge quantities of data, and more
organizations will look for ways to manage and use their data in 2014.
Impact on Business Travel: Reporting will become increasingly important to managed
travel programs. Organizations may want visual examples of travel trends within their
individual programs. The necessity to capture all travel data (including travel bookings made
outside of a managed program, also referred to as “open bookings”, ancillary fees, and more)
will become even more important.
Trend: Increase in Mobile
In 2014, more people will have smart phones than traditional cellphones, and Blackberry
users will be forced to convert to other technology. More and more consumers will use their
mobile devices to browse for information, make purchases, share experiences and rate
products.
Impact on Business Travel: Look for big shifts to browsing and booking travel online.
Business travel vendors and suppliers will spend 2014 improving their brand’s presence in the
mobile marketplace. Meanwhile, consumers will look for apps and sites that remember their
preferences and allow them to find information and book easily on a smaller screen. Also,
look for a rise in last-‐minute reservations and travelers using GPS information to find
restaurants and entertainment convenient to their locations. We are entering the age of
instant—travel becomes here and now.
Trend: Growing Internal Communication
With work-‐at-‐home employees and offices scattered across the country (or the globe)
management may be placing added emphasis on in-‐person events. A boost to travel budgets
may inspire companies to get more social in an effort to generate new ideas and improve
cooperation between employees.


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Impact on Business Travel: Get ready for the meeting revival. Affordable meeting space
will be a coveted commodity in 2014. Moreover, organizations will want to make the most of
their meetings. Crowdsourcing tools for sharing, voting, and more will become even more
popular, mobile apps will be widely used to connect attendees, and post-‐meeting attendance
and participation analysis will be even more important.
Trend: Gamification
Gamification is the trend of applying game mechanics (challenges, points, levels, and leader
boards) to encourage frequent use, engagement, loyalty and brand advocacy, and consumers
and employees will begin to see it frequently in 2014. Internally, organizations will be testing
to see if gamification can improve productivity among their workers and help them adapt to
new technology and policies faster.
Impact on Business Travel: In previous years, most organizations were focusing on Visual
Guilt and penalizing travelers when it came to non-‐compliant travel booking. But recently
some organizations have begun to experiment with gamification and rewards in an attempt to
reduce leakage and curb bookings made outside a managed program, so it’s likely that
employers will be looking for ways to recognize and reward in-‐policy travelers in 2014.
Trend: Duty of Care
Duty of Care will be essential for organizations in 2014. In the case of a lawsuit, an
organization must be able to demonstrate that Duty of Care was present in order to not be
liable. The requirements for Duty of Care are different in every state, but regardless of their
location, employers will be working on defining and communicating their safety and security
practices during 2014.
Impact on Business Travel: Employees traveling work face increased risk, and yet, this
group is notoriously one of the most difficult to manage in terms of safety. In 2014, many
organizations will try to refine their Duty of Care policy, leaning on new technology to track
travelers, as well as disruptive events, to keep their travelers safe and out of harm’s way.
Trend: Focus on Loyalty Programs
Experts estimate that there are over 2.7 billion loyalty memberships that exist in the United
States today. With the average American household tied to 22 loyalty memberships—
suppliers are vying for a share of these loyal consumers. And while suppliers and vendors have
always recognized the value of return and existing customers—in 2014 there will be an
increased emphasis on how to keep customers loyal in an increasingly digital world. Expect
suppliers to be reaching out even more to their brand-‐loyalists during 2014. Companies
recognize that it’s going to be difficult to advertise to new customers in the mobile
marketplace, and they are likely to focus on keeping their current customers happy and
interacting with the product through multiple channels.
Impact on Business Travel: Experts questioned the importance of loyalty to business
travelers during 2013, and most found that travelers were just as likely to follow a good deal
as they were to stay loyal to a particular brand. Traveler loyalty will be in the spotlight in 2014
as brands compete against third party booking websites and apps. Suppliers will work to make


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brand loyalty easier for participants, and it’s likely that many will introduce apps in 2014 as
well as a gamification element to their loyalty program.

North America Outlook 2014
Domestic Business Travel is good.
Some Industries to Increase Travel Spending in 2014?
As the aforementioned data shows, business travel in the United States is expected to grow in
2013. Travel in the Real Estate industry is expected to gain a major boost from the recovering
housing market, along with the Construction industry, which is also getting a being aided by
the improving economy. The Global Business Travel Association projects these two large-‐scale
industries will experience some of the most substantial growth over the course of the next
five years, increasing their business travel spend by about 7-‐9%.

Meanwhile, the Education sector is projecting rapid growth as well. The World Youth Student
and Education Travel Confederation revealed that education-‐based student travel spend has
increased by 40% since 2007. The way students travel has changed recently as well; they are
staying longer than before abroad, with the number of trips over 60 days has also increased
during the past 5 years. This reflects a larger trend of students travelling for more purposeful
reasons such as internships, service projects and school/university sponsored educational
experiences. (Note that students traveling purely for vacation and leisure has fallen from over
75% in 2007 to just 47% today.)

Another industry with a fast emerging business travel market is Manufacturing (specifically
rubber, plastics and paper products). This trend is in line with the Manufacturing industry
itself, which has recently experienced growth attributed to a fall in energy prices. There are
also veteran travel industries, Professional, Finance, Food Service, Social Services, Utilities,
Equipment Rentals, Transportation Services, and more that will increase their travel spend
during the next few years. Other industries, such as Agriculture, Forestry, and Printing and
Publishing are expected to have a lower travel spent. Government typically has the highest
actual travel spend of any industry, but may curb the amount of they travel in 2014, with
major departments such as Defense and Human Services announcing that they will try to
reduce travel during the upcoming year.
Airline Travel
Travel Leaders Data: Airline
Travel Leaders Group data shows that domestic air prices increased steadily throughout 2013,
and this trend is likely to continue into 2014.


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First/Business Class
The Travel Leaders Fall Survey found a 4.6% increase in the number of business travelers
booking first class or business class tickets during 2013. The majority of business travelers still
fly coach. The top reasons cited by Travel Leaders Group's survey for why a business traveler
would fly Coach Class are “company policy” (52.6%) followed by “cost” (43.1%). In 2012, this
Travel Leaders trend was reversed – “cost” (50.6%) followed by “company policy” (44.3%).
This reversal indicates that while the business travel marketplace is becoming healthier
financially, policy creation and enforcement had a major impact on travel bookings during
2013, a trend likely to continue in managed programs during 2014.

Routes
Delays
According to Travel Leaders Group’s annual survey, the #1 concern for business travelers was
delayed flights—with almost 90% of recipients indicating that this was a major concern. There
is some reason to worry. During 2013, over 20% of flights were delayed by at least 15 minutes
$370
$367
$393
$411
$400
$395
$424
$444
$412
$405
$417
$443
$443

3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
2014+

Air ATP
$367

$395

$405

2010
2011
2012
2013
2014

Quarter
4
Airline
ATP

$389

$411

$444

$443

2010
2011
2012
2013
2014

Quarter
2
Airline
ATP

$362
$393
$424
$417

2010
2011
2012
2013
2014

Quarter
1
Airline
ATP

$370

$400

$412

$443

2010
2011
2012
2013
2014

Quarter
3
Airline
ATP


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AirTranDelta Southwest United American JetBlue
85% 82% 80% 78% 75% 74%
FAA Data ranging from August 2012-‐August 2013
Percentage of Flights On Time by Carrier
in the United States. Nationally, the most common causes for delays were Aircraft Arriving
Late (8%), Air Carrier Delay (6%), National Aviation System Delay (6%), Cancellation (1 %), and
Extreme Weather (0.5%). While most delays cannot be avoided, data from the Federal
Aviation Administration indicates that some carriers have a better track record than others
when it comes to flights leaving on time.

Increase of Fees on the Horizon
The projected ancillary fee revenue for airlines in 2013 is over $27 billion.

The next generation of baggage fees may not look like ancillary fees at all. United Airlines
recently rolled out a baggage plan that offers customers the option of an annual subscription.
For $349 a year, a traveler can check one standard bag per flight—the equivalent of about 13
checked bags a year on United. While individual travelers will have to weigh the benefits of a
baggage subscription, this new prepaid baggage fee is probably part of a new trend appearing
in 2014: re-‐bundling.

Top 6 Ancillary Purchases Among U.S. Travelers
% Purchased Alaska Allegiant American Delta Southwest Spirit JetBlue United
Inflight Meals,
Snacks and drinks
40% $6-‐$8 $2-‐$13 $3.29-‐$10 $3-‐$10 $3-‐$5 $1-‐$15 $6 $2.69-‐$10
Preferred Seating 24% N/A $4.99-‐$24 $4-‐$159 $40-‐$180 N/A $12-‐150 $10-‐$90 $9-‐$299
Inflight
Entertainment
23% $6-‐$14 N/A $3.99-‐$14 $6 $5 N/A $5.99 $7.99
Priority Boarding 23% N/A $5 $9 $10 $12.50 $1-‐$50 $10 $9-‐$59
In flight Wi-‐Fi
(Domestic)
19%
$14 per
day
N/A
$14 per
day
$14 per
day
$8 per day N/A
Coming
soon.
$14 per
day
Airport Lounge
Access
17% N/A N/A
$50 per
day
$50 per
day
N/A N/A $25
$50 per
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Bundled Fees
Unbundled
(Ancillary) Fees
Re-Bundling
Fees?
16.30%

15.70%

15.40%

15.00%

12.80%

8.40%

5.10%

4.10%

2.50%

2.40%

2.30%

Delta

United

Southwest

Other

American

US
Airways

Jet
Blue

Alaska

ExpressJet

AirTran

SkyWest

Percentage of Domestic Marketshare

Re-‐bundling Trend
Ancillary fees have become the new norm for airline passengers. In 2014,
airlines may begin to offer bundled packages again—advertising ancillary
fees as “extras” included in the cost of higher-‐priced tickets. In other words,
now that travelers have grown used to paying the price of fees, airlines
are likely to recognize that re-‐bundling will be an effective way to
market multiple upgrades. We saw glimpses of this trend in 2013 when
American Airlines introduced Choice bundles, allowing passengers to pay
$68 extra for a ticket, which would give them the option to change flights
without a change fee (typically $150-‐$200). More recently, Delta
introduced a $199 Smart Travel Pack that includes a checked bag, priority
boarding, access to preferred seating, 20% more bonus miles and the option
to upgrade to economy comfort for half price. Overall, re-‐bundled fee packages
will have to be examined closely by travelers and travel managers. The concept of
re-‐bundling fees could potentially be attractive to travel managers as well, as airlines have not
made it easy for travelers to report additional fees and upgrades in the past. The return of
bundled airfare could potentially help organizations predict traveler spend and track T&E
more effectively.

Furthermore, in order to draw more travelers into their frequent flyer programs, Airlines are
likely to use ancillary waivers to draw in loyal customers during 2014.

Market Share
Fees, service and ticket prices can
are all tied in to airline marketplace
environment itself. As you can see
from the chart on the right, four
major airlines (pending the
American Airlines/US Airways
Merger) control almost 70% of
industry. 2014 will reflect this
rapidly shrinking marketplace—
driving up prices and eliminating
options.
American
Airlines
Merger

A year ago, the American Airlines
merger with US Airways seemed to be progressing as planned, but an antitrust lawsuit has
stalled the process—meaning this merger will be a major focus (again) at the beginning of


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2014. The Department of Justice has asserted that the merger could potentially lead to higher
fares and fees for customers and reduce competition on over 1,000 domestic routes, while
the airlines have argued the merger is necessary to compete in an industry that has thrived on
consolidation in recent years. The trial will begin at the conclusion of 2013, and by January of
2014, the merger will be either approved or denied. Because the Justice Department has
allowed previous large-‐scale airlines mergers to go through (Delta and Northwest in 2008;
Continental and United in 2010) many speculate that the merger will go through as planned.
However, these previous cases might also give American a disadvantage, as the DOJ has
already begun to track how much fares increased after each of these mergers. No matter the
outcome of the case, it’s unlikely that individual consumers will experience a dramatic impact
during 2014, but the case will set an important precedent for the U.S. travel industry during
the next few years. Should the merger be unsuccessful, other upcoming industry mergers are
likely to receive the same strict scrutiny and may be halted by the same government antitrust
laws. But should the merger to create the world’s largest airline succeed, the industry can
count on a continuing culture of mega-‐mergers and conglomerates influencing the price of
travel in years to come.

Lodging
In 2014, hotels will be a seller’s market, and prices are expected to rise steadily. Occupancy
rates remain extremely high. Business Travel News reports that travelers can expect an
average occupancy rate of 62% at domestic hotels in 2014—and this percentage can often
rise to 80% or more in key business travel markets. With no shortage of demand, it is unlikely
that hotel prices will drop before the conclusion of 2014.

Travel Leaders Data: Hotel
Hotel Average Nightly Rates (ANR) have swelled in the United States since the beginning of
2013. The high occupancy rates we mentioned earlier have gradually driven up prices. Relief
may be in sight. With the effects of the recession subsiding, new hotel properties are in
planning and many are already being constructed. In the future, the introduction of new
properties is likely to curb occupancy rates and drive down ANR costs. However, this is
unlikely to take place during 2014, so it is expected hotel rates will continue to rise-‐-‐especially
in key city business markets.


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Even with the rising rates, we are unlikely to see drastic changes in terms of ANR during 2014.
Many economists point out the healthy competition that still exists between numerous hotel
brands. Unlike the airline and rental car industries, where a handful of brands control the
majority of the domestic market, the hotel industry is less consolidated—which can work in
favor of the consumer in 2014. This abundant competition between large numbers of
hoteliers and the transparency of the internet is likely to keep actual rate growth steady
during 2014.
Hotel Fees, Extras and
Upgrades
United States hoteliers will collect 2.1
billion in ancillary fees in 2013, more
than ever before, and this trend is
expected to roll over into the next
2014. Because travelers can now
easily see and compare nightly rates
online, hoteliers may push to squeeze
What new hotel fees can you look for in
2014?
• Basic Internet—and an a new upcharge for high-‐
speed Internet
• Gratuity frees for housekeeping built into the bill
• Upgrade to a better view
• Allergy friendly rooms
• Upcharge for smoker-‐friendly rooms
• Resort fees
• City-‐based taxes used to fund local projects
$133

$140

$141

$144

2010
2011
2012
2013
2014

Quarter 2 Hotel ANR
$128

$135

$138

$140

2010
2011
2012
2013
2014

Quarter 1 Hotel ANR
$134

$140

$140

$144

2010
2011
2012
2013
2014

Quarter 3 Hotel ANR
$134

$139

$140

2010
2011
2012
2013
2014

Quarter 4 Hotel ANR
$128

$133

$134

$134

$135

$140

$140

$139

$138

$141

$140

$140

$140

$144

$144

1Q10
2Q10
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4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
2014+

Hotel ANR


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revenue out ancillary fees, which are not nearly as visible to travelers browsing the web or
booking over the phone. What’s more, some cities also impose heavy hotel and tourism taxes
that cannot be avoided by hotel properties.

Another reason hotel ancillary fees are succeeding is a shift in traveler behavior. As with
airlines, travelers are quickly becoming accustomed to some of the most common fees. In-‐
room Internet, for example, is no longer considered a luxury. Many travelers view Internet
access an absolute necessity, and they are more likely to pay a fee than go without.

It seems that corporate travelers are becoming increasingly inclined toward upscale
properties as well. Travel Leader’s Fall Survey indicated a 3.5% increase in the number of
business clients staying in either “luxury” or “upper upscale” hotel properties while traveling.

Mobile Hotel Bookings
Hotels are currently the most popular business travel commodity that travelers are
purchasing via mobile technology and the number of bookings continues to grow.
PhoCusWright has projected that as many as 20% of all hotel bookings will be make via mobile
app during 2014. The popularity mobile hotel shopping is tangibly linked to last-‐minute hotel
bookings. The majority of reservations made via mobile are for the day that they were
booked; indicating that travelers are becoming increasingly comfortable with unplanned
travel.
Ground Transportation
While bikes, trains and other transportation trends increased in popularity during 2013, rental
cars will be the main focus of business travelers during the upcoming year. The rental car
industry today generates about $24 billion in the U.S. Three major rental car companies (Avis,
Enterprise, and Hertz) own nearly 80% of the car industry and have kept rates steady for most
of 2013. Therefore, if one of these companies raises rates or adds new fees, the other
companies may match the rates in a very short amount of time. Conversely, if other
companies do not jump on board with new rates or fees, the outlaying company is likely to
drop them altogether.
Travel Leaders Data: Car Rentals
Car rental prices have been declining steadily since 2011, and according to Travel Leaders
Group data, 2013 was a great time to negotiate car rental agreement, as rates were at a
three-‐year low. The introduction of car sharing programs, hourly rates, business loyalty
programs and consistent fuel prices have all contributed to keeping Average Daily Rates (ADR)
low. Industry veterans know rates can stay low forever, and it’s likely that when they do begin
to rise—it’s likely they’ll do so all at once.


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$45

$45

$43

2010
2011
2012
2013
2014

Quarter
4
Car
ADR

$45
$46

$44
$42

2010
2011
2012
2013
2014

Quarter
3
Car
ADR

$45

$45

$43

$42

2010
2011
2012
2013
2014

Quarter
2
Car
ADR

$45

$45

$43

$42

2010
2011
2012
2013
2014

Quarter
1
Car
ADR

$45

$45

$45

$45

$45

$45

$46

$45

$43

$44

$43

$43

$42

$42

$42

1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
2014+

Car ADR
Revival in Rail Travel
During 2013, Amtrak set its 11th
ridership record in 10 years, with more than 31.6 million
riders. A third of these passengers can be attributed a small portion of the Northeast corridor,
which includes New York, New Jersey, and perhaps most importantly, the high speed Acela
Express service—which is 70% business travel.

Even though historically the majority of business travelers opt for rental cars or flying, Amtrak
has consistently added new perks to their routes to appeal to corporate travelers and
commuters. Notably, Amtrak has been working equip as many trains as possible with
AmtrakConnect Wi-‐F. They’ve also scrapped most baggage fees, security hassles and long wait
to appeal to business travelers.

There are some perks that are uniquely Amtrak as well. For between $5 and $10
Amtrak passengers can now bring their bicycle on board with them, saving them
the effort of checking it along with heavier passenger luggage. While this
certainly appeals to avid bicyclists and leisure travelers, it’s also likely that
Amtrak considered the 47% increase that bike-‐to-‐work traffic gained in the
United States over the course of the last decade. Amtrak may be banking on the likelihood


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Source: Business Travel News/PhoCusWright
**Percentages represent Hotel/Air/Car Rental provided sources
only-‐-‐no third party apps.
5%
7%
5%
15%
20%
16%
0% 5% 10% 15% 20% 25%
Airline
Hotel
Car Rental
Projected 2014 Percentage Rate
Actual 2012 Percentage Rate
Percentage of Travel Booked via Mobile Device
that some business travelers may want to take their bike with them on the road, and
compared to airlines, which charge between $50 and $200 to check a bike, Amtrak would
have a clear advantage.
Meetings
Meeting demand will continue to experience modest growth during 2014. In a survey
conducted by the International Congress and Convention Association (ICCA), 30% of
organizations reported that they would running more meetings in 2014 than in 2013, and 47%
were projecting higher attendance. Less than 7% of respondents said they were planning
fewer meetings, and just 9% predicted their attendance would be lower.

While these numbers indicate that positive
growth is expected, there are still many
financial hardships slowing down meeting
growth. Much of the problem is looped in
directly with rising hotel costs. Because of the
high occupancy rates in many key business
markets, meeting planners may need to get
creative about the location and dates of these
events during 2014.
New Meetings Technology
Meetings apps will be essential during 2014. While apps have already been useful when it
comes to posting itinerary, maps and other essentials, in 2014 meeting planners will push to
make these apps more interactive.
They will be soliciting feedback,
polling the audience, sending out
instantaneous updates and more. In
an effort to make the most of
meetings and conferences, some
organizations are experimenting with
mobile Gamification and reward
techniques to keep their attendees
fully engaged. These sorts of ideas
generally involved scoreboards,
trivia, checkpoints and other gaming
features, which organizers hope will
motivate attendees to stay more
active and focused during an event.

Top Meeting and Convention Destinations
1. Orlando, FL 6. New York, NY
2. Chicago, IL 7. Washington, D.C.
3. Las Vegas, NV 8. Dallas, TX
4. Atlanta, GA 9. Miami, FL
5. San Diego, CA 10. Phoenix, AZ
-‐-‐CVENT Supplier Network


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Mobile Technologies
There is a reason many companies are scrambling to rein in their travelers’ mobile bookings.
One of the fastest growing trends in the business travel market, mobile booking worldwide is
projected to top $26 billion dollars in 2014—up from $8 billion in 2012. Travelers will almost
certainly be more likely to book travel via a mobile device in 2014, and hotel, car and airline
suppliers will be scrambling to find new ways to appeal to mobile users. In additional to
mobile purchases, mobile loyalty and frequent traveler programs will also become popular in
2014.
Late Adapters
With all the attention mobile travel has recently received, it’s easy to forget that many
travelers do not opt for mobile travel options. And while mobile is here to say, studying the
reasons why some travelers do not follow their tech-‐savvy colleagues can predict some of the
enhancements we are likely to see in 2014. Mobile websites that are not compatible with
small screens, apps that don’t work consistently, and any un-‐user-‐friendly apps or website will
lose market share quickly. Apps that remember profile and billing information, require
minimal typing and update seamlessly will quickly rise to the top.
Mobile Policy
While individual travelers have been quick to embrace mobile technology, many companies
have been slow to adapt it into their travel policy or make it a part of their managed travel
program. According to Business Travel News, only about 20% of companies have a mobile
policy in place for their travelers. This means that during 2014, many companies will opt to
add clauses about mobile booking and secure app use to their travel policies.

Security
Automation
Security
Lanes

With the splash TSA PreCheck made in 2013, it’s not surprising that other security clearance
programs have appeared in airports across the United States. CLEAR is a privately owned
company that was recently reintroduced into five major airports. CLEAR disbanded in 2009 in
the midst of the economic downturn, but in 2013 it returned with new management. CLEAR
automates the identity check process by scanning a member’s fingerprints and irises. Similar
to PreCheck, CLEAR allows members to bypass the regular security lines in favor of a
designated lane or simply moving directly to the front of the line. Frequent flyers in Orlando,
Denver, San Francisco, Dallas, and Westchester may have formed some loyalty with the CLEAR
brand before it went bankrupt in 2009, and therefore may want to return to the program.
Unlike TSA PreCheck, CLEAR is guaranteed with every flight, and it may be a good solution for


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Level 3:
Weapons; Life-‐
threating behavior
Level 2:
Physical contact
Level 4:
Breach of Flight
Deck
Level 1:
Verbal or written
threats
Level of Threatening Behavior
airports that do not have TSA PreCheck lanes. However, TSA PreCheck continues to grow its
customer base and add new locations. More importantly, CLEAR charges $179.00 for an
annual membership (twice as expensive as enrolling in TSA Precheck for five years). So while
CLEAR has announced an expansion to a handful of new airports, it’s uncertain if CLEAR or any
other new airport security programs will survive in the shadow of TSA PreCheck.

The popularity of TSA PreCheck might ultimately be what opens the door for competitors. The
TSA itself continues to flaunt the effectiveness of the program. In late 2013, they announced
plans to implement PreCheck operations at 350 U.S. airports by mid-‐2014, more than tripling
the current number of PreCheck locations. Travelers (over 15 million of them) have also
flocked to the service, which boasts
shorter security lines and allows
frequent travelers to keep their
shoes, belts and jackets on and
their liquids and laptops packed
in their carry-‐on. However, the
attractiveness of PreCheck diminished near the conclusion of 2013, when travelers began
reporting a handful of TSA PreCheck lanes where the lines were longer than the traditional
security checkpoints. Other travelers began to question how useful PreCheck could be when
so many people were using it. 2014 will test PreCheck’s success, and determine whether or
not the program will continue to grow—or simply grow beyond its means.
Liquid
Scanners

The TSA’s newly purchased Bottle Liquid Scanner (BLS) units will make their debut in 2014.
These units can scan and identify hazardous liquids in sealed bottles within 20 seconds. The
units will be used primarily to screen medically necessary liquids in quantities larger than 3.4
ounces.

Personnel
While the TSA has long been the target of unhappy consumers, and, in
2013, a new report was released by the GAO (U.S. Government
Accountability Office) that publicized approximately 9,600 cases of
employee misconduct on the part of the TSA over the course of three
years, a growth rate of 26%. Violations ranged from sleeping on the job to
theft, unauthorized security clearance for friends and family, to not
showing up for work. The TSA also hired about 3,200 airport-‐assigned
employees during that time. The TSA has accepted the recommendations
of the GAO, so efforts to effectively train employees evenly throughout
the system may be more apparent in 2014.

2014
350
U.S.
Airports
2013
97 U.S.
Airports


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30% of surveyed
Americans admitted
to accidentally leaving
a PED turned on
during a flight.

—Airline Passenger
Experience Association
(APEX) and the Consumer
Electronics Association
Please note, TSA employees weren’t the only ones behaving badly. According to a report
issued by Airlines for America, record passenger numbers are translating into a high incidence
rate of passenger misconduct. The most common offenses? Excessive alcohol consumption
before or during a flight was the most prevalent offense by a wide margin. Smoking violations
and failure to follow crew instructions pertaining to carry-‐ons, seatbelts, PEDs, or pets were
also popular. Threatening behavior was also widely reported. However, about 75% of all
reported “threatening behavior” incidents were Level 1, while the remaining quarter of
incidents fell into the more serious Level 2. A fraction of incidents were classified as Level 3.
It’s difficult to say if episodes passenger misconduct will rise or in 2014. While the FAA and
TSA have both relaxed certain policies to an extent, the effect it will have on passenger
behavior is still unknown. Personal Electronic Devices, for example, have been cleared by the
FAA for gate-‐to-‐gate usage, which should cut down on the number of PED-‐related violations;
however, opponents to the policy changes suggest they could also inspire passengers to
further test the system—resulting in more passenger misconduct.

Personal Electronic Devices (PEDs)
Throughout 2013 there were clues that suggest the FAA relax policies regarding the use of
personal electronic devices aboard planes, and in October of 2013, the change finally arrived.
The FAA has that passengers can safely use PEDs during all phases of
flight, and they have provided airlines with implementation
guidelines for making the change. By the beginning of 2014, travelers
are expected to be able to use devices in airplane mode from take-‐
off to landing.

The new rules allowing PEDs do not
apply to cell phone calls, which are still
prohibited. About 10% of travelers will
be disappointed by this news. The
majority of travelers do not want voice
phone conversations to be permitted
during flights. In one 2013 survey conducted by Travel Leaders, almost 80% of travelers said
they did not want their fellow passengers to have phone conversations in flight.

Global Trends
The United States leads the globe on business travel spending. However, many other
countries, namely China, continue to garner attention for their own rapidly expanding
corporate travel industries. Pay special attention to the The BRIC (Brazil, Russia, India, China)
nation, as they continue to spend at a much faster rate that veteran business travel markets.
Three of the BRIC countries are already in the Top 10 Business Travel Market, and Russia,
which did not make the list of top 10 is ranked 13th
in the world.
of
travelers oppose
inflight phone
conversations.


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Travel Leaders Data: International Ticket Prices
Outlook for the Europe Region 2014
Overall, Europe will have some of the most modest growth in
2014. Economic uncertainty is likely to drive down prices, as well
as corporate traveler traffic. Still, with the highest number of
countries—Germany, France, Italy and the U.K.—on the list of the
10 business travel marketplaces, Europe should not be counted
out in 2014—though it may be outshined.

Air
Transportation

Ultra-‐low cost, no frills airlines were popularized in Europe over
the past two decades. But customer pushback and the introduction of new competitors have
forced even the most back-‐to-‐basics airlines to rethink their business plans. For example,
Ryanair responded to sinking share prices and customer complaints by adding assigned
seating to their boarding process. This move ended the universally hated scramble for seats,
and demonstrated that even the carrier with the highest passenger count in Europe is willing
to compromise their policies to please customers. However, Ryanair, like many other carriers
continues to grapple with weather or not price or perks are more important to the customers
buying tickets in the low-‐cost marketplace. While Ryanair generally still boasts the lowest
prices in Europe, it’s loosing considerable ground to competitors like easyJet, which offers
perks such as business class packages, speedy boarding and seat selection tools.
Hotels
The European hotel marketplace is weak compared to the rest of the globe. Lower occupancy
rates in some cities will generally translate into lower prices. This could inspire a shift in
meeting space and large group events to this region, as many organizations will be eager to
take advantage of bargains.
One trend European trend that is catching on is coupling rental car services with mobile Wi-‐Fi
hotspots. Hertz Corp. now provides the option of mobile hotspots along with vehicles at most
of their German airport locations, and they recently became available in Italy and Spain. For
an average daily rate of $13, the portable Wi-‐Fi units are designed to provide travelers with a
prepaid Internet access, which can help them avoid fees that may apply in hotels or other
venues. Also important to note: the units support up to eight devices at once—a perk for tech
savvy travelers, who often travel and use multiple devices simultaneously.
BRIC
Report:
Russia

Russia is the lowest ranking BRIC Nation, but it’s about to get a major boost in 2014 thanks to
the Sochi Winter Olympics. In preparation for this event, over 25,000 new hotel rooms have
been added in the region. Following the Olympics, Russia is likely to become a hotbed for
Top 10 Business Travel Markets
(in Billions)
1. United States $262
2. China $196
3. Japan $65.2
4. Germany $50.5
5. United Kingdom $40.2
6. France $35.7
7. Italy $32.7
8. South Korea $30.5
9. Brazil $30.1
10. India $22.1
GBTA


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resort developers and hotel investors, who can inexpensively take advantage of new
properties.
Outlook for the South America Region in 2014
BRIC
Report:
Brazil

Brazil currently ranks 9th
in total business travel spend, with just $30 billion dollars recorded in
2012. However, in 2014, Brazil is poised for double-‐digit growth in the business travel
marketplace. This will be aided by a healthy economy (projected to grow by 3.5% GDP in
2014) and a handful of major multinational events set to bring visitors and revenue to
Brazilian soil. The 2014 FIFA World Cup, which will take place in 12 Brazilian cities, is slated to
sell over three million tickets. For the Rio Olympics in 2016, about 7 million tickets will be sold.
These major international events have also sparked a boom in the business travel industry, as
a significant number of inexpensive airline routes, hotel rooms, transportation options and
meeting spaces are being created at a rapid rate.
Outlook for the Asia/South Pacific Region in 2014
BRIC
Report:
China

China is a shining star in the business travel marketplace, and will be a major focus during
2014. China ranks second in worldwide business travel, spending $196 billion annually (75% of
what the United States spends each year). Experts project that China will overtake the United
States to claim the #1 spot over the course of the next three to five years. This boost to the
Chinese business travel marketplace can be attributed to impressive GDP growth, projected to
increase by 7% during 2014.

BRIC
Report:
India

India’s business travel marketplace has not gained as much attention as its sister BRIC
countries, but GBTA predicts it will be the fastest growing business travel market by 2015. In
2014,

Air travel
India bus routes
Another shift from in passenger traffic from airplanes to bullet trains has been dramatic.
According to statistics, China ranked #1 in flight delays with 25% of flights departing from late.


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Group,
LLC

Sites:
Hotel Occupancy:
http://www.businesstravelnews.com/Hotel-‐News/U-‐S-‐-‐hotel-‐occupancy-‐this-‐year-‐will-‐reach-‐
its-‐highest-‐level-‐since-‐2007/?ib=Hotel%20Chains&a=proc&cid=eltrDaily

Loyalty Memberships per Household
http://www.fastcompany.com/3013116/creative-‐conversations/deliver-‐an-‐experience-‐that-‐
matters-‐3-‐steps-‐to-‐creating-‐lasting-‐loyalt
https://www.colloquy.com/files/2013-‐COLLOQUY-‐Census-‐Talk-‐White-‐Paper.pdf

Bike to work:
http://www.governing.com/gov-‐data/bike-‐to-‐work-‐cities-‐data-‐map.html

Delta fee:
http://www.usatoday.com/story/todayinthesky/2013/08/13/delta-‐airlines-‐fare-‐
increase/2650463/

TSA Misconduct
http://www.gao.gov/products/GAO-‐13-‐624

Hertz hotspots
http://www.autorentalnews.com/news/story/2013/08/hertz-‐expands-‐mobile-‐wi-‐fi-‐service-‐in-‐
europe.aspx

Travel in Education Sector:
http://thepienews.com/news/educational-‐travel-‐to-‐grow-‐dramatically-‐by-‐2020/

http://www.eturbonews.com/37726/wyse-‐hostels-‐have-‐overtaken-‐hotels-‐most-‐popular-‐
form-‐accommodati
Government Travel Spend
http://www.businesstimes.com.sg/premium/transport-‐hub/aviation/us-‐govt-‐defence-‐firms-‐
reining-‐travel-‐spending-‐20130909

Meeting Growth 2014
http://www.4hoteliers.com/news/story/11669

Avis raises prices:
http://skift.com/2013/03/08/rental-‐car-‐exec-‐is-‐very-‐happy-‐about-‐his-‐industrys-‐mergers-‐and-‐
rising-‐prices/


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LLC

Delta bundles:
http://www.forbes.com/sites/michelinemaynard/2013/09/13/delta-‐air-‐lines-‐rolls-‐the-‐dice-‐on-‐
a-‐199-‐bundle-‐of-‐fees/

BRIC: China
http://www.foxbusiness.com/industries/2013/08/12/top-‐5-‐business-‐travel-‐regions-‐in-‐world/

GDP Growth
http://www.forbes.com/sites/kenrapoza/2013/05/12/for-‐global-‐gdp-‐good-‐times-‐begin-‐in-‐
2014/

AA Merger/Trial
http://www.dallasnews.com/business/airline-‐industry/20130910-‐american-‐airlines-‐us-‐
airways-‐fire-‐back-‐at-‐doj-‐over-‐antitrust-‐lawsuit.ece

http://www.nytimes.com/2013/08/17/business/for-‐airlines-‐it-‐may-‐be-‐one-‐merger-‐too-‐
many.html?pagewanted=all&_r=0

Rio Olympics:
http://www.destination360.com/south-‐america/brazil/rio-‐de-‐janiero/olympics-‐tickets

Gamification
http://www.huffingtonpost.com/shawn-‐amos/watch-‐gamification-‐goes-‐m_b_3950834.html

Gamification Meetings
http://www.executivetravelmagazine.com/business-‐insider/meeting-‐matters/new-‐meeting-‐
trend-‐gamification

Mobile Booking
http://www.smartplanet.com/blog/bulletin/mobile-‐travel-‐bookings-‐to-‐reach-‐26-‐billion-‐by-‐
2014/30711

http://skift.com/2013/10/02/the-‐mobile-‐travel-‐habits-‐of-‐airline-‐passengers-‐worldwide/#!

Travel Leaders Inflight Phone Survey
http://www.prnewswire.com/news-‐releases/vast-‐majority-‐of-‐americans-‐say-‐no-‐to-‐cell-‐
phone-‐use-‐and-‐pocket-‐knives-‐inflight-‐according-‐to-‐new-‐survey-‐204098061.html

TSA Precheck Expansion
http://abcnews.go.com/Travel/tsa-‐pre-‐check-‐program-‐blasts-‐forward-‐rapid-‐
expansion/story?id=20580152


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LLC

http://www.nbcnews.com/travel/stuck-‐line-‐tsa-‐precheck-‐expansion-‐slowing-‐down-‐frequent-‐
travelers-‐8C11484578

Unruly Passengers:
http://www.faa.gov/data_research/passengers_cargo/unruly_passengers/

Travel Leaders Business Travel Report
http://www.travelpulse.com/travel-‐leaders-‐group-‐unveils-‐business-‐travel-‐trends-‐survey-‐for-‐
2013.html

Ryanair
http://skift.com/2013/11/04/falling-‐profits-‐force-‐ryanair-‐to-‐stop-‐being-‐such-‐a-‐cheapskate/

DOT Stats
http://www.transtats.bts.gov/homepage.asp

2014 Meetings Trends
http://www.corbinball.com/articles_technology/index.cfm?fuseaction=cor_av&artID=9136

Business Travel Insight2014(11-8-13)

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