Global business travel will be flat as far as volume in 2014, says the surveyed international travel managers in the latest International Travel Management Study.
The study, available here from AirPlus International, surveyed 958 travel managers in 24 countries in the third quarter of 2013 on their outlook for the upcoming year, delivering opinions on the business travel market useful for anyone building products for use in this particular vertical.
While we're already one quarter deep into the year, the perspectives of this global base of managers reveal a relatively neutral outlook on the year. Given the relatively anemic economic recovery in many parts of the world, this is not surprising.
Rising costs are also highlighted in the report, showing that while volume may remain flat, costs will rise - resulting in a net drop in actual profitability for many of those surveyed.
Rising costs are primarily pegged to growth in air travel costs, with 39% pointing to higher airfares, 34% paying more for hotels, 24% laying out more for conferences, and 22% increasing costs with car rentals.
The number of managers expecting cost increases came in at 42%, while the number of managers predicting volume increases was 31%. That left a majority - 53% - seeing static volume in 2014.
"Health and well-being" strongest social trend with increasing interest in tech
In a new bid to show underlying trends pushing international business travel, the survey now asks travel managers to weigh in on behaviors and priorities of clients.
The "data era" and the "outernet" were also identified as trends, with a growing number - 28% - seeing business intelligence growing in importance. This data focus will allow travel managers to better offer services, and some managers pointed out the need to also increase privacy.
The "outernet" refers to the growth in mobile and cloud computing, delivering services outside of the protected traditional corporate intranet. Brazil and Mexico see this as a clear priority:
The growth in stature of the "outernet" in corporate travel management may also lead to the ultimate market penetration of mobile payments, where corporate travel tools enable payments on the go within a specific outernet interface.
Over fifty percent of respondents said that "health and well-being" was the trend that had the strongest influence on travel management, while tech trends also featured prominently in the results.
This aspect of "duty of care" has gained real credence over the past couple of years, where travel managers are much more likely to consider the full impact of their decisions on those they manage travel for. It's interesting that this appears to now be a global trend of focusing on the health and well-being of managed travelers.
Of note is that 66% of respondents find it increasingly difficult to manage to juggle the importance of managing cost with the imperative to support travelers' needs.
Other signs of shifting needs in business travel are the 49% who cited environmental awareness, and the 41% who identified "third place working" as ongoing trends.
Brazil was strongest for environmental awareness, with 97% marking it as as priority, while 60% in Scandinavia saw third place working as a big trend.
Germany continues to be a steward of environmental action, with more managers there placing the environment as the number one trend affecting the industry than elsewhere, as that country has long placed value in understanding travel-related emissions and other environmental issues related to travel.
International outliers
While in the majority, this little-to-no growth camp is broken down more specifically by country. Here's where some managers see growth and others see decline:
Patrick Diemer, AirPlus' Chairman of the Management Board, said the regional differences actually continue the trend from last year's report:
Despite major regional differences, this trend from previous years remains stable, and points to sustained recovery of the business travel market. If we look at the development in travel spend, we can see the growing importance of professional travel management to control travel costs.
Of these regional differences, travel managers in Turkey had the most positive view of the year ahead (prior to the country's current turmoil), with 73% seeing more business trips in the year ahead. That compares with 50% responding that way in the previous study.
Those in Brazil seeing a rise in business bookings came in at 60%, India was 53% and South Africa was 47%.
Countries experiencing turmoil and economic uncertainty were the least likely to see growth in business bookings, such as in Spain, where a decrease in business travel was predicted by many travel managers.
On the other hand, a historically higher proportion of German travel managers expect increased volume: 31%. As the German economy remains strong in the EU, this trend is likely to hold up - even if 59%, the largest percentage of respondents in developed countries, see increased costs as an enormous headwind in the coming year.
The full report is available here.
NB: Global image courtesy Shutterstock.