European business travel barometer version anglaise 2013

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The 2013 edition of the European Business Travel conducted by Concomitance for American Express Travel. This research is proven to be a resource wealth for strategic planning, strategic marketing and sales !
Do not hesitate to look for the previous editions and the sister researches conducted by Concomitance in the other geographical areas (AmLat, Japan, China...)

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European business travel barometer version anglaise 2013

  1. 1. 1 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 EUROPEAN BUSINESS TRAVEL BAROMETER 2013 Prepared by Concomitance Group November 2013
  2. 2. 2 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Contents Executive summary.................................................................................................... 3 Methodology of the barometer .................................................................................. 4 Part 1: Economic trends and travel budget developments..................................... 5 Eurozone still in recession in 2013, slow recovery expected in 2014................................................. 5 Travel expenditure usually grows quicker than GDP .......................................................................... 6 Slow growth (+0.5%) in business travel expenditure in Europe.......................................................... 7 Investment or cost............................................................................................................................... 8 Expense category breakdown: a rebalancing...................................................................................... 9 Business travel motives..................................................................................................................... 11 Business travel priorities ................................................................................................................... 11 Budget optimization levers ............................................................................................................... 12 The importance of technologies ....................................................................................................... 14 Security more than ever at the heart of concerns............................................................................ 15 Travel agency services....................................................................................................................... 16 Part 2: the 4 profiles of travel expense management............................................ 17 Introduction to the 4 profiles of travel management....................................................................... 17 Limited control for low & short-distance trip volumes..................................................................... 18 Pragmatic control for a maximized short-term efficiency ................................................................ 19 Targeted and Global controls: 2 ways to manage more complex travel practices........................... 21 Travel management maturity is not fully connected from the travel budget size ........................... 26 Expected evolutions of these 4 typologies........................................................................................ 27 Part 3: Prospects for 2014 ....................................................................................... 28 2014 prospects: still more wait-and-see strategies, +0.8% growth forecast.................................... 28 This slight recovery of business travel should be coming from various regions............................... 29
  3. 3. 3 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Executive summary Economic trend in 2013 is slightly worse in Europe than expected at the end of 2012. Euro zone GDP is down 0.4pts, which is notably due to bad conditions in southern Europe and the Netherlands. Yet, organizations had well anticipated this trend and their travel budget has strictly followed their prospect of a +0.5% increase, which is a similar trend as in 2012. Business travel appears again more resilient than GDP. Same as last year too, this positive trend is pushed up by SME and national accounts, whereas global accounts still suffer from a drop in their budget. Travel budgets are rebalancing between main expense categories • Air budget is dropping under 40% of total budget, which is in line with a similar trend last year. Low cost carriers increasing share in business travel, as well as flat fares, explain this declining weight. Air remains #1 budget category; • Hotel budget is increasing in 2013 after its increase in 2012, and now represents ¼ of budgets; low cost offer has not yet convinced business travellers, and this also comes with an increase in rates; • Rail budget share is also increasing. Cost control is more than ever priority #1 for organizations • Almost 9 organizations in 10 quote it as a key priority for next year; this share is up 8pts from 2012 when it was already priority #1; • As a consequence, an even greater importance is awarded to best-buy practices, which become #1 optimization levers whatever the segment of organizations; • Advanced booking and online booking, formerly ranked #1 and #3, have dropped to #4 and #5 positions respectively. But indirect costs are more considered than in the past • Among the top 10 budget optimization levers, 3 are indirect-cost oriented: the upstream trip relevancy assessment (#2), the expense approval workflow optimization (#7), and the downstream expense management (#10). Last year none of them was part of the top 10 levers. • This evolution is to be linked with the higher declared need to get a complete view of travel expense: organizations are willing to gain maturity in their business travel management. Levels of maturity are not only linked with the budget size • Organizations maturity in business travel management is more a consequence of the complexity of their trips – especially when travelling to economically dynamic regions such as Asia of Africa – whatever the size of their budget. • The largest observed gaps between low and high maturity levels are mainly a matter of tool adoption (and especially process end-to-end automation), and travel agency usage. • Current trends in business travel tend to increase organizations need for a higher range of tools & practices.
  4. 4. 4 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Methodology of the barometer Almost 600 organizations have interviewed in this year’s edition of the business travel barometer. They represent more than EUR 1 billion of travel expenditure. They share between 3 categories: • Small and medium accounts (with budgets under EUR 250K) • National accounts (budgets between EUR 250K and 3M) • Global accounts (budgets over EUR 3M)
  5. 5. 5 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Part 1: Economic trends and travel budget developments Eurozone still in recession in 2013, slow recovery expected in 2014 Despite a more optimistic prospect last year, 2013 has been a new year of recession in Euro zone with GDP down 0.4% from 2012. Other Western economies (USA, UK, and Japan) are already on the way of recovery with GDPs increasing by rates between 1.4% and 2%. The world growth is still pushed up by India and moreover by China, with a +7.6% increase over last year. Prospects for 2014 are better, even for Euro zone where economic growth should be back (+1%). Most major economies are expected to know a better situation too, except in Japan where the growth should be down to 1.2%. Within Euro zone, situations are contrasted. French and German have maintained a positive economic trend, although with very small increase rates, while southern Europe and the Netherlands have experienced a decrease by 1% or more.
  6. 6. 6 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 expenditure usually grows quicker than GDP The volume of expenditure for the 3 main European countries (Germany, UK, and France) during this year grows by 2%, which is 1pt over their GDP growth.
  7. 7. 7 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Japan however shows an overall decrease of its travel expenditure (-4.2%) despite a positive economic trend. Regarding USA and moreover China, business travel expenditure continues to quickly grow, by 4.5% and 15.2% respectively. Chinese market has grown by USD 30 billion this year, which is equivalent to the entire French market. China should overtake USA as the first market globally by 2016. GBTA anticipates a stronger increase in business travel expenditure in 2014, with growth rates generally between 4 to 6% (from UK +3.7% to USA +5.9%), except in China where the market should keep growing by more than 15%. Slow growth (+0.5%) in business travel expenditure in Europe The barometer shows an average +0.5% increase in interviewed organizations’ travel budget. This is exactly the forecast that these organizations gave us last year. National accounts are driving the market with a +1.6% growth, while Global accounts see their budget drop by 0.8%. SME are close to overall average. Situations are contrasted between countries, with no real geographical trend. Spain is recovering from a strong drop last year, and organizations declare an increase of 5% in their budget. But, while in the same situation last year, Italy continues to suffer from a negative trend by 5%.
  8. 8. 8 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Other countries are usually close to stability, with Scandinavia and Benelux in slight decrease, and Germany, UK and France in slight increase. Most organizations actually stabilized their budget. This trend already observed in 2012 is confirming this year, with the same share of organizations (2/3) showing a flat trend. The share of growing budgets (23%) is still above the dropping ones (14%) which allows the market to remain positive. When they grow, budgets grow by an average 13%, which is comparable with last year. However when they decrease, they do it by more than 18% instead of 16% in 2012: these organizations suffer from bigger difficulties. This average drop remains however comparable with the average raise of rising budget, which also allows the market to be positive. Investment or cost 27% of companies estimate that business travel is an important investment to their development This percentage is higher than last year, when only 23% of the respondents shared this assessment. Even if these organizations remain a minority to those who consider business travel a cost, the share seems to be on a mid-long term positive trend.
  9. 9. 9 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Global accounts are the most disposed to consider business travel an investment, with 28% of them vs. 27% of SMEs and 25% of national accounts. Interestingly, the share of undecided organizations continue to fall year after year. It was 7% in 2011, then 4% last year, it is now only 2%. Whatever the perception, business travel is more and more a central issue in organizations. Business travel is becoming a means to support or guide the growth of all businesses. Purchasing behaviour are no more related to the only size of their travel budgets. Travel agencies seem to play a role in this perception, as only 24% of organizations not using any agency consider their business travel expenditure an investment, against 27% of those using 1 agency, and 30% when using several. When they use a TMC rather than a pure online agency, the share is higher. Expense category breakdown: a rebalancing Air budget now accounts for only a big 1/3 of total budgets. This is one of the main assessments this year: while they still weighted 50% of budgets 2 years ago, air expenses have dropped to less than 40% in 2013. Although they remain the largest expense category, the change is significant. In the same time, hotel expenses have grown by 4pts in the last 2 years, reaching almost ¼ of total expenses. To be noted, this share is very stable from one organization to another whatever its size, at the opposite of air expense which weight in the budget largely fluctuates.
  10. 10. 10 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Other expense categories are on a positive trend compared to 2011 (even if 12-month trend is either positive or negative). Rail expense has grown the highest, with +6pts. Several reasons explain this situation: • The main reason is related to the air supply with the rise of low cost airlines including Transavia, Air Berlin, but also Iberia Express & Easyjet. In total, for the respondents this year, the low cost airlines represent 26% of spending, even to represent 34% in the UK. The trend is unlikely to step back as business travel is one of LCCs’ way of development. Ryanair and Easyjet have recently taken measures in this direction, whether by reinforcing their corporate travel teams, or by adapting their offer. • The weight of rail should be mentioned too. The expansion of intra- European high speed lines should, in the future, strengthen this mode of transport. • With regard to the hotel budget, while the "entry level" hotels offer has not convinced the business yet, the market for three-star hotels or more represents 80% of the accommodation budget. The only four-star hotel segment accounts for 25% of budget hotels. • In addition, most major hotel chains open new hotels in Asia and relatively few in Europe. The stability of supply exerts upward pressure on the price of rooms. As a matter of fact, the American Express Global Business Travel Forecast 2014 announces a stability in air travel rates in 2014, and an increase of hotel rates between 0 and +5%. • Finally, expense categories other than air have been better monitored for a few years, which also contributes to make them more visible.
  11. 11. 11 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Business travel motives Clients and prospects remain the main business travel motive by far 46% of expenditures are devoted to the development of client assets. This share remains stable as the main motive, by far. The importance of client/prospect meetings also appears in the evolution of the MICE budget, with a breakdown between internal and external meetings more and more in the advantage of external meetings. They now account for ¾ of all MICE expense, vs. less than 60% in 2012. Intra organizations trips remain the second motive for business travel, accounting for 27% of expense. This share is increasing. Business travel priorities Cost control is organizations’ top leading priority After the rebalancing of budgets, this is the second strong teaching of the barometer. Cost control is the priority for 87% of interviewed organizations, against 79% in 2012. This is a very strong trend already seen in the past years, which confirms this year.
  12. 12. 12 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Cost control relates to all expenditure categories (including air & hotel); surveyed companies also indicated that these categories should be managed more accurately than last year. Highlight for 2013, they are 64% to consider that their travel expenses can be optimized. Traveller safety is gaining importance in organizations, and is now ranked priority #2. 64% of interviewed companies quote it. It was priority #3 last year. Control of the value chain is now listed as a top priority, especially for reasons related to the consolidation of expenses. It is ranked #3 this year, while #4 last year. This rise also results from the best-buy extension, which tends to multiply suppliers and restricts expense consolidation. Budget optimization levers To achieve this cost control goal, organizations firmly turn to best-buy lever In line with its increase in organizations’ practices last years, best buy has become their preferred lever of budget optimization. Three main reasons can explain this situation: • Many companies consider that rate negotiations with suppliers mostly act as a guarantee against price increase, not as a guarantee to the lowest price; • The surge of low cost airlines obviously plays a key role in this new European dynamic; • Online corporate booking tools can be configured to display rates according to customer’s choice, including best buy offers.
  13. 13. 13 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Surprisingly, the second lever in importance is the upstream assessment of trips, which acts on indirect rather than direct costs. When considering that the improvement of expense approval workflow comes #7, this is the first time that we observe such a presence of indirect cost levers in the top 10. This is a highlight this year, levers acting on indirect costs are increasing. Companies provide themselves with the means to better control their spending upstream and downstream of the value chain. Some of them even go beyond and put in place systems to assess the relevancy of their trips before they are initiated, and measure their total cost. Organizations have gradually shifted from a cost-cutting practice to a more business-oriented strategy where trip relevancy is assessed. Unused ticket monitoring is ranked #3 by interviewed organizations; this lever is often underused by organizations, which could explain why they consider it a lever to increase the usage of. Advanced booking and online booking, levers #1 and #3 for European organizations in 2012, have dropped to #4 and #5 positions respectively. This could result from the fact that these practices are now well established in organizations, which make them less likely to drive significant new savings.
  14. 14. 14 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 importance of technologies The search for control lead organizations to acquire technologies. This equipment concerns the full value chain. This is a deep-rooted trend: buyers clearly make the choice of managing their movements in a more integrated way. Booking and payment tools progress overall. The automation of the value chain is a strong trend, and are also comparable with the figures recorded in the United States. For 27% of organizations, there is a full integration with an online tool coupled with an expense management tool. This results from the growing perceived need to capture all expenses made by the travellers, not only those made through online tools prior to their trip. Companies equipped with so-called end-to-end solutions better control their spending: 80% of them declared that ¾ of their expenses is under control. Mobile technologies are also part of this trend. Their use becomes widespread for 60% of companies, which is an increase by 5 points compared to 2012. The three most common mobile usages are: • Receive information from providers (in 72% of cases) • Make check-in (62% of cases) • Receive safety alerts (42% of cases) These technologies are still marginal in expense management, as applications are still recent and hardly emerging yet. Moreover, for 86% of companies, mobile technologies are still seen as a complement rather than an alternative to standard booking systems.
  15. 15. 15 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Security more than ever at the heart of concerns Safety is priority # 2 business for coming years behind cost control. It was only in the third position in 2012. This is also a major trend of the 23rd barometer. Indeed, companies are taking more measures to ensure the safety of their employees while travelling. A higher awareness of organizations’ corporate legal responsibility surely plays a role in this trend. Only 9% of companies say they do not have measures in place, this figure is down 2 points from 2012. Purely on security aspects, 60% of companies say they have implemented solutions to immediately repatriate their employees. Beyond the legal requirements, companies also want to keep in touch with their travellers in 81% of cases (vs 78% in 2012) and know where they are at any time 65% of them. However, and this is a real downside, employees are still very little alerted of these security problems by their organization, even in large accounts. Efforts in communication and training are still to be made in companies. Companies and travel agencies have a key role to play together to take the necessary steps to train their employees travelling to a high-risk areas. A recent study Amex shows that 55% of travellers are still not fully aware of rules and processes to be observed in high-risk situations. There is an obvious gap between organizations’ will and traveller perception.
  16. 16. 16 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 agency services Companies use their travel agency for support. To answer their three main priorities regarding travel budget management (cost control, security, complete view of expense), organizations are using more and more value-added services, and this is especially true during the trip itself. Agencies plays an increasingly role as a supplier and integrator of solutions. Most frequently purchased services are the online booking solutions (including support in change management related to their implementation). While only 2nd in the 2012 list, it has gained 9pts to reach 56% of all organizations using a travel agency. Interestingly, 20% of global accounts will also buy expense management solutions. This rate is lower for other account sizes. The online rise is of course to be linked with the extension of OBT adoption. Security aspects are the second motive for value-added services purchase. The 24/24 assistance and the repatriation / rerouting solutions are the most needed today, and are more and more attached to mobile solutions. Repatriation / rerouting in particular is up 5pts. Finally, attention must be drawn to the sourcing services, whose aim is to support the purchasing departments on all stages of their supplier negotiations: up to 50 % of global accounts now use them.
  17. 17. 17 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Part 2: the 4 profiles of travel expense management Introduction to the 4 profiles of travel management 10 variables have been defined to assess an organization's maturity in terms of business travel. Among the 10 variables are the following: Presence of a travel policy, business travel ROI assessment, presence of a Booking solution / Expense management solution, number of travel agency used, etc. The results of these 10 questions have been extracted for the 600 interviewed organizations, and 4 groups have been defined. Each organization behaves in a similar way within each group, but differently from other groups. The 4 groups have been named according to their business travel behaviour. 1st observation: the notion of control is not directly related to the size of travel budgets. As we will see throughout this part, companies that have a "global control" over their movements sometimes have limited budgets, and some of them less than EUR 250K budgets. Conversely, some large companies today do not have the will to exercise significant control over their travel expenses. Reading of 4 profiles must be disconnected from the concept of company size or budget travel.
  18. 18. 18 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Limited control for low & short-distance trip volumes Businesses that have limited control represent more than a fourth (27%) of analysed typologies. This category is characterized by a weight of rail well above the average, and a lower weight of air; otherwise they move mainly in their own country, and very little outside Europe. They are low users of tools and assistance in travel management. They use fewer tools on the value chain primarily due to low trip volumes. This is especially true when it comes to centralized payment tools, where they are far behind average. Cash advance is largely preferred to corporate cards. Online booking tools and expense management solutions are also not much widespread among them, even if the gap vs. average is smaller in this case. Their need for comprehensive vision of expenses is limited; therefore in 60% of cases, their processes are 100% manual. Meanwhile they have no or little travel policy. Only 22% of them have one against 64% on average. So far they have not established formal rules. Consequently, they do not often use a travel agency, and thus subscribe fewer services. Paradoxically 56% believe that their costs could be optimized; a travel agency could bring added value to them, notably through installing online corporate booking tools or mobile technologies.
  19. 19. 19 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Pragmatic control for a maximized short-term efficiency These companies have a profile quite close to the sample average, but they move very little in their own country, and even Europe. Their development zone is a bit in the Americas, but essentially in the Asia Pacific region, where today is growth. They seek above all optimizing direct costs and spend more than 60% of their budget to the development of customer assets. Unlike the first category, cost control is their priority - ahead of passenger safety or even complete vision expenses where they lag very late. Their travel policies direct-cost oriented, and these items are present in the travel policy of at least 65% of these organizations – even 70% for air.
  20. 20. 20 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Logically, best buy and advanced booking are the most used levers. These organizations tend to voluntarily underuse long-term profit levers, to leverage direct cost / short-term benefits. Logically, they are equipped with more than 95% of mobile technologies for their greater efficiency and responsiveness. On the opposite they use very few expense management tools.
  21. 21. 21 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Another interesting aspect: these companies use several agencies in 30% of cases, vs. 19% average, and their main travel agency is often a local or online agency. The added value of a travel management company seems to be less attractive to them, and they would rather tend to optimize the cost of their travel agency by installing competition between several partners. They are 29% to indicate that they have plans for international expansion within three years, and this might have the effect of changing their approach. Furthermore, 53% of them feel that their costs could be further optimized. Targeted and Global controls: 2 ways to manage more complex travel practices The last 2 profiles – targeted and global control organizations - have a travel profile fairly close in terms of expenditure, with a much stronger weight of air expense than the sample average. Targeted control primarily concerns companies that demonstrate a willingness to master the travel chain without dedicating too many resources by a weaker complexity. Global control concerns firms making every effort to control a travel chain by a more complex nature.
  22. 22. 22 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Their privileged area of travel is very broad, but different: • For those with a targeted control, they move primarily on their domestic market and Europe. • For those who have a global control, it is more complex areas in Asia, Africa and the Middle East. This type of travel has consequences for the security and control of travelers. Companies with a global control travel more in sensitive regions. As such security is a major issue really. This is particularly to be observed when it comes to repatriation services, with a 15pts gap between global and targeted control organizations. Global control organizations are also more aware of the importance of training travelers prior to their trip, although these practices still hardly reach 1/3 of such organizations.
  23. 23. 23 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 A huge majority of these organizations (76%) use 1 travel agency: these are by far the typologies with the highest share of single-agency use. This is a consequence of their need for a complete, fully integrated range of services that allow them, not only to successfully manage each part of the value chain, but also to bring consistency to the whole process. These organizations have a much higher need to get a complete view of their expenses, therefore they use their agency as an exclusive partner rather than a supplier among other. In the same logic, in 85% of cases the travel agency is a TMC, but by whether targeted or global control, they do not use it the same way. While Targeted control tend to lower the assistance required from their agency in their travel program optimization, on the contrary Global control organizations lean on their expertise to achieve it.
  24. 24. 24 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 complexity of travel and the level of technology equipment explain this difference. Companies with a global control are travelling in different regions of the world: • They use more repatriation and rerouting services, as per the higher level of insecurity while travelling in those regions; • Similarly, they use more sourcing services – with a difference of 18 points compared to that have targeted control – as per the higher number of suppliers required to cover all their travel needs.
  25. 25. 25 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 An important gap is also to be found with technologies, especially regarding online corporate booking tools and moreover expense management solutions. Only 17% of targeted control organizations currently use such solutions, against 87% of global control organizations. This is the fundamental difference between these two profiles: for 1/3 of companies with targeted control, travel management processes are 100% manual; this percentage is insignificant for businesses with global control. On the opposite 50% of global control companies have 100% automated procedures from end to end, while this share is insignificant within targeted control organizations. Companies with a global control have ensured to control their value chain from beginning to end. Logically firms that combine all the technological tools on the value chain and process automation measure their travel expense return on investment far more than those with a targeted control: 58% vs 34%.
  26. 26. 26 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 management maturity is not fully connected from the travel budget size Among the companies with a global control, 32% have a travel budget over € 3M. This share is lower with other typologies, but not nonexistent: big budgets are also to be found in more than 10% of organizations with a pragmatic control. In the same way, small budgets (less than € 250K) are present in all typologies, including global controls where they account for almost ¼ of organizations. This tends to confirm that the size of travel budgets must not be the only criterion when considering current and upcoming business travel management maturity. The size of the travel budget cannot be used as the sole factor in assessing the maturity of companies in control of their movements. Other criteria must be considered, first and foremost the type of destinations the company (number, distance, and complexity of visited regions). They are also a consequence of organizations motives for travelling abroad (customer visits, prospecting, MICE, etc.). This criterion must also be taken into account.
  27. 27. 27 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Expected evolutions of these 4 typologies Companies are faced with two issues that may impact their travel management maturity • Their international development, which can lead them to travel in economically dynamic regions, where security matters and travel complexity are higher than in Western economies; • Their need to gain a complete view of their expenses, which can lead them to adopt IT solutions to automate and better manage their processes from end to end. Whatever the size of companies, the general trend is the development of client assets at the heart of their concerns. As a reminder, organizations spend 60% of their budget for this purpose.
  28. 28. 28 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 Part 3: Prospects for 2014 2014 prospects: still more wait-and-see strategies, +0.8% growth forecast The respondents remain cautious for 2014: 72% of them consider a stable budget (against 64% this year). The proportion of increasing budgets is anticipated at 20%, as opposed to 23% in 2013, but moreover there should be less than 10% of organizations with a decreasing budget against 14% in 2013. Overall, the 2014 budget will be a slight increase up to 0.8%, with a higher dynamic for national accounts, together with a greater optimism for global accounts which should be back to a positive trend of their travel budgets.
  29. 29. 29 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 slight growth is consistent with forecasts for very moderate price increases in Europe. The air travel sector is hardly expected to increase fares, which should rather remain stable. Fare evolution is estimated -1% to 1% for economy class, and -1% to 2% for business class. Again, hotel fares are more likely to grow in 2014 in Europe, with 0 to 6% increase for economy fares, and 0 to 4% increase for business fares. This slight recovery of business travel should be coming from various regions The development of business abroad should remain the first motive for business travel development: when they expect their travel budget to increase, 52% of organizations explain it by a development of their activity outside Europe. • An important change is to be noted here: the leading country for economic growth outside Europe has long been the USA, but North America is now ranked only #4 among top regions, with 20% of organizations anticipating a development of trade there. They are largely overstepped by Asia-Pacific region, with 35% of organizations. This share is to be compared with 49% of organizations who anticipate a development of trade within Europe – this rate is similar with last year’s figure (48%). But the new trend concerns the development of trade domestically: while only 34% of interviewed organizations were confident about this growth engine in 2013, this rate is up 8pts to reach 42%. More European organizations now anticipate an economic recovery in their own country, which is a positive trend after years of sluggish economic situation throughout Europe.
  30. 30. 30 EUROPEAN BUSINESS TRAVEL BAROMETER 23rd edition – November 2013 Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarometre@concomitance.com This report is protected by copyright - 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 barometer The 2013 barometer was prepared by Concomitance on the basis of a telephone survey conducted from 16 September to 17 October 2013 among persons in charge of travel budgets ranging from less than €250,000 to over €50 million (Finance Directors, Purchasing Directors and Travel Managers) in 583 European companies based in 11 countries: Germany, Great Britain, France, Belgium, Luxembourg, the Netherlands, Spain, Italy, Denmark, Sweden and Norway. About Concomitance Concomitance is a service company specialised since 2001 in marketing, commercial, sales and client relations research, consultancy and performance development. Concomitance has teams specialised in several activity sectors such as telecommunications, travel and business travel, banking, distribution, etc. Since its establishment, Concomitance has stood out in terms of its capacity to transpose commercial and marketing issues into action plans which are immediately effective and comprehensible to all players. This capacity is a direct result of Concomitance's DNA: the prior business experience of our consultants allows us to formulate recommendations and share them with our clients in line with the maturity of their organisation.

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