Table of Contents

Executive Summary

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TABLE OF CONTENTS

Executive Summary

Market Definition

MARKET SECTORS

MARKET POSITION

MARKET TRENDS

Table 1: Business Travel in the Total Tourism Market ( percent visits), 1997

Market Size

THE TOTAL MARKET

INBOUND BUSINESS TRAVEL

OUTBOUND BUSINESS TRAVEL

DOMESTIC BUSINESS TRAVEL

Table 2: UK Business Travel Sector (million trips/visits, £m and percent), 1993-1997

Table 3: Demand for Business Travel Arrangements within the UK (million trips/visits, £m and percent), 1993-1997

Table 4: Demand for International Business Travel Arrangements in and out of the UK (million trips/visits, £m and percent), 1993-1997

Table 5: Inbound Business Travel (000 trips, £m and £), 1993-1997

Table 6: Inbound Business Travel by Mode of Transport (000 trips and percent), 1993-1997

Table 7: National Origins of Inbound Business Travellers (000 trips, £m and percent), 1993-1997

Table 8: Outbound Business Travel (000 trips, £m and £), 1993-1997

Table 9: Outbound Business Travellers by Mode of Transport (000 trips and percent), 1993-1997

Table 10: National Destinations of Outbound Business Travellers (000 trips, £m and percent), 1993-1997

Table 11: Domestic Business Travel (000 trips, £m and £), 1993-1997

Industry Background

INDUSTRY CONCENTRATION

DISTRIBUTION

INDUSTRY BODIES

Table 12: Commercial Accommodation: Concentration and Geographical Breakdown, 1997

Table 13: Passengers at UK Airports (000), 1993-1997

Table 14: Passengers Uplifted on Scheduled Services by UK Airlines (000), 1995-1997

Table 15: Industrial Concentration of the Commercial Airport Sector, 1993 and 1996-1997

Table 16: Industrial Concentration of UK Airport Ownership, 1997

Competitor Analysis

THE MARKETPLACE

MARKET LEADERS

Table 17: Hotel Occupancy, Average Daily Room Rates and Gross Operating Margin ( percent and £), 1996 and 1997

Table 18: The UK's Leading Hotel Groups, 1997

Table 19: Main UK-Based Scheduled Airlines by Number of Aircraft, 1994-1997

Table 20: Scheduled Passengers at Selected UK Airports (000 and percent), 1993-1997

Table 21: Granada Group PLC: Financial Summary (£m and percent), Year Ending September 1992-1997

Table 22: Whitbread Hotels Ltd: Financial Summary (£m and percent), Year Ending March 1995-1998

Table 23: Thistle Hotels PLC: Financial Summary (£m and percent), Year Ending December 1992-1997

Table 24: Queens Moat Houses PLC: Financial Summary (£m and percent), Year Ending December 1992-1997

Table 25: Stakis PLC: Financial Summary (£m and percent), Year Ending September 1992-1997

Table 26: Main Media Advertising Expenditure by Major Hotels and Business Brands (£000), Moving Annual Total to December 1993-1997

Table 27: British Airways PLC: Financial Summary (£bn, £m and percent), Year Ending March 1993-1998

Table 28: Virgin Atlantic Airways Ltd: Financial Summary (£m and percent), Year Ending April 1995-1997

Table 29: British Midland Airways Ltd: Financial Summary (£m, percent and million), Year Ending December 1993-1997

Table 30: Main Media Advertising Expenditure by Selected Major Scheduled Airlines/Brands (£000), Moving Annual Total to December 1993-1997

Table 31: BAA PLC: Financial Summary (£m, percent, million and 000), Year Ending March 1993-1998

Table 32: Manchester Airport PLC: Financial Summary (£m, percent, million and 000), Year Ending March 1992-1997

Table 33: Birmingham International Airport Ltd: Financial Summary (£m, million and percent), Year Ending March 1993-1997

Table 34: Main Media Advertising Expenditure by Airports (£000), Moving Annual Total to December 1993-1997

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

HOTEL GUESTS ON BUSINESS

AIR TRAVELLERS ON BUSINESS

SELF-DRIVE CAR HIRE FOR BUSINESS

Table 35: Business Visits to Hotels in the Last 12 Months ( percent of adults), 1996 and 1998

Table 36: Penetration of Business Flights by Destination ( percent of UK adults), 1998Å

Table 37: Business Trips by Air in the Last 3 Years ( percent of adults), 1996 and 1998

Table 38: Analysis of Airport Passengers at BAA's UK Airports by Passenger Type ( percent), 1997/1998

Table 39: Self-Drive Car Hire in the Last 12 Months ( percent of adults), 1996 and 1998

Outside Suppliers to the Industry

THE MOTOR INDUSTRY

EXHIBITIONS AND CONFERENCES

Table 40: Company Cars Registered in the UK (000 and percent), 1984-1997

Table 41: Main Car Hire Chains in the UK (number of outlets), 1997

Current Issues

THE ECONOMY

ABOLITION OF DUTY-FREE SHOPPING

'LOW-COST, NO FRILLS' AIR SERVICES

INTER-GOVERNMENTAL BILATERAL AGREEMENTS

DEREGULATION OF EUROPEAN AIR TRAVEL

AIRLINE ALLIANCES

Forecasts

Table 42: UK Forecasts for the Business Travel Market (million trips), 1998-2002

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HBI UK INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

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EXECUTIVE SUMMARY

In 1997, UK expenditure on business travel services was £5.85bn, generated from 15.5 million domestic trips and 7.2 million overseas trips. Between 1993 and 1997, the total number of trips increased by 51.3 percent while expenditure (excluding international air fares) increased by 45.3 percent. Expenditure is growing at a slower rate than trips because the real cost of travel is falling and the average duration of trips is decreasing.

Although the number of domestic business trips (excluding day trips) is more than double that of outbound trips, the value of the outbound market is greater, totalling £3.35bn (compared with £2.49bn) in 1997.

In 1997, the value of overseas residents' expenditure on business travel services to and within the UK was £3.5bn, generated from 6.3 million trips. Between 1993 and 1997, the number of trips increased by 34.9 percent, compared with an increase in expenditure of 45.3 percent.

The hotel industry is highly fragmented, despite growing concentration in the business sector. The largest UK hotel group, Granada, has less than 5 percent of available commercial bedspace in the UK and the top 15 have less than 19 percent market share. In recent years the budget sector has grown significantly and the four-star sector has rationalised. In 1997, UK hotels achieved their highest occupancy factor since 1977.

British Airways dominates the UK airline industry, carrying 59.8 percent of all scheduled airline passengers uplifted by UK airlines. Similarly, Heathrow dominates in the airport sector with 51 percent of scheduled passengers and 39 percent of all passengers (including charter flights). The top three airports accounted for 71.8 percent of scheduled passengers in 1997.

Business travellers tend to be older, wealthier and more likely to be male than other travellers. However, consumer research shows that the percentage of international female business travellers is increasing.

Key Note forecasts that domestic, outbound and inbound business travel trips will increase by 15.7 percent, 15.2 percent and 23.1 percent respectively between 1998 and 2002.

Text © 1998 Key Note

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Last updated by Duncan Nottage 11th February 1999