LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
LATIN AMERICAN BUSINESS TRAVEL BAROMETER
1st edition – May 2014
Groupe Concomitance: Tel +33 (0)1 78 16 52 30 or infobarom...
Upcoming SlideShare
Loading in …5
×

First lat am business travel barometer by concomitance

361 views

Published on

The business travel market in Latin America is one of the quickest growing in the world with an increase in the size of travel budgets of 4.2% in 2014.
Discover the 1st business travel barometer for Latin America carried out by Concomitance on organizations practices along the business travel value chain (Travel policies and procedures, key levers to optimize travel expenses, budget break-down, booking, payment and expense management tools) and the main priorities over the next three years

Published in: Travel, Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
361
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

First lat am business travel barometer by concomitance

  1. 1. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report 1st edition of the Latin American Business travel barometer May 2014
  2. 2. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Content Executive summary..................................................................................................................................................................3 Methodology of the barometer................................................................................................................................................4 Part 1: Overview of the Business Travel Market....................................................................................................................5 Quickly growing business travel market in Latin America.............................................................................................................................................5 Business travel between 0.7% and 1.4% of GDP...........................................................................................................................................................5 Dynamic Market due to higher activities ......................................................................................................................................................................6 A strongly domestic market...........................................................................................................................................................................................7 Breakdown of travel budget: importance of Air + Hotel...............................................................................................................................................7 Part 2: Three main priorities for Latin American organizations ...........................................................................................8 Introduction to the three main priorities......................................................................................................................................................................8 Priority #1 = Cost Control ..............................................................................................................................................................................................9 Travel policy.........................................................................................................................................................................................................9 Travellers autonomy..........................................................................................................................................................................................11 Budget optimization needs and levers..............................................................................................................................................................11 Travel agency support in optimization..............................................................................................................................................................13 Priority #2 = Complete View of Expense .....................................................................................................................................................................14 Travel agency usage ..........................................................................................................................................................................................14 Booking practices ..............................................................................................................................................................................................14 Booking solutions ..............................................................................................................................................................................................15 Payment methods .............................................................................................................................................................................................16 Travel management procedures .......................................................................................................................................................................16 Expense management solutions........................................................................................................................................................................17 Priority #3 = Security of travellers ...............................................................................................................................................................................18 Synthesis: several levers for organizations to reach their priorities ...........................................................................................................................19 Perspectives for 2014.............................................................................................................................................................20
  3. 3. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Executive summary The business travel market in Latin America is one of the quickest growing in the world. It made up USD 60 billion in 2013 and has had an average growth rate of 7.2% since 2000. The market can be described both cautious and dynamic. The market is cautious because a majority of firms do not want to adjust their travel budget, but it is also dynamic, because when they do adjust it, firms in Latin America tend to adjust it by a very large margin. This has led to an average increase in the size of travel budgets of 4.2% in 2014. It is important to note that this in general is not due to inflation, but rather to actual increases in operating activities. This market is also strongly domestic, with the largest part (75%) of increases resulting from a developing activity within each country respectively. Air and hotel expenses account for almost ¾ of an organization’s budget, which is far above their weight in Europe (60%). Priority #1 = Cost control  71% of interviewed organizations will be taking measures to enforce their cost control over the next 3 years.  Several factors explain this level of priority: o Only 50% of firms have a travel policy in place, and if it is in place, it is not widely implemented; o Business travellers in Latin America enjoy a high level of autonomy, with 41% having great to complete autonomy when travelling.  Consequently 82% of organizations declare that they could optimize their budget, and even to a large extent for 24%.  As in Europe, the preferred lever for cost control is best buy. Priority #2 = Getting a complete view of expenses  50% of organizations are willing to enhance their view over their expenses. This priority is higher than in Europe (ranked #3). o Many organizations use several local travel agencies, rather than 1 agency covering all their needs. o Direct booking to supplier is high, 50% of firms using it either as their main booking practice or in combination with a travel agency. o Online corporate booking tools (OBTs), although quite widely used (44%), are often used for a limited share of bookings. As opposed to Europe, mobile phones are widely used in the booking phase of the travel cycle. o When in place, standardized procedures tend to be manual. Priority #3 = Increase travellers security & safety  Most organizations have now taken security measures, notably during the trip and by subscribing travel insurances.  An axis of improvement lies into the still low share of them providing pre-trip training & information to their travellers. Prospects for 2014 are good, with an increase in budgets forecast to reach +5.8%, and a better situation especially in Brazil and Chile.
  4. 4. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Methodology of the barometer 480 organizations have been interviewed for the first edition of the Latin American business travel barometer, either face-to-face or by telephone. All respondents are travel managers for their company. Interviewed organizations are from all sectors of the economy with various sizes of travel budget – from less than USD 50 000 to more than USD 10 million. The median budget was USD 250 000. Seeing as this is the first edition of the barometer, at the moment, there are no comparable statistics for previous years. Thus, comparisons are made with the current and historical situations in other markets, especially Europe and China, but also with the respondents’ own answers regarding their past travel habits and their predictions for future ones. Methodology of the LatAm Business Travel barometer ► 480 organizations have been interviewed All interviews by phone or face-to-face ► Respondents are travel managers ► All sizes of business travel budget From < USD 50K to > USD 10M Median budget = USD 250K ► All sectors of the economy Mexico 80 interviews Brazil 240 interviews Chile 80 interviews Argentina 80 interviews May 2014Concomitance 2
  5. 5. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Part 1: Overview of the Business Travel Market Quickly growing business travel market in Latin America The business travel market in Latin America looks to be promising. With USD 60 billion it currently represents roughly 5% of the world’s USD 1145 billion, with an average positive trend of +7.2% between 2000 and 2012 (vs +4.5% globally). In comparison, during the same time the European market grew only by an average of 3.7%. Nevertheless, the countries of the former Eastern Bloc remain the fastest growing market at 10.3% annually. Business travel between 0.7% and 1.4% of GDP While the business travel budgets vary greatly in size within Latin America – from less than USD 3 billion in Chile and Peru to approximately USD 30 billion in Brazil – in general, the business travel budget is between 0.7% and 1.4% of GDP. All of the six major countries in the region have a comparable ratio. Interestingly this ratio can also be observed in other regions around the world, such as in Europe. Latin America among top growing regions Yearly growth 2000-2012 +4,5% = World average +1,5% +7,5% < > +1,1% / year +7,2% / year +7,5% / year +7,1% / year +10,3% / year +3,7% / year Source: GBTA, WTTC April 24th, 2014Concomitance 4 Total business travel market USD 1145 billion Total Latin America USD 60 billion Business travel always represents between 0,7 and 1,4% of the country’s GDP ► All major 6 countries in the region have a comparable ratio between their Business travel market and their GDP: between 0,8% and 1,4% 0,0% 0,5% 1,0% 1,5% 2,0% 1 30 Business travel amount (USD billions) Business travel / GDP ratio Brazil Peru ArgentinaChile Venezuela Colombia Mexico Business travel = 0,7% to 1,4% of GDP 52 3 4 6 7 8 9 10 May 2014Concomitance 5 Total Latin America USD 60 billion
  6. 6. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Dynamic Market due to higher activities 57% of travel budgets within respondents have remained stable, 32% of budgets have increased, and 11% have decreased. • When budgets increased, it was by 24% in average; • When they decreased, it was by 31% in average. This leads to two conclusions. On the one hand, the fact that 57% of organizations stabilized their budgets shows that the market is rather cautious. This trend is also observed in Europe; which also shows that organizations now tend to better control their costs, which allows them to keep developing their activity while stabilizing their travel budget. On the other hand, the market is also very dynamic, because when firms do change their budget, the percentage of change is very high. For example, firms who decided to increase their travel budgets did so by an average of 10% more than in Europe. Similarly, firms who decreased their budgets decreased them by an average of 10% more in Latin America than in Europe. For Latin America, this has led to an average budget increase of 4.2% in the past year – a positive development when compared to Europe with an increase of 0.5% in the same time period. It is also important to note that, with the exception of Argentina, most organizations have increased their budgets for higher activity volumes rather than for inflation. This is a positive trend given the high reported rate increase of +5% per diem in main business areas, according to the Business Travel News index. Barometer results: a dynamic and positively oriented market, and also cautious More than half travel budgets are stable 3257114 countries Decreased Remained stable Increased +24% in average -31% in average + 4.2% Average budget increase in the last 12 months + 5.6% + 7.5% + 2.4% + 3.3% May 2014Concomitance 6 Business travel budget evolution % of organizations This positive trend results from the activity, not from the inflation ► Budgets mostly increase for trip volume increase: the market shows a strong dynamism 74 26 Main reason for budget increase % of organizations Higher volume of travel Higher travel cost 79 21 90 10 75 25 33 67 4 countries May 2014Concomitance 7
  7. 7. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report A strongly domestic market For now and the near future, the business travel market in Latin America remains largely domestic, with 75% of companies listing domestic development as the main reason for increasing budgets. This rate is similar in Argentina, Brazil, Chile, and Mexico. While this is expected for a large country like Brazil, it is more surprising for the comparably smaller countries. This rate is similar to the rate in China, but much less than in Europe (35%), where organizations much more rely on their activity in the rest of the continent, and moreover abroad (especially Asia). This can be explained by the fact that, in Europe, markets are smaller in average and the economic situation requires closer cooperation. Breakdown of travel budget: importance of Air + Hotel In Latin America, the proportion of business travel expenses spent on air and hotel are very high. 74% of the surveyed organizations’ budgets were used for these two categories, in comparison to 61% in Europe and 46% in China. These high percentage rates can partially explained by the absence of rail in these countries. The market is strongly domestic ► When budgets increase, it is mainly for domestic development reasons Domestic development 75% of budget increase reasons Continental development 15% of budget increase reasons Global development 10% of budget increase reasons May 2014Concomitance 8 43 31 6 0 13 8 Trip purpose breakdown % of budgets Air + Hotel = 75% of travel budgets Car rental Food & Beverage Other Air + hotel = 74% of budgets Rail 61% 47 31 6 0 10 32,8 38 31 5 0 14 8 3,7 37 30 6 0 18 71,7 38 29 9 0 15 8 1 67% 69% 78% 67% May 2014Concomitance 9
  8. 8. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Part 2: Three main priorities for Latin American organizations Introduction to the three main priorities As it is in Europe and China, cost control is unsurprisingly the number one priority for Latin American firms. 71% of surveyed organizations are willing to take measures in order to improve their capacity in cost control within the next 3 years. Getting a complete view of expenses seems to be a growing priority. It is number two in Latin America, and although no evolution can be drawn in this 1st edition of the barometer, a strong positive trend has been observed in Europe and China for a few years now. It has reached #3 priority in Europe, and #4 in China. The desire to be fully able to grasp travel expenses is a growing tendency around the world and will surely become a major topic in the coming years. Organizations have 3 main priorities ► These top priorities are similar in Europe ► The “complete view of expense” is a recent & growing priority May 2014Concomitance 12 71% Get a better COST CONTROL Increase TRAVELLERS SECURITY & SAFETY Get a COMPLETE VIEW OF EXPENSE 50% 43%    % of organizations
  9. 9. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Priority #1 = Cost Control Travel policy Only one in every two Latin American firms interviewed has a travel policy in place. This is a relatively low figure, compared to 64% in Europe. Moreover, if a travel policy is in place, it is not widely applied, with only 41% of organizations reaching 70% compliance or more. This figure is 57% in Europe. Not applying these travel policies can have a direct effect on costs, but also on other priorities, such as a complete view of expenses or travelers’ safety. The importance of travel policies will also likely be a trend in the coming years. Interestingly, while travel policies are not fully enforced, they are composed with a high level of directives, with seven directives being shared by at least 50% of organizations. This is a rate comparable to Europe’s situation. When in place, travel policies are ready to be applied to the whole traveling process. Implementing a travel policy is a standard yet to come, and compliance must be optimized Travel policies are in place in ½ organizations Their compliance is often limited Travel policy in place % of organizations 50% of organizations have a travel policy in place 50% of organizations don’t have a travel policy in place Travel policy level of compliance 41% of organizations 19% of organizations 22% of organizations 18% of organizations = 64% 57% May 2014Concomitance 13 >70% of expenses 50-70% of expenses 20-50% of expenses <20% of expenses
  10. 10. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Among the seven main directives in travel policies:  4 are related to direct costs, with hotel directives being the most prevalent at 80% of companies, followed by air directives at 76%. This trend is also observed in Europe: hotel directives are now slightly more present in travel policies than air directives, although hotel expenses weigh an average twice less than air expenses. This can be explained by 2 main facts: first, hotel expenses are more difficult to control, with many independent suppliers not fully present in central booking tools and a significant part of the expenses being made on-trip while in the hotel; second, some studies reveal that out-of-policy hotel bookings can have a strong impact on the budget, while out-of-policy air bookings tend to occur the same expenses – or even a little saving (see GBTA study “Out- of-Policy Business Travelers and Their Impact on the Bottom Line”, August 2013)  2 directives are related to process or indirect costs, 82% of firms have a policy requiring upstream validation, and 79% have a downstream validation process. Interestingly, directives on process and indirect costs, although more complex to implement and with longer return-on-expense, are now widely shared by organizations.  Finally, 1 directive is linked with the security of employees, with 52% of respondents having implemented such measures in their policy. Yet, travel policies contain a lot of directives, to manage both direct and indirect costs ► 7 directives are shared by at least 50% of travel policies. This is a similar rate to Europe (9 directives) Concomitance 14 May 2014 Direct costs Process / indirect costs Corporate responsibility 80 76 54 50 45 41 38 20 82 79 49 47 52 20 Hotel directives Air travel directives Car rental and ground service directives Meetings & Events (MICE) directives Preferred suppliers Travel alternatives (audio, video conf) Ancillary service directives Rail directives Upstream validation process Downstream validation of expenses Payment method directives Travel agency directives Security of employees Environmental & sustainable development Travel policy components % of organizations 50% of organizations
  11. 11. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Travellers autonomy In general, organizations in Latin America award a high level of autonomy to their travelers. In 41% of cases, travelers have either great or even total autonomy for their bookings and expenses, which can greatly impact the total cost of the trip and the full view of expenses. This situation has of course an impact on the above described low compliance of the travel policies. This rate is lower in Europe, but even higher in China with the same consequences on travel policy compliance. Budget optimization needs and levers Organizations are already conscious of pre-described areas of improvement, with 82% saying that their travel budget could be optimized, compared to 64% in Europe. Out of these 82%, 24% say that their budget could even be optimized to a “large extent.” Indeed, travelers have a great level of autonomy for their expenses Level of autonomy Complete Great Partial None 20% of organizations 21% of organizations 46% of organizations 13% of organizations 41% of organizations give full of great autonomy to their travelers 29% ► An important share of companies award a high level of autonomy to their travelers. ► This can have an impact on the total cost of trip, and on the full view of expenses. ► The level of autonomy is generally lower in other regions. May 2014Concomitance 15 Consequently organizations consider that their budgets could be largely optimized ► More than 80% of interviewed organizations consider that their expenses could be optimized. ► They are 25% to consider that this could be done to a large extent. 18 58 24 Could expenses be optimized? % of organizations No, or to a very small extent Yes, to some extent Yes, to a large extent 82% of budgets could be optimized Only 18% of organizations already have an optimized budget 64% 19 55 27 13 64 24 26 52 22 14 69 17 May 2014Concomitance 16
  12. 12. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Like in other regions, best buy is their preferred optimization lever. As previously mentioned, seeing that this is the first edition, it is hard to find a trend. However, in Europe the trend is very strong: this lever was #2 last year, #6 in 2011, and not even in the top ten in 2010. This growth was notably made possible by the emergence of tools and solutions within organizations, making price comparison easier. Emergence of best-buy is also made possible by the rise of low-cost carriers in the business travel, where they now weigh an average 37% of air budgets through the 4 studied countries. The situation is however heterogeneous, with a very heavy weight in Brazil (49% of air budgets, the market being shared between Gol and Latam), and a more lower, but significant weight in other countries (between 21% and 28%). Interestingly the relationship with suppliers has evolved: renegotiating the partnership is now used more often (lever #8) than maximizing the use of existing partnerships (lever #15). This trend has been observed in Europe too, where the earlier is lever #6. Many organizations, especially SMEs, consider a negotiated rate a guarantee against higher rates, rather than an opportunity of savings. Unsurprisingly optimization efforts are likely to affect air and hotel expenses, as the main cost items; but F&B appears just behind, this category being much more difficult to control despite a lower weight in the budgets. All categories of expense are concerned by optimization ► Air and Hotel expenses have the highest potential for optimization, before non-bookable expenses 81 69 33 30 6 51 35 20 Expense categories which should be more tightly managed % of organizations Air Hotel Car rental Food & beverage Ancillary services Rail Road expenses Bookable expenses Non-bookable, or partially bookable expenses Meetings & Events May 2014Concomitance 17 Best buy is their preferred optimization lever ► Best buy is today’s most used optimization lever. ► Most optimization levers act on direct costs. Best buy Pre-trip TCO* assessment Advanced booking Online booking Unused ticket follow-up Pre trip approval procedures Travel policy compliance Renegotiation of supplier agreements Post trip approval procedures Central payment means *TCO = Total Cost of Ownership Top 10 budget optimization levers 1 2 3 4 5 6 7 8 9 10 1 2 4 5 3 7 13 6 10 13 May 2014Concomitance 17
  13. 13. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Travel agency support in optimization Surprisingly, travel agencies are not often requested to provide support for budget optimization. Hardly 1/3 of organizations using a travel agency appeal to its expertise for this purpose; and this share drops below 25% when it comes to set up optimization levers or measure their efficiency. There is definitely an area for improvement here, which partly lies into a higher consolidation of travel agency usage (agencies are currently mostly local and partly cover a client’s need, see after). Travel agency support is not often requested ► When a travel agency is in place, its support is not often requested for budget optimization 36 Defining optimization levers % of organizations 25 23 Measuring efficiency of optimization levers % of organizations Do organizations use their travel agency for optimization levers? Base 100 = organization with at least 1 travel agency May 2014Concomitance 19 Setting up optimization levers % of organizations
  14. 14. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Priority #2 = Complete View of Expense Travel agency usage 75% of organizations use a travel agency, a rate which is comparable to Europe at 80%. However, there is a significant difference for the type of agencies used. In Latin America, they tend to be mainly local (45% of organizations) while TMCs have little penetrated the market yet (18% of organizations). In Europe the situation is almost the opposite, with TMCs in place in 57% of organizations and local agencies only in 31% of them. Consequently 33% of organizations use several travel agencies, in comparison with 19% in Europe. This results in a lower capacity of getting a full view over expenses. Booking practices Regardless of whether organizations use a travel agency or not, direct supplier booking is very high. More than 50% of organizations use it as their main booking practice or equally combined with travel agency booking. This also has an impact on their view of expenses. Organizations use several travel agencies, and these agencies are mostly local ¾ organizations are using a travel agency Have a travel agency 75 Don't use a travel agency 25 At least 1 travel agency in place % of organizations 1 agency 41 2 agencies 24 3 agencies 9 May 2014Concomitance 19 33% They often use several agencies TMC 18 Pure online agency 10 Local agency 45 Other 2 They often use a local agency as their main agency Organizations have several booking practices ► Direct booking to supplier is still strongly used by organizations (true assessment whether they have a travel agency or not). Concomitance 20 May 2014 Direct supplier 36 Travel agency 45 Balanced combination 18 Booking channel used % of organizations Direct supplier 43 Travel agency 35 Balanced combination 20 Direct supplier 46 Travel agency 36 Balanced combination 18
  15. 15. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Booking solutions Online corporate booking tools are used by 44% of organizations, either through a travel agency portal or as an integrated solution. This rate is comparable with the rate in Europe at 50%. However, when OBTs are in place, they are not fully used with only 41% of organizations managing at least ¾ of their bookings through the system. This ratio is especially surprising when considering that such a large part of expenses is made up of air and hotel costs. One reason for the low usage of OBT could be because, as a corporate practice, mobile phones are highly used in the booking phase (booking, payment, booking modification). This is an important conclusion of this barometer, as, in comparison, European organizations mainly use mobile phones for the on-trip phase, but not yet for the booking phase. This situation is likely to continue to grow, as this phase of the trip cycle is also the one where respondents want to increase the mobile usage the most. This also once again shows the high level of autonomy awarded to travelers. Mobile can be considered an alternative to OBT 14 8 48 72 62 50 22 30 34 15 25 37 68 58 49 54 Mobile functionalities commonly used % of organizations Europe Latin America 50% of organizations Bookings to providers Payment Booking modifications Check-in Alerts from providers Security alerts Concierge services Reporting et expense management Mobile is considered a real alternative to booking methods, including OBT May 2014Concomitance 22
  16. 16. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Payment methods Currently, organizations in Latin America use several payment methods for their business travel expenses. However, there is not a single means of payment that is being used by 50% or more of organizations yet, meaning that there is not yet a clearly defined standard for a payment method on the Latin American market. On average, organizations use two different methods each, with manual and non-centralized methods still controlling a significant market share. Centralized payment methods have not yet convinced a majority of organizations. This is similar to the profile that currently exists in Europe, and it is likely to be a major challenge for expense consolidation in the future. Travel management procedures Having standardized procedures in place is an important driver for expense management. A majority of Latin American organizations do have such procedures in the pre-trip phase, such as the entry and approval of travel requests or online booking. However, this is much less the case in the post-trip phase, with only 38% of organizations having a standard procedure for the entry and approval of expense claims and 36% having a procedure for the integration into the accounting system. When standardized procedures are not in place, managing expenses remains an ad-hoc process with disadvantages occurred in the full view of expenses. Organizations use several means of payment, none of them have become a standard yet ► No payment method exceeds 40% of organizations: a standard is still to define on the market. ► In average organizations use 2 different methods each. ► “Manual” and non-centralized methods still hold a significant part of the market. ► This profile is similar to Europe and represents a major challenge for expense consolidation. 40 36 33 32 23 Corporate card - company account Cash advances Travel agency invoicing Reimbursement on personal credit card Corporate card - traveler account Top 5 payment methods used by organizations % of organizations 50% Centralized Not centralized May 2014Concomitance 23 Standardized procedures are not in place in all the post- trip phase 62 54 38 59 36 Presence of standardized procedures % of organizations 50% of organizations Entry and approval of travel requests Online booking Entry and approval of expenses claims Reimbursement of expenses Integration in the accounting system Pre-trip Post-trip May 2014Concomitance 24
  17. 17. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Moreover, 40% of the organizations that do have these procedures in place have fully manual business travel management practices. This is a higher rate than in Europe, where only 28% of companies have manual practices. Interestingly enough, at 25% the rate for fully automated booking processes are also higher than in Europe, where the rate is currently at 13%. This means that in this emerging market, a significant number of firms have directly jumped to end-to-end solutions. Expense management solutions Unsurprisingly, the high level of manual procedures in the travel expense management partly results from a still low adoption of expense management solutions. To be noted, this low rate is comparable with Europe, where these solutions are still to convince a majority of organizations, especially in the SME segment. However, most organizations are fully aware of the benefits of using both an Online corporate booking tool and an Expense management solution: ¾ of those using an EMS are also using an OBT. And when in place, these procedures are often manual ► 40% of organizations have fully manual business travel management procedures. ► Full automation is in place in 1 organization in 4. Concomitance 25 May 2014 Fully manual 39 Partly manual 36 with disparate systems 13 with 1 unique solution 12 Level of automation of procedures % of organizations Fully automated 45 42 40 28 35 31 39 33 4 16 13 20 16 10 9 20 EMS equipment is relatively low, but often comes together with an OBT ► OBT drives the adoption of EMS. ► When they have an Expense management solution (EMS) in place, 71% of organizations also have an OBT. EMS only EMS + OBT Using an EMS 33% Expense Management Solution adoption rate % of organizations 74% 26% May 2014Concomitance 26 4 countries
  18. 18. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Priority #3 = Security of travellers Traveler’s security and safety is ranked #3 priority in Latin America, which joins a global trend already observed in other regions such as Europe, where this concern is now priority #2. Despite mostly domestic trip needs, Latin American organizations already have a high duty of care, both legal (especially for those travelling to Europe, where travel insurance in mandatory), and moral (internationally, but even domestically with higher security risks than in other regions). These 2 aspects of the duty of care are likely to grow in the future, as international standards observed in the US, in Europe, or in some parts of ASPAC, are getting higher. Organizations have taken several measures to ensure security to their travelers. More than half of them are now able to know at any time where travelers are. A similar share of respondents are now subscribing insurance for their trips. But surprisingly, a much lower part of them have taken upstream measures to provide training or information to their employees. The same assessment can be made in Europe. To answer this central issue, organizations have taken security measures ► Subscribing a travel insurance / assistance is among top measures (also taking into account it is mandatory for trips to Europe) ► Upstream training of employees is developing, although only in 27% of organizations so far. 15 27 53 64 53 31 Measures taken to ensure travelers security % of organizations 50% of organizations Nothing in place Upstream training of employees Travel insurance subscription Ability to contact travelers any time Ability to know where travelers are Ability to repatriate travelers Pre-trip On-trip
  19. 19. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Synthesis: several levers for organizations to reach their priorities Analyzing the gap between organizations’ priorities (and therefore ambitions) and their actual achievements in terms of solution acquisition, practices, procedures, etc. allows to draw a list of challenges for the next years to come. As priority #1 by far, cost control should focus the attention. Organizations’ main challenge lies in the better management of expenses occurred by their travelers in a high level of autonomy. This could be achieved by driving a better compliance of their policy – when a policy is in place – or implementing a policy. Given the importance of mobile solutions and direct booking, a better compliance could be reached by adapting corporate solutions to these booking methods. Getting a full view of expenses is priority #2 and several drivers can be considered in order to reach it. Most of them are related to a better adoption or usage of tools: Online corporate booking tools (to manage a higher share of bookings), payment tools (to adopt central payment solutions), and in a general way, getting procedures to become more automated. To enhance their ability to secure their travelers, organizations should leverage the already high usage of mobile, and complete it by training employees prior to their trips. Synthesis ► To reach their 3 main objectives, Latin American organizations still have a few challenges ahead Priorities Challenges to reach objective #1 = Cost control  Implement a travel policy (50% of organizations)  Drive compliance by framing travelers autonomy  Leverage travel agency support in optimization efforts #2 = Full view of expenses  Rationalize booking practices  Maximize usage of OBT, when in place  Enlarge adoption of central payment tools  Standardize & automate procedures in the post-trip phase #3 = Traveler security  Develop upstream training of employees  Optimize mobile usage in the on-trip phase May 2014Concomitance 29
  20. 20. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report Perspectives for 2014 At the moment, the market is still cautious. In total, 56% of organizations will stabilize their budgets in 2014. However, in total, still more organizations are looking to increase their travel budget, leading to an average budget increase of 5.8% over the next 12 months. The situation is improving vs. 2013 in all countries, but especially in Brazil and Chile. Perspectives ► The market is still cautious: more than half organizations stabilize their budget ► But less organizations will decrease it + 5,8% Average budget increase in the next 12 months + 7.9% + 5.5% + 4.1% + 5.6% 36567 4 countries 34 45 35 38 58 50 62 52 8 5 4 7 Business travel budget evolution % of organizations Will decrease Will remain stable Will increase May 2014Concomitance 27
  21. 21. LATIN AMERICAN BUSINESS TRAVEL BAROMETER 1st edition – May 2014 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 authorization of Groupe Concomitance in its role in the preparation of this report About the Latin American business travel barometer The 2014 barometer was prepared by Concomitance on the basis of a face-to-face and telephone survey conducted from February 17th and April 2nd, 2014, among persons in charge of travel budgets ranging from less than USD 50,000 to over USD 10 million (Travel Managers, Finance Directors, Purchasing Directors) in 480 Latin American companies based in 4 countries: Brazil (240 interviews), Argentina, Chile, Mexico (80 interview each). About Concomitance Concomitance is a service company specialized since 2001 in marketing, commercial, sales and client relations research, consultancy and performance development. Concomitance has teams specialized 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 organization.

×