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All of Europe is focused on France this month as the Euro 2016 soccer tournament is underway to select a European champion. The home team has a very good shot of being crowned victors of soccer if not of economic recovery. While the nation’s economy and business travel markets are not out-performing the rest of Europe, they have both experienced respectable growth recently that is expected to continue throughout 2016 and 2017. Of course, the overall impact on Europe’s economy and business travel of the recent vote by the UK to leave the European Union is still unknown.
Despite a lingering transportation strike that is affecting both business and tourism travel throughout France, the French business travel market is forecast to continue to grow in 2016 and 2017, according to the latest GBTA Foundation Western Europe business travel forecast sponsored by Visa Inc. France is the sixth largest business travel market in the world, and its business travel sector is expected to grow at 3.9 percent in 2016 and 5.8 percent in 2017. According to the Organization for Economic Co-operation and Development, France’s economic growth is projected to rise to 1.3 percent in 2016 and 1.6 percent in 2017.
France’s increase in economic growth is largely the result of lower oil prices, less fiscal contraction and the cumulative effects of sustained monetary stimulus policies. Their business travel market, however, appears to be a harbinger of an even more positive economic future for France growing at a more rapid pace. Total business travel spending in France is set to top out at $38.6 billion USD in 2016 and $40.8 billion in 2017 - a 10 percent increase over 2015.
Even with this positive forecast, France grew at a slower rate than any other country in the Western Europe study save for Italy. A number of factors contributed to why France did not grow as rapidly as, say, the United Kingdom or Spain, but the country’s weak business confidence seems to be the main drag on France’s economic and business travel growth potential. With massive strikes over proposed labor reform laws – such as the transportation strikes mentioned previously - consumers and businesses alike are feeling less than optimistic amid growing economic uncertainties. These factors, in part, may weigh heavily on corporate investment and, subsequently, have a direct impact on business travel spending.
Even with lingering uncertainty, low consumer and business confidence and sluggish economic growth, France’s business travel market has become much healthier in recent years than it has been in the recent past. Domestic business, which accounts for 65 percent of all business travel, is projected to grow in 2016 and 2017, increasing at a rate of 3 percent and 5.7 percent, respectively. International travel is also expected to grow at a rate of around 6 percent in both 2016 and 2017. Comparing these figures to previous years when domestic travel grew by less than 1 percent in 2014 and international travel contracted by over 11 percent in 2012, and it appears that France continues to rebound from the recent economic downturn.
Thursday’s Brexit vote dominated the news. With the results in and U.K. voters having chosen by a slim margin to leave the E.U., GBTA issued a statement on the outcome. Skift reported on what the Brexit vote means for the global tourism industry.
London’s Heathrow Airport is one of the biggest gateways to Europe, and Bloomberg looks at what Brexit could mean for international travelers. Many of the article’s findings are similar to what GBTA found in its overview of what Brexit could mean for business travelers. Two of Europe’s largest discount carriers – Ireland’s RyanAir and the U.K.’s easyJet have both indicated that Brexit could put an end to low-cost European air travel.
GBTA also released its Business Traveler Sentiment Index Global Report in partnership with American Express this week that focuses on business travelers’ attitudes toward business-related travel and those feelings impact their travel habits. Skift reported on new data from the report that found that the sharing economy is becoming more and more acceptable for business travelers, but corporate travel policies remain unclear on their appropriateness. Tnooz also reported on GBTA's new data on the sharing economy and corporate travel policies.
Successful Meetings focused on the data point from the same Sentiment Index that three-quarters of business travelers are satisfied with their business travel while Buying Business Travel reported that one-third of business travelers want larger budgets to meet their business travel goals.
USA Today highlights how hard it is to comparison shop airlines for the lowest prices because of fees and add-ons. The article highlights how a base fare of $187 increases to over $277 with different fees. Fees aside, the base fare of First Class seats is dropping while free upgrades – one of the major perks of frequent travel – are becoming harder to come by according to a recent Skift article. Skift also reports on the micro-revolution that lead to United’s new Business Class seat configuration.
Travel Daily News reports on the European airport industry’s recent ACI Europe Annual Congress & General Assembly where the industry reported improving financials, shifting connectivity, but warned of disruptions on the horizon.
French air traffic controllers have joined the railroad and pilots in striking, causing delays and cancellations in flights to, from and within France, according to Buying Business Travel.
According to Business Today, business travel in Asia is growing four times faster than in North America and two and a half times faster than in Europe.
Your list for this week comes from the Business Journal:
10 best picks for business travelers in 2016
In a referendum vote yesterday, the people of the United Kingdom have voted to leave the European Union. For a briefing on what this means, click here. The following statement can be attributed to Michael W. McCormick, GBTA Executive Director and COO of the Global Business Travel Association (GBTA) – the voice of the business travel industry:
“The outcome of the UK’s referendum heralds a period of change within the EU. During this time, GBTA and its partners across Europe and in the UK will continue educating its members on the impact for business travelers and the business travel sector and will work together to promote and defend the interests of the business travel industry.”
"While it is impossible to immediately assess the implications of the result on the UK, European and global economy and on international relations and world order at this point, GBTA remains committed to the same principles it always holds strong: ensuring business travelers maintain freedom of movement, business is not disrupted, travel infrastructure remains strong and programs and bilateral agreements that facilitate safe and secure travel like the EU-US visa waiver exemption continue. As the UK and EU move forward with the next steps, GBTA will advocate for these principles.”
The top ten business travel markets in the world are not static. Indeed, recent GBTA Foundation BTI reports have shown that China has overtaken the United States as the largest business travel market in the world. There is a significant margin between the number one and two markets – China with $291 billion spent on business travel and the U.S. with $290 billion spent on business travel – and third place Germany with $64 million in business travel spending.
According to the recent Brazil Outlook BTI sponsored by Visa, the second half of the top ten business travel markets could be in for a bigger shake-up – with Brazil at risk of dropping out altogether. In early July, with the release of our Global BTI report, we will have the latest rankings and may see some changes. A deterioration in Brazilian-originated business travel spending has led to Brazil falling in the rankings of the top business travel markets in the world. The Brazilian market was once the seventh largest in the world measured in total business travel spend. Over the last two years, however, the country has fallen to the number nine spot, being surpassed by South Korea and Italy. It is likely to fall to be overtaken by India and fall to the tenth spot in the near future.
The rise in the Brazilian middle class over the previous decade helped accelerate Brazil’s economic activity and giving the country international acclaim as one of the BRIC countries held up as a model of prudent development. These gains also lead to a rapidly advancing business travel market. Brazil’s business travel and economic growth have stagnated over the last few years and its business travel market is in significant danger of backsliding and losing much of the momentum gained in the early 2000s.
More alarming is the poor state of Brazil’s infrastructure. While some gains have been made in preparation for the Summer Olympics, the World Economic Forum’s (WEF) 2015-2016 Global Competitiveness report ranked Brazil 123 out of 144 countries for quality of infrastructure, falling three spots from last year and a cumulative twenty-four spots over the last four years. This is by far the lowest of any of the other BRIC countries or of any of the other top 10 business travel markets.
Optimistically, The WEF report ranked Brazil’s airport infrastructure 95 out of 144, which is up 28 spots over the last two years. These gains are likely due to the privatization of several of the country’s airports.
While the immediate future will be difficult for Brazil, the latest BTI report predicts that 2016 will be the nadir of Brazil’s woes. Indeed, continued privatization in the highway and rail sectors is expected to generate approximately $66 billion USD in new investment over a 25-year horizon, with the majority of funds to be disbursed over the next few years. Projects include a high-speed rail between Rio and Brasilia. These infrastructure improvements will be critical for Brazil to regain footing as a top business travel market over the next 10 to 15 years.
There has been a recent tightening in polls as UK voters prepare to choose if they will remain part of the European Union or not. The Brexit vote – scheduled for tomorrow, June 23 – will determine the UK’s future role in relation to the rest of the bloc. It also means that a $47.1 billion business travel market may face more restrictions with respect to trade, travel and commerce among the rest of Europe – posing a significant risk to the short-term economic recovery of Europe and longer term consequences for countries with close economic ties to the UK such as Ireland.
According to GBTA's latest Western Europe business travel forecast, based on the import and export figures, the UK needs the EU more than the other way around. The UK sends about 50 percent of its exports to EU countries and receives about the same percentage of its imports in return. The EU, given its size and reach, sends only about 7 percent of its total exports to the UK and receives only about 5 percent of all imports from Britain. A vote in favor of Brexit would necessitate renegotiation of trade agreements between the UK and the EU, which likely would be far less favorable to the current arrangement.
If voters in the UK do decide to vote for Brexit, not only would trade and the economies of both sides be affected, but there would also be a significant human toll. Under current EU rules, citizens are able to move freely among member states. Brexit would suddenly create three million expatriates in the UK, approximately two million of whom are employed in the British economy. The legal status of these individuals would have to be negotiated. In the most extreme case - these people would have to return home and reapply for a UK work permit - the UK could lose 6 percent of its total workforce almost overnight.
For individual business travelers, perhaps the biggest effects the Brexit would have is on the ease in which they could travel to and from the United Kingdom and the prices they would need to pay to do so – both of which could become a major hindrance for business travelers and for companies doing business between the UK and the EU. Major British airlines have stated that they expect Brexit to increase airfares by up to 30 percent due to the UK trying to replicate the benefits of Europe's drive to liberalize the aviation sector.
Additionally, the heads of the Gulf’s three biggest airlines expressed concerns about the impact on the travel industry in the event of the United Kingdom leaving the EU As a European Union member, travel is currently unrestricted within the bloc making business travel across borders much easier than it had been previously. Visa and entry requirements, check points, air travel would all have to be quickly renegotiated if the UK were to cut its ties with the EU while ensuring safe, effective and affordable travel between the UK and the rest of Europe.
With respect to business travel, the latest Western Europe report forecasts that UK business travel spending will reach $50.9 billion in 2016 and $54.4 billion in 2017 – healthy increases of 7.9 percent and 6.9 percent, respectively. This coincides with a strengthening of the UK’s overall economy that is projected to continue in 2016 and beyond. Buoyed by increased demand for its goods and services as well as improved employment opportunities, low inflation, and a parliamentary budget surplus, the UK’s economy continues to grow and its business travel and attractiveness as a business travel destination continues to improve as well.
A vote in favor of Brexit, however, could severely hurt the UK’s economy and Europe’s economic recovery. The uncertainty a prolonged renegotiation of the relationship between Europe and the UK could take up to seven years. During that time, the economic activity as well as overall business travel would be significantly curtailed.
The potential for Brexit to herald the disintegration of the European Union – a body that facilitates free trade and freedom of movement throughout Europe is also a real possibility if Brexit were to succeed.
It would undoubtedly be in both the UK and Europe’s interest to come to a workable agreement on trade and labor that Brexit would likely bring. In any event, the decision is up to British voters and British voters alone. The world anxiously watches to see what the outcome of the referendum on 23 June will be.
As we approach the 48th annual GBTA Convention, there is no doubt it has become the premier destination for travel managers to gather, discuss and share the latest trends and innovations in business travel through its series of acclaimed education sessions. This year’s edition will feature more courses and workshops in Academy Hall than ever before and will cover the most buzzworthy topics from the past year—including everything from how to’s on incorporating data-driven initiatives into your travel programs to guides on utilizing the latest technology to help you streamline your goals.
Below are some of our most-anticipated education sessions for Convention to-date and just a small sample of what we have to offer. All of the sessions can be bookmarked through My Convention Planner.
5 Things Your Hotel Booking Data is Trying to Tell You – If You’re Listening
We all know that hotel prices seem to fluctuate on a frequency on their own. But what can you learn by tuning into the noise? Join James Filsinger, President and CEO of Yapta and a group of panelists that include Steve Sitto, Global Travel Manager for Tesla, Sharon McManus, Travel Operations Manager at the Bill & Melinda Gates Foundation, and David Moran, Executive VP of Global Marketing & Strategy for Carlson Wagonlit Travel, as they discuss the methodology of hotel price tracking and guide you through your hotel booking data to benefit your company’s bottom line—now and in the future.
A Glimpse into 2017: Forecasting Supplier Prices
Ready to get a head start on planning your 2017 program? If so, you can join the GBTA Foundation and Carlson Wagonlit Travel as they examine the upcoming supplier market for 2017. This education session will teach you about the factors affecting air, hotel, ground transportation, and meeting & events costs. The value of planning ahead is immeasurable and this session is definitely one not to miss.
Mobile Strategy: Bridging the Gap Between Traveler Experience and Travel Management
The rise of travel apps has benefited business travelers and has helped to redefine the overall travel experience. However, current research shows that there exists a dichotomy between what travelers value in terms of mobile apps and what travel managers perceive as valuable mobile tools. This presentation will address the various technologies and platforms that exist and how you can take advantage of them. We’ll also explore the origins of this mobile apps and help you understand how to leverage its power to create value, improve traveler experience, and increase loyalty.
Developing the Strategy in Strategic Meetings Management
Are you a travel manager that now has to manage meetings too? Take a crash course on the fundamental components of strategic meetings management programs and meetings management strategy. This session is designed to help you build a foundation while going a step beyond the basics by exploring the specific elements of strategy, including service configuration, insourcing versus outsourcing, and more.
Why is Corporate Hotel Procurement So Screwed Up?
It’s no secret that the current hotel procurement process isn’t the most efficient. That’ll be the launching point for an open, and lively, discussion between travel managers and hoteliers on the issues behind the current corporate hotel procurement process. We’ll touch on a number of issues from the RFP process to the differences in public rates.
‘GLOCALIZATION’ / glo·cal·i·za·tion: The Practice of Conducting Business with Both Local and Global Considerations
Managing a business with both local and global interests is just as much of an art as it is a craft. It’s important not to lose sight of your organization’s local interests while establishing your place on a global level. Finding the right balance between these, often, competing interests is what we refer to as the process of “globalization.” In this session, we’ll discuss this phenomenon and the obstacles faced by your companies with a hotelier, travel managers, and a Travel Management Company. You’ll learn about customizing a Global Hotel Program while addressing the local nuances of your business. Other topics of discussion include: adaptation, integration, and the use of data and travel technology to determine your best approach to developing your ‘globalized’ program.
#ItsNotJustApps: Digital Travel Experience in a Managed Travel Program
In addition to our seminar on mobile apps, this course addresses the ongoing digitization of corporate travel. Refine your company’s implementation of digital and mobile technology. Learn how smart technology affects your travelers and keep up with a constantly evolving corporate travel industry.
GBTA Convention 2016 will feature nearly 100 education sessions, in addition to several Peer-to-Peer Think Tank Sessions and opportunities for a number of credentialing programs. With Convention only a few weeks away, be sure to book any of these education sessions in My Convention Planner and start planning your agenda today. Looking forward to seeing you all in Denver!
Start your Monday off by catching up on last week's business travel news. In a show of continuing evolution of the airline industry, American Airlines is modifying its AAdvantage program according to The Motley Fool. Joining rivals United Continental and Delta, American Airlines confirmed that it will move to a revenue-based earning system for its AAdvantage loyalty program in August.
While business travelers may or may not appreciate the changes that airlines are making to their rewards programs, a majority of travelers say that they enjoy their airport experience according to 4 Hoteliers. Traveler’s airport experiences may get better this summer, as well. USA Today reports that Congress has approved funds to add more TSA agents to help alleviate the long lines many travelers have experienced this year.
TSA lines may be improving, but according to The Chicago Tribune, a shortage of air traffic controllers is now causing delays, as well. Internationally, the transportation strike in France continues to disrupt international business and leisure travelers as additional strikes loom, per Buying Business Travel.
Despite a rise in a new segment of competitors from ride share services, USA Today reports that rental car companies continue to do well by expanding their fleets and seeing an increase in revenue. Although rental car companies are booming, taxis are struggling as more and more business travelers opt for ride sharing services, according to The Economist.
Skift reports the findings of a study that found that Millennials are more likely to use an agent than any demographic group of older travelers. Not only are Millennials more likely to use travel agents, but their behaviors are changing the hotel industry, as well. CNN reports that many hotel chains no longer sell rooms, but sell experiences to keep up with customer’s changing demands.
I leave you with two lists for this week from Small Business Trends and Skift.
25 of the Top Business Travel Destinations – Small Business Trends
The Business of Hotels Vs. Short-Term Rentals in 4 Charts - Skift
In the early part of the 2000s, there was much talk of the BRIC countries – Brazil, Russia, India and China. These four markets were seen as rapidly developing examples of smart growth for other emerging economies around the world. Since the Great Recession, however, these four countries have grown at significantly different paces.
China continued to advance during the Great Recession as Brazil, Russia and India all felt its consequences on both their economies and their business travel markets. These three markets rebounded more or less in unison from 2010 through 2013 but then diverged again as India continued its rise while both Russia and Brazil declined.
Brazilian economic challenges led to flattening business travel performance in Brazil through the end of 2013 and into 2014. Brazil continues to face numerous pressures as evidenced by the recently released report sponsored by Visa, GBTA BTI™ Outlook – Brazil 2016 H1 that sees business travel bottoming out in Brazil in 2016 before seeing a slight rebound.
A side-by-side comparison of the BRIC countries highlights the divergence in these important business travel markets over the last few years. Starting in 2005 the four business travel markets paced one another but diverged significantly in 2009 as the Great Recession took full hold of the global economy.
For Brazil to get back on pace with both India and China, it will not only have to dig out of recession, but make significant structural reforms that will allow the economy and Brazilian business travel market the ability to flourish. Coupled with that challenge is the significant investment Brazil still needs to make in its infrastructure ahead of this summer’s Olympic Games, which may or may not be a boon to the country.
Despite how the BRICs have diverged since 2009, China, Brazil and India all still rank in the top ten business travel markets in the world, and there appear to be brighter days ahead. With respect to Brazil in particular, fallout from the current political situation, a rise in commodity prices, and/or a successful summer Olympics could help their economic and business forecasts improve, though these factors all remain unknown at this point. The days of the four BRICs growing in lockstep, however, appear to be over for the moment.
Tim Clark, president of Emirates Air, recently expressed concerns about the effects of Brexit on the EU economy, according to The National. Lufthansa’s CEO has also stated that he expects demand for air travel to fall if Britain leaves the bloc. GBTA’s recent Western Europe BTI found that while the ease of travel may be curtailed if Brexit occurs, the effect on both the UK’s and Europe’s overall economies would likely be manageable.
Skift reports on the findings of GBTA’s latest Western Europe BTI, as well, stating that despite continued worries over terrorism and uncertainty about the future of the European Union, business travel spending in Europe is heading for robust growth. International Meetings Review also reported on the findings as did Buying Business Travel.
The Economist also looks at the possible consequences of a UK Brexit from the EU for business travelers. The article mentions the possible effects on Britain’s and the EU’s economy, as well as noting that the cost of travel would increase. Additionally, the article mentioned the strong correlation between business travel and commerce.
Meetpie reports on GBTA’s latest study on extended stay accommodations and the finding that finding appropriate accommodations is one of the hardest challenges for travel bookers. Skift also reported on the new GBTA findings, stating that the sharing economy has not yet caught on with extended stay business travel.
A bipartisan group of senators is urging the Department of Transportation to investigate Lufthansa’s Distribution Cost Charge surcharge as anti-competitive according to Travel Agent Central. The article cites GBTA data from last year that found 42 percent of business travel buyers have decreased bookings with Lufthansa since the surcharge went into effect.
Tnooz examines how technology is shaping business traveler behavior. With the lines between work and personal life blurring, business travelers now say that they want convenience and flexibility in booking travel. The article cites a 2015 GBTA study.
Since the first travel booking websites debuted over fifteen years ago, people have been proclaiming the end of travel agents. Bloomberg looks at how new apps are using the personal touch of travel agents to improve the user experience in the next generation of customizable travel apps.
The Houston Business Journal is offering some zika tips for summer business travelers.
Passengers traveling on Delta will soon be able to get all of the carrier’s in-flight entertainment for free, according to USA Today. Starting July 1, all movies, TV shows and music available from the carrier’s “Delta Studio” offerings will be complimentary on all of Delta’s two-class planes.
Free entertainment may be one of the few perks in the back of the plane. The middle of the plane, however, is becoming so posh that Business Class is replacing First Class, with some carriers eliminating the First Class option all together, according to The Economist.
There was a decline in occupancy in US hotels, according to Travel Daily News. The decline is expected to continue through 2016 and 2017.
There is a business travel boom underway in the Baltics, according to Buying Business Travel. Estonia, Latvia and Lithuania were among the top growth markets for UK business travel with visits in 2015 to Estonia up 697 percent on the previous year and spend up 745 percent.
Travelers to Europe this summer are using caution, but are not cancelling their trips despite the State Department’s travel warning, according to 4 Hoteliers. European-bound travelers are, however, more likely to insure their trips this summer.
Your list for this week comes from USA Today: The World's 20 Longest Dreamliner Routes
On Friday, June 3, all GBTA Direct and Allied Members received an email from Election Services Corp. (ESC) announcing that absentee ballots are now available for the 2016 GBTA Board of Directors Election. You may also view the email below. If you did not receive it, please check your spam folder first. If it is not there, please contact ESC by email at email@example.com or call toll-free +1 866 720 HELP (4357) to ensure you receive future election communications.
The election is your opportunity to make your voice heard in selecting the future leaders of GBTA. I thank you in advance for participating either via absentee ballot or by voting in-person at Convention. Please note you have until June 16 to request an absentee ballot and until July 11 to submit your vote via absentee ballot.
Make Your Voice Heard
Determine the Future of GBTA
Absentee Ballot Request Process Now Open
It is time to start choosing new leadership positions for GBTA. In preparation for the upcoming voting opportunities, please take a moment to review the election materials and platform statements in the Board of Directors Election Brochure 2016.
At Convention 2016, elections with voting by electronic means will be open starting on Monday, July 18 at 11:30am MT until Tuesday, July 19 at 6:00pm MT at the GBTA Convention at the Colorado Convention Center. Paper ballots will not be available. Results of the elections will be announced at Convention Arena on Wednesday, July 20. Individuals must be Direct or Allied members of GBTA to be eligible to vote.
If you are unable to attend GBTA Convention 2016 and vote in person, you may request an absentee ballot. The absentee ballot request process is now open. You must reply to this email to request an absentee ballot. Either click reply or click here and write "Please send me an absentee ballot." in the body of the email. The absentee ballot will be available online only.
The Election Services Company (ESC) will respond to your request and provide you with the website link and code to login and cast your absentee vote. The deadline to request the absentee ballot is June 16.
The deadline to submit an absentee ballot is July 11.
The positions up for election are:
We thank you in advance for your participation in shaping the future of GBTA.