The Business of Travel

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The Official Blog of the Global Business Travel Association


Week in Review

Much of the week was dominated by the sad news of the Germanwings plane crash in the Alps killing 150 people. It soon came out that the fatal descent the flight took was deliberate and that according to CNN, the co-pilot was hiding an illness from his employers and had been declared "unfit to work" by a doctor. We at GBTA are very saddened by this tragic loss of life.

USA Today reported this week that PreCheck is now at 1 million travelers. GBTA’s Mike McCormick called TSA’s PreCheck essential to road warriors, but in light of a report revealing the agency cleared a convicted felon for expedited airport screening said it still needs stringent oversight and review by TSA to ensure these trusted traveler programs are working as intended or situations like this one could have the potential to undermine confidence in the system as a whole.

Successful Meetings reported that GBTA joined other industry groups in support of A4A’s fight against a proposal to nearly double the Passenger Facility Charge (PFC). Some groups are pushing to double the PFC to $8 per boarding – that along with other taxes and fees means that a business traveler could see an increase of $58.20 for a round trip ticket.

In lighter news – but not light for the company bottom line – The Telegraph reported on the most expensive cities for business travel across the globe.

Hospitality Net reported on the successful GBTA Mexico 2015 conference held last week in Mexico City that saw record breaking attendance and the successful roll out of the Advanced Principles of Business Travel Management pilot session. In other conference news, GBTA and its German partner association VDR are set to partner again in 2015 on Europe’s largest business travel conference.

Looking to make your business trips go smoother? Well, this week provided a wealth of great ideas: Fox News shared six amazing business travel gadgets and Entrepreneur gave us four tips for road warriors to save time and money. USA Today detailed new uses for those airline amenity kits you often see in business class and Business Traveller tells us how to sharpen your know-how before your next business dinner abroad.


GBTA Joins A4A and Other Traveler Groups in Opposition to PFCs

Today GBTA joined several traveler groups in support of Airlines for America’s (A4A) opposition to the proposed near doubling of the Passenger Facility Charge (PFC) – or Airport Tax. GBTA is proud to support StopAirTaxNow.com where you can learn more about the PFC and see why A4A says airports have plenty and passengers have had enough.

Business travelers are currently paying $29.20 for the TSA Security fee and the Passenger Facility Charge on a one-stop round-trip ticket before they even start paying airfare. That airfare is taxed a further 7.5 percent. Now, the Administration and some groups want to increase the PFC to $8 per boarding. That, added to the security fee, adds up to $43.20, coupled with the 7.5 percent excise taxes figured into a $200 airfare means a business traveler will see an increase of $58.20 for a round trip ticket!

Road warriors strengthen the economy, create jobs and drive economic security. Travel should be promoted. The business traveler already faces an overbearing burden from taxes and fees and GBTA is very concerned that they are approaching the tipping point that will ultimately push business travelers to stay at home.

This does not need to be the proverbial straw that breaks the camel’s back. Travelers don’t need to be the piggy bank. Since 2008, more than $70 billion in capital improvement projects have been completed, are underway or have been approved by U.S. airlines and their airport partners at the country’s largest 30 airports, not to mention hundreds of other airports across the country. Beyond the investments made by airlines, airports have more than $11 billion in unrestricted cash and investments while bringing in more revenue every year – a record-high $24.5 billion in 2013. In addition, two-thirds of GBTA members surveyed late last year have said they oppose a PFC increase.

Click on GBTA’s link to send an email message to your Representative and Senators in opposing efforts to overtax air travelers.


Week in Review

According to The Hill, Reps. Joe Heck (R-NV) and Mike Quigley (D-IL) have re-filed a measure that is known as the Jobs Originated Through Launching Travel (JOLT) Act that would expand the expand the State Department’s Visa Waiver Program. The VWP has come under fire by some recently who say the program could weaken national security by allowing for easy entry into the United States for people with Western passports. In a recent House Homeland Security Subcommittee hearing though, experts disagreed, unanimously testifying that the Visa Waiver Program is beneficial to both the economy and national security. GBTA’s Mike McCormick spoke with national correspondent Kristine Frazao about it saying that while there will always be risk in any environment; these are programs that are vital to keeping the economy moving. They don’t compromise security and safety they’ve been well tested programs that have taken years and years to develop.

The Transportation Security Administration (TSA) entered the spotlight this week too, reports the National Journal. The Senate Commerce Committee's Aviation Subcommittee is examining TSA’s PreCheck program as background checks for Pre-Check applicants face questions from lawmakers and privacy advocates.

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In hotel news, Hotel Marketing reported U.S. hotel occupancy will hit a record high in 2015. They also reported on the massive opportunity the internet economy is offering the hotel industry.

No one enjoys flight delays. According to USA Today, Nate Silver, the data guru who attracted national attention for his on-target forecasts during the past two presidential elections, is taking on another challenge: predicting on-time flights. Silver believes this will be a necessary tool because of the severe economic impact flight delays have on the economy. GBTA agrees as a recent study revealed air travel mishaps — which include delayed and canceled flights — took nearly 11 hours to resolve and $1,154 in missed work and out-of-pocket expenses. 

Photo Credit: Simone Ramella

Photo Credit: Simone Ramella

Despite facing delays and other travel mishaps more passengers will be taking to the sky says CNBC.com. The article says the number of travelers flying on U.S. airlines is expected to grow by about 50 percent in the next two decades, according to a report by the U.S. Federal Aviation Administration. According to tnooz, many of those travelers will be using mobile boarding passes – and soon. They reported on a new survey that says more than 1.5 billion boarding passes will be delivered to mobile devices by airlines within four years.

Finally, The New York Times talks “Open Skies”. In a review stepping into uncharted territory for the United States, the Obama Administration announced that it is in the early stages of studying claims that Gulf airlines have received market-distorting subsidies.

Remember to check back every Friday for the latest news in business travel.


Visa Waiver Program Boosts Economy and Increases National Security

According to The Hill, Reps. Joe Heck (R-NV) and Mike Quigley (D-IL) have re-filed a measure that is known as the Jobs Originated Through Launching Travel (JOLT) Act that would expand the expand the State Department’s Visa Waiver Program, which currently allows tourists from 38 nations to visit the U.S. without obtaining a visa.

The Visa Waiver Program has come under fire by some recently who say the program could weaken national security by allowing for easy entry into the United States for people with Western passports. Experts disagree though. In a recent House Homeland Security Subcommittee hearing, experts unanimously testified that the Visa Waiver Program is beneficial to both the economy and national security. It was more of the same at the Senate Subcommittee hearing as well - see the full testimony here.

The Visa Waiver Program brings millions of travelers to the United States annually and pumps billions of dollars into our economy. By facilitating travel and trade with 38 countries, the VWP spurs job creation and economic growth. The Visa Waiver Program positively impacts business travel, which accounted for an estimated $1.2 trillion dollars in global spending last year.

It is also a critical tool for American businesses involved in international trade. While the program is intended only to facilitate travel with allies, GBTA recognizes the potential security concerns to the United States. As such, GBTA appreciates the need for oversight of the program, but urges Congress to resist imposing burdensome changes that would impact the viability of the program.

GBTA’s Mike McCormick recently spoke with national correspondent Kristin Frazao about the Visa Waiver Program saying that while there will always be risk in any environment; these are programs that are vital to keeping the economy moving. They don't compromise security and safety they've been well tested programs that have taken years and years to develop. Watch the full interview:

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Learn more about the Visa Waiver Program: what it is, quick facts, eligibility and the process.

Also, check out this video on the VWP and its implications for national security:

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Doing Our Part

*This post originally appeared as a ‘letter from Mike’ in Global Business Travel magazine volume three, issue one.*

Not too long ago, business travel was largely limited to certain parts of the world. Now, business travelers regularly venture to dozens of countries on six different continents. The past 15 years alone have seen explosive growth in the business travel market driven by this phenomenon. According to GBTA research, global business travel spending totaled approximately $633 billion in 2000. In 2014, total spending was close to $1.2 trillion – an increase of more than 86 percent.

This expansion in business travel resulted largely from a dynamically integrated global economy. As the global economy has expanded beyond the U.S., Western Europe, Japan, and Australia there has been a rapid expansion of travel among and between developed and developing markets. The BRIC countries (Brazil, Russia, India, and China) are now major travel markets. Korea, Mexico, Argentina, parts of Eastern Europe, Malaysia, Thailand, and parts of Africa are growing rapidly as they take their place in the global economy.

Photo Credit: Jason Bachman

Photo Credit: Jason Bachman

Part of the growth of these developing markets has resulted from multinational corporations expanding in search of untapped market potential. But much more of this growth has resulted from the development of businesses based in those countries and the increased purchasing power of a percentage of their residents.

The feature article in this issue of the magazine focuses on the International Monetary Fund and its Managing Director, Christine Lagarde. The IMF works to foster global and economic stability throughout the world and has been instrumental in supporting economic growth in Latin America, Africa, Southeast Asia, and Eastern Europe, among other areas. The Fund provides development financing, such as loans to assist in the construction of key infrastructure projects. It helps structure stock exchanges and other mechanisms by which businesses and merchants exchange goods and services. It also operates a range of anti-poverty programs, which are critical to the growth and sustainability of a national economy.

One of the major challenges of doing business internationally is that countries operate according to various rules. Different nations have different systems of taxation and place different values on contracts and laws directly related to international business. Not surprisingly, these legal and policy differences affect the business travel industry. Travel managers must be aware of these various regulations in order to ensure the safe and productive passage of their companies’ employees.

At GBTA, we are working to ensure that our travel professional members have the knowledge they need to keep abreast of the rapidly evolving international business travel landscape. We are constantly refining and updating our education and certification programs to incorporate the latest developments throughout the world – including many areas where we had little involvement as recently as five years ago. And we continue to work with policy makers to limit the barriers to business travel.

I encourage you to think about the opportunities and challenges that come with growing global commerce and what this will mean for your companies. No two ways about it: We all play an integral role in the evolution of the global economy.


Global Hotel Programs Don’t Fit ‘Cookie Cutter’ Mold

Last year, the GBTA Foundation released the 2014 Global Hotel Program Study, in partnership with Best Western, interviewing travel managers in North America and Europe who worked on global corporate travel programs and had a role in hotel selection or negotiation. This year, the two partnered again to look at travel managers based in Asia Pacific and Latin America. The two studies were meant to characterize global hotel programs, determine how they function and examine how programs vary depending on region and travel spend.

The motivation for this follow-up study was the expectation that the hotel programs examined this year would look different from those examined last year due to unique market conditions. Many differences were discovered throughout the report, but one key difference was obvious from the start. Many travel managers based in APAC or Latin America oversee regional travel programs for large global or multinational companies. These regional travel managers were included because of their important role in the two regions; however, they would not have qualified for last year’s study which looked only at global travel managers.

HotelProgramStudy2015pic1

HotelProgramStudy2015pic2

Here are some of the key highlights from the 2015 Asia Pacific and Latin America report:

  • Chain-wide agreements are more prevalent in Asia-Pacific and Latin America, driven most likely by global hotel programs wanting to standardize the “stay” of their employees no matter where they are.
  • In both Asia Pacific and Latin America, Regional Travel Managers are commonly involved in selecting preferred hotels and negotiating preferred hotel rates.
  • Hotel programs in Latin America are more likely than Travel Managers in other regions to be guided by their TMCs when it is time to sign new preferred hotels.
  • Regional negotiations that are passed on as recommendations to global teams could be behind the high level of satisfaction among regional Travel Managers with the RFP process.

Key highlights from the 2014 North America and Europe report include:

  • While companies based in North America tend to have centrally managed programs, their travel policy is also more likely to use guidelines in contrast to European based companies, which are more likely to use mandates.
  • High travel spend companies are more likely to issue one global hotel RFP after receiving regional recommendations.
  • On average, one in five preferred hotels is dropped from a global program each year after an RFP is issued. The rate is twice as high in Europe as in North America.
  • Travel managers in North America are more likely than their European counterparts to enter into individual property agreements, while in Europe global chain-wide agreements are more likely.
  • Regardless of region or travel spend, half of respondents indicate they rely somewhat or a lot on TMCs to manage their day-to-day hotel activities.

The research underscores the importance of understanding how and why global hotel programs vary in structure globally. There is no “cookie-cutter” or one-size-fits-all global hotel program. Rather than using a one-size-fits-all approach to their global programs, high-spend companies see value in a team-oriented program where recommendations are sought from local and regional travel managers.


Week in Review

CBS Money Watch reported on a GBTA study this week showing China will soon top the United States in business travel spend in spite of a cooling economy and slower economic growth. Yahoo! News writes that early signs are showing new economic policies in China will have a long-term positive impact on the economy, which points to a healthy business travel industry for years to come. See the five key takeaways from GBTA’s business travel and economic outlook for China.

ChinaBTI2015H1

Where is the world’s top airport? USA Today reports Singapore's Changi Airport won the "World's Best Airport" award for 2015 as presented by aviation industry consultancy Skytrax for the third consecutive year. According to International Business Times airports will be busy as airline travel in March and April is set to surge to its highest level in seven years according to Airlines for America. In more good news for airlines, CNN reports the airline accident rate is at its lowest ever with less than one crash for every 4.4 million flights.

Joe Sharkey of The New York Times wrote about expansion plans for TSA PreCheck raising privacy concerns. He spoke with GBTA’s Mike McCormick for the article who said, closer consultation with corporate travel representatives was needed to iron out concerns about using private enterprise for the PreCheck program as it’s an area where though the intentions are good, it’s fraught with issues. Interested in learning more about programs like PreCheck? Travel Pulse breaks down Global Entry, TSA PreCheck and Nexus and looks at which program is best for you.

The Hill reported on terrorism fears threatening the Visa Waiver Program (VWP). GBTA’s Mike McCormick tells them the VWP brings millions of travelers to the United States annually and pumps billions of dollars into our economy spurring job creation and economic growth. While the program is intended only to facilitate travel with allies, he added, GBTA recognizes the potential security concerns to the United States and as such, GBTA appreciates the need for oversight of the program, but urges Congress to resist imposing burdensome changes that would impact the viability of the program.

In hotel news, Skift reports that top hotel CEOs say the industry won’t copy airlines with fee frenzy. GBTA also released a hotel study this week that examined global hotel programs and revealed there is no one-size-fits-all approach.

Tnooz reports on the sharing economy giving us five reasons it is here to stay.

Apple sent the tech world abuzz announcing finally announcing the new Apple watch this week and hotels are already getting ready for it Hotel Marketing reports.

GBTA was excited to announce this week that its Global Business Travel magazine was named a Gold Prize winner in the North American Travel Journalists Association (NATJA) 2014 Awards Competition in the Trade Travel Article category.

Ever lost your luggage on a business trip? Well, you will be pleased to read this New York Times article about smart luggage for the connected age. Yahoo! Travel’s Sid Lipsey tells us how to save big money on business travel and finally I leave you with a list from The Business Journals of six apps to pack on your phone for business travel.


Five Key Takeaways from GBTA’s Business Travel Forecast for China

GBTA released its latest business travel forecast for China today as part of a semi-annual series. Sponsored by Visa Inc., the report relates unfolding economic events at home and abroad to their resulting impacts on China’s business travel market. Here are the top five takeaways:

  • China continued its so-called “soft landing” during the second half of 2014 shifting away from investment and exports as the main growth drivers and shifting toward consumerism. China’s central authorities have skillfully applied fiscal, banking and regulatory policies to ensure that both goals continue to be met while still avoiding rapid increases in inflation and overheating local government debt. These economic policies are showing signs of having a long term positive impact on the economy, which points to a healthy business travel industry for years to come.
  • The GBTA Foundation report shows China business travel spend will continue to see double digit increases in 2015 and 2016 growing 14.2 percent in 2015 and another 12 percent in 2016 reaching $334 billion USD.

ChinaBTI2015H1

  • A welcome surprise to China’s second half economic growth in 2014 has been provided by trade. Chinese exports rebounded strongly in 2014, and continued rising exports bode well for Chinese international outbound (IOB) travel in 2015 and beyond. GBTA expects IOB spending will continue to grow at double-digit rates projecting 13.6 percent in 2015 and 11 percent in 2016 hitting $14.3 billion USD, but will see challenges as the world economy remains on shaky ground.
  • GBTA expects China to continue to grow its domestic business travel market much more rapidly than the other major markets in the world with projected spending growth of 14.2 percent in 2015 and 12.1 percent in 2016. As previously forecasted, China is poised to overtake the United States as the number one business travel market in the world. Given our current projected growth in business travel in the two markets, we expect China to surpass the U.S. in spending by 2017.
  • The extraordinary growth in both leisure and business travel demand has led hoteliers to significantly increase their presence in China over the last decade. Demand growth outpaced supply growth in every class of hotel – luxury and upper upscale hotels typically favored by business travelers led this trend.

GBTA members can access the full report on the GBTA Hub.


Car Excise Taxes Bad for Business Travelers, Economy

Business travel is hard—and expensive—enough. States and local governments shouldn’t make it even harder and more expensive by adding unnecessary taxes on car rentals.

But that is exactly what many such governments are doing, and business travelers from companies of all sizes are paying the price, along with automakers, consumers and insurers.

rentalcar

It’s time for Congress to step in.

Here’s how it usually works: an important person in a city, perhaps a sports team owner, wants to build a new facility. But of course, he or she doesn’t want to pay for it themselves. So they convince the local government of the economic benefits of the facility, and that building the facility should be financed via public funds.

These funds are very often raised by slapping a significant tax on car rentals, which disproportionately hurts the poor and other groups, and hurts the economy.

In response, GBTA has joined a diverse coalition of similarly minded organizations known as Curb Auto Rental Taxes (CART) Coalition to fight to end car rental excise taxes across the United States. We joined CART because we believe these taxes are regressive, highly discriminatory and terrible for the economy.

Because of the nature of the car rental business, certain populations are more heavily impacted, including business travelers, minorities, small businesses and the poor. These excise taxes also increase the cost of insurance for everyone.

Luckily, a legislative solution is already primed and ready to go—if only it can get enough support. Currently, Congress is considering the bi-partisan End Discriminatory State Taxes for Automobile Renters Act (EDSTAR), which would stop municipalities and states from forcing discriminatory taxes on car or truck renters.

For years, groups like CART and allies both in and out of Congress have been working to get this important bill passed. To date, they have been unsuccessful—but there is reason to hope 2015 is the year something will happen.

Don’t you think it’s time for Congress to stop local and state governments from using local taxpayers, tourists, and travelers to help fund their pet projects?

If you’d like to show your support for this legislation you can Take Action through the GBTA Legislative Action Center.

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Week in Review

GBTA began this week just as last week ended – advocating for Congress to pass a bill fully funding the Department of Homeland Security (DHS). GBTA’s Mike McCormick spoke with Joe Sharkey of The New York Times about how the funding standoff creates uncertainty for the business travel industry, which directly impacts the economy. USA Today reported how lawmakers were looking for a way out of the DHS funding impasse. They also quoted GBTA saying, “For the sake of our economy at large, Congress must stop moving from crisis to crisis." When Congress did finally pass a bill funding DHS for the rest of the fiscal year, GBTA was relieved that road warriors can now continue to travel without disruption, disappointed that the path to a full-year funding bill was fraught with such uncertainty.

Also on the advocacy front, the House passed an Amtrak reform bill this week. Matt Alderton of Successful Meetings reported that if there is one thing Republicans and Democrats agree on, it’s the importance of upgrading the nation’s passenger rail system. GBTA was pleased to see this pass the House and urges the Senate to move forward with legislation approving funding for Amtrak.

We all know mobile is big now, but just how big? Booking.com now sees 100,000 transactions a day on mobile.

Intercontinental Hotels Group (IHG) was awarded its second Project ICARUS Sustainability Gold Medal from Project ICARUS and the GBTA Foundation. The Gold Medals recognize travel and meeting industry companies who are committed to making sustainability a core function within their business and are leading the way by commitment and actions to provide best in class sustainability programs for their company, travelers and customers.

In a look at airline news, The Dallas Morning News reports U.S. airlines are growing without adding airplanes. Terry Maxon writes that they are doing this by putting more seats in their airplanes, replacing smaller airplanes with bigger airplanes or flying their airplanes more often or on longer trips. USA Today’s Bart Jansen reported on a survey that shows travelers overwhelmingly oppose increasing fees on airline tickets that help pay for airport improvements.

Also, Hotelmarketing.com writes Google is making a stronger stake in the mobile travel sector by rolling out an updated flight-search tool that will enable consumers to use their mobile devices to search for fare prices and a slew of flight options and may cut into the crowded sector of booking applications.

CNN Money reports that Malaysia Airlines hopes a revamp will revive the airline. Slightly removed from two major tragedies, the immediate financial crisis is drawing to a close, and the company has developed a turnaround plan that shows a return to profits by 2017. USA Today looked into airline safety and writes that air travel will get even safer in 2015.

Finally, Fast Company on their Future of Everything blog makes 3 bold predictions about the future of air travel.