24/7 eTV BreakingNewsShow :
NO SOUND? Click on the red sound symbol in the lower left of the video screen

Business travel spend in Europe grew in 2014

Written by editor

LONDON, England – According to the American Express Global Business Travel 2014 EVP Barometer, business travel spend grew 0.9% in 2014, confirming the forecasts made in the November 2013 edition of th

Print Friendly, PDF & Email

LONDON, England – According to the American Express Global Business Travel 2014 EVP Barometer, business travel spend grew 0.9% in 2014, confirming the forecasts made in the November 2013 edition of the Barometer. This change follows a three-year slowdown that bottomed out in 2013 with growth of only 0.5%. According to the Barometer’s respondents, this growth is due in part to improved economic conditions in the Barometer’s ten reference countries; France, Germany, UK, Spain, Italy, Belgium, the Netherlands, Denmark, Sweden and Norway

According to the Barometer, 2015 should confirm the upturn seen last year, with marked differences from country to country. Total travel spending in the ten countries targeted by the Barometer is expected to increase by 0.7% in 2015.

Elyes Mrad, Managing Director of Europe, the Middle East and Africa (EMEA), American Express Global Business Travel, says: “Whether seeking to retain current customers, win new prospects or develop new markets, companies are aware of how important business travel is to support their sales growth. According to our research, they now devote 51% of their business travel budgets to business development activities, as opposed to 46% in 2013. Yet, in a persistently difficult economic context, controlling direct costs remains a priority. The real challengeis to gain a comprehensive view of these expenditures: expectations are increasingly high in this area, particularly with the adoption of end-to-end solutions.”

Key highlights:

1) Business travel growth trending upwards: increased activity in Europe is driven by a desire to develop business

The Barometer shows that this increased focus in business development activities throughout Europe is benefitting corporate travel.

Retaining and acquiring new customers, and breaking into new markets represented 51% of budgets in 2014 against compared to 46% in 2013. Nearly half of companies plan to develop their activities abroad in the next three years, as opposed to 38% in 2013 and 35% in 2012.
Business travel within Europe specifically grew the most in 2014, representing 50% of total growth. In 2015, it is expected to increase by six percent, to account for 56% of business travel growth in total.

2) Company priorities remain focused on cost control and monitoring

• Cost control

According to the Barometer, over the last few years, cost control has been the top priority for companies (87% of them in 2014).

Whilst searching for the best available price remains the top method for controlling costs, businesses are starting to see its limitations, as this practice declined this year.

Two practices are now clearly among the top three tools for controlling costs: online reservations gained significant traction, ranking second in 2014 (versus fifth in 2013), as did advanced booking, which came in third in 2014 (fourth in 2013).

• A comprehensive view of spending

In addition to cost control, the Barometer finds that companies seek to have an overall vision of their spending, encompassing both direct and indirect costs. This is a priority for over half of companies, a figure that rose sharply (up by 15 percent in two years).

The concept goes beyond cost control – which remains confined to direct costs – and includes obtaining a comprehensive view of indirect costs such as IT development and staffing. It promises to be a major topic in years to come.

Companies understand the increasing importance of end-to-end solutions for gaining an overall view of their spending.

Naturally, the percentage of companies using both self booking tools (SBT) and expense management solutions (EMS) has grown in recent years: according to the Barometer, 43% in 2014 as opposed to 26% in 2013 use a combination of SBT/EMS. Companies are clearly motivated by the possibility of monitoring their travel programme as a whole, not only by cutting costs.

• TMCs, helping make the transition

When attempting to integrate these changes, companies face a complex choice of solutions and suppliers and call upon their Travel Management Company (TMC) to help them make the necessary transitions.

According to the Barometer, implementing end-to-end solutions is top among services that must be developed (29%) by TMCs, followed by business travel ROI assessment, which is key to transforming the perception of business travel as an investment.

Mobile solutions rank third (13%), as does the integration of new types of suppliers, which, driven by traveller demand, appears for the first time in the barometer.

Indeed, the Barometer found that mobile technologies are becoming a major channel, with over half of companies claiming to have incorporated mobile use into their travel programs.

As in 2013, mobile devices are mainly used to receive supplier alerts (87%), check in (77%), obtain security announcements (74%) and modify reservations (60%). Logically, companies say that they would like to develop mobile use to include bookings, expense reporting and management, and security.

3) What about the traveller?

• Traveler safety remains critical

Between cost control (priority number one) and a comprehensive view of spending (priority number three), traveller safety ranked second among company priorities, according to the Barometer, gaining ground (up by 24 percentage points in two years).

All safety measures were strengthened: means of contacting (87% of companies 2014 versus 81% in 2013), repatriating (73% in 2014 versus 60% in 2013), and locating employees (71% in 2014 versus 65% in 2013); employee training increased (32% versus 23%), but still remained a secondary priority.

• Traveller comfort is not a priority for all

In the list of company priorities, the comfort of the traveller fell from fourth place in 2013 to sixth in 2014. According to the Barometer, only 20% of businesses measure satisfaction and use the results.

Paradoxically, 20% of businesses (versus 12% in 2013) now purchase VIP services from their TMC, aware of the negative impact certain travel conditions can have on employee productivity.

Print Friendly, PDF & Email

About the author


Editor in chief is Linda Hohnholz.