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MP63090

MAPS BUSINESS TRAVEL MARKET MAY 2000

Overview

Editor: Market Assessment
ISBN: 1-86111-304-8

This report covers: Business travel, tourism, traveller expenditure, transport services, accommodation, world top ten tourism earners, length of stay, destination, time of travel, mode of transport, top ten UK destinations, airline choice, frequent flyer programmes, air travel, rail, railways.corporate travel, hotel booking, e-ticketing, eticketing, credit card companies, car ferries, rail operators, airports, hospitality industry, hotel companies, restaurants, business travel agents

Companies covered include: Accor, Forte, British Airways, British Midland Airways, BAA, British Airports Authority, Carlson Wagonlit, BTI UK Hogg Robinson, Sabre, Hertz, Airplus Business Systems, Guild of Business Travel Agents

Table of Contents

Executive Summary

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EXECUTIVE SUMMARY

In 1999, UK residents made 14 million business trips within the UK that involved an overnight stay and a further 8.4 million overseas visits. In the same year, overseas visitors to the UK made some 7.2 million visits to the UK. Corresponding travel expenditure, excluding expenditure on travel to and from the UK, totalled around £11.0bn in that year.

Business tourism, while having a much smaller share of the market than leisure tourism, is an important world industry in its own right. World business travel is estimated to have grown by 4.4 percent in 1999, only slightly below the figure of 4.7 percent anticipated for growth in leisure tourism.

The UK business travel market is now mature. Despite the fact that it shows some volatility, with considerable fluctuations recorded in the year-on-year figures for domestic trips, nights and spending, it is unlikely to have the potential for continuing high growth over the long term.

Business travel to the UK by residents of overseas countries has also been growing rapidly since 1994, although not at quite the pace of UK business travel to overseas destinations. The fastest growing market has been that of visitors from the EU, with both visits and nights increasing by around 9 percent a year, while the average length of stay remained fairly constant, at around 3.4 nights.

Visits to the UK by residents of North America increased more slowly over the period, averaging just under 7 percent p.a. Macro-economic projections give grounds for optimism that, in most markets considered in this report, growth will continue.

Among other positive influences are the globalisation of markets, the opening up of new worldwide business opportunities to UK firms and the development of new applications of information technology, including the Internet. Although this creates the potential for communication systems that could substitute for travel demand, recent experience, and a consensus of industry opinion, suggests that this is unlikely. It is more probable that the influence of such technologies on travel demand will be positive, simplifying booking procedures and opening up additional travel opportunities.

It is also predicted that, within Europe, competition between transport operators will intensify, leading to additional services and lower fares. Although this is a positive development from the viewpoint of the business traveller and the firm on whose behalf travel is undertaken, it is likely that these competitive pressures will force some service providers out of business, or cause them to be taken over by stronger competitors.

Some constraints on the growth of demand seem likely to continue over the next five years. Such constraints include congestion on UK traffic arteries, in town and city centres and on airport access roads, and congestion affecting airline operations, including air traffic control constraints and scarcity of aircraft take-off and landing ‘slots’ at major airports in the UK and elsewhere.

The competitive business environment places pressure on all providers of travel services, notably airlines and hotel operators, to continually improve their product range. Established scheduled airlines are currently experiencing particularly strong competition from the low-cost operators in economy fare markets, and one response has been to seek to expand their shares of the more lucrative business travel markets.

New destinations, at present only served indirectly, via connections over intermediate airports, will in future also be served by direct services, as the market expands. Similarly, UK regional airports will also see an increase in the number of international points served, as demand grow

Text © 2000 MAPS

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