The Business of Travel

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The Official Blog of the Global Business Travel Association


Podcast: No Appetite for a No-Deal Brexit

Last week, GBTA and ITM hosted the inaugural Strategic Meetings Management Symposium in London featuring keynoter Gillian Keegan, Conservative Member of Parliament (MP) for Chichester. A travel industry veteran, she shared her unique perspective on the outlook for the business travel industry in a post-Brexit world.

On today’s episode of The Business of Travel, hear excerpts from her remarks followed by a one-on-one interview with GBTA Executive Director and COO Michael W. McCormick. Mike and Gillian discuss how she got into politics from the travel world, the path forward for Brexit and the impact on business travel and business in general.

 

 

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Brexit: Business Travelers Concerned by Threatening “No Deal” Prospect

The Clock is Ticking: GBTA Reiterates Call to EU and UK Brexit Negotiators to Agree on Withdrawal Issues and Quickly Start Discussing Future Relationship & Aviation

A few months ago, GBTA commented positively on progress achieved at the March 2018 meeting, where a way forward was finally found on Withdrawal issues, namely Citizens’ rights, the Northern Ireland border and the financial settlement. GBTA also positively welcomed the agreement found on the length of transition period, which provided some reassurance to businesses and their business travelers.

However, looking at the way negotiations have unfolded since then, GBTA’s hope that decision makers will make good progress and start negotiating the EU-UK future trade deal is fading. Despite what was announced this March, and as demonstrated by the Joint EU-UK Statement assessing the progress of negotiations published on 19 June, only minor achievements have been made and Northern Ireland continues to be a sticking point, preventing the EU and UK negotiators from moving forward on trade and aviation issues.

This has created a highly uncertain situation for business travel, and uncertainty is never good for business. Therefore, in advance of the 28-29 June EU Summit, the business travel industry calls upon European institutions to carefully consider the implications of this uncertainty for businesses and commit to rapidly opening up negotiations on the future EU-UK trade deal as well as on the future EU-UK future aviation deal.

A seamless transition towards a sound aviation deal is crucial for the economy, businesses and the business travel industry. Prospects of Brexit for aviation are alarming: obstacles for UK airlines to operate in the EU and with the rest of the world, reduced connectivity and travel choices as well as risks to travel safety and security if the UK leaves the European Agency for Aviation Safety. The practical effect of a failure to reach an agreement would be the immediate suspension of flights between the UK and the European Union.   

The EU and UK economies cannot afford a no deal. Neither can businesses nor business travelers. This is why GBTA remains committed to being involved every step of the way to advocate for the best interests of our industry.

 


Podcast: Brexit – What Happens on January 1, 2021?

On the latest episode of The Business of Travel, GBTA talks Brexit and its impact on business travel. First up, Russell Patten, CEO of Grayling Brussels and Chairman of Grayling European Public Affairs, shares his perspectives on how negotiations are going and his predictions on how Brexit will ultimately impact business travel. Next, European Parliament MEP Daniel Dalton shares his views on what is at stake for the aviation sector and what long-term success will look like after Brexit is finalized.

 

 

You can download and listen to The Business of Travel in iTunesStitcher, Google Play and your other favorite podcast directories. Be sure to subscribe to the show so you don't miss out!


Business Travelers Welcome “Sufficient Progress” Declaration

GBTA Urges EU and UK Brexit Negotiators to Quickly Start Discussing Future Relationship

More than a year has passed since Brexit negotiations between the European Union and the United Kingdom officially started, which gave both the EU and the UK until March of 2019 to decide on the conditions of the UK’s departure from the EU. Following numerous negotiation rounds between both governments, it seems that a way forward has finally been found on phase 1 issues, namely Citizens’ rights, the Northern Ireland border and the financial settlement.

With this “sufficient progress” achieved, the EU expressed its readiness last week to enter discussions on a transition agreement and “its desire to establish a close partnership between the Union and the United Kingdom”. This is good news welcomed by the business travel industry. But the devil is in the details and full clarity on the transition and the future EU-UK relationship, which are highly likely to impact how business travel operates between the EU and the UK, is yet to be found.

Uncertainty is never good for business. That is why following last week’s Council of the remaining 27 Member States, GBTA urges European institutions to officially start the discussions on transition and on the second phase of negotiations quickly in order to give more time, clarity and certainty for the travel industry to prepare and adapt to all these expected changes.

  • Air transport is one of the key issues to be addressed for the business travel industry. If the UK doesn’t remain in the common aviation area after it officially leaves the EU, there will be obstacles for UK airlines to operate in the EU and with the rest of the world. This could reduce connectivity, travel choices and therefore business travel opportunities. Depending on the UK’s membership to the European Agency for Aviation Safety (EASA), divergence in security or air traffic rules could also appear. Michael Huerta, head of the U.S. Federal Aviation Administration traveled to London and Brussels last week to talk with both sides on the importance of clarity on whether the UK can retain its role in EASA. Huerta said it is important to have this clarity early in the new year as it will be “absolutely critical” to understand how aviation safety will be governed in the UK.

  • As for travelers, they could face longer queues and delays if it the UK decides to introduce restrictive border checks or even specific working visas for citizens of certain EU countries to reduce influx of economic migrants. However, any visa regime between an EU Member State must be negotiated at the EU level, meaning that the UK cannot take a specific approach for one EU country – or it would face retaliation measures from the EU.

  • The financial upheaval and pending changes to trade and immigration rules would also raise many concerns in corporate management and travel offices – causing some postponement, and even outright cancellation, of business trips. It may also trigger travel budget constriction as management seeks to hedge the uncertainty.

To manage these uncertainties and potential changes to the way business travel will operate in the EU and in the UK, transitional arrangements will be needed to enable the industry to have enough time to adapt to new regulatory and economic environments.

The true impact of Brexit on the business travel sector will only be fully revealed as time passes. But GBTA will be involved every step of the way keeping you up to date on how this will impact our industry and advocating on your behalf for the best interests of our industry.


The United Kingdom: Gaining Momentum

The UK boasts the second highest level of spending on business travel in Western Europe according to a recent forecast from the GBTA Foundation. In 2014 business travel spend in the UK totaled $43.5 billion USD – 5.4 percent growth over the previous year. UKpic1_WesternEurope2015H1

GBTA expects momentum to continue to build with business travel spending advancing 5.8 percent in 2015 and another 6.2 percent in 2016. Thanks to a weaker global economy, this growth will be driven more so by domestic business travel than international outbound travel. UKpic2_WesternEurope2015H1

This growth is great news for the UK which experienced abysmal business travel performance in 2012 before small improvements in 2013 led to this growing momentum.

Also, check out the 5 Key Takeaways from the entire Western Europe forecast.


5 Key Takeaways from GBTA’s Western Europe Business Travel Forecast

Business travel in Western Europe is finally standing on solid ground. Companies however are still showing a penchant toward saving for the future in case the economy backslides - that pessimism is slowly starting to abate, but optimism has not fully set in. Still, the stronger economy, lower energy prices and smart fiscal policies are pointing to a strong 2015 and 2016 for business travel throughout the region. 2015H1_WesternEuropeBTIpic

Last week the GBTA Foundation released its semi-annual business travel forecast for Western Europe predicting spending growth for the region this year and next.

Here are five key takeaways from the study:

  • Business travel spending in the five markets registered an estimated gain of 4.9 percent in 2014 to €1B ($186.3 billion USD). Spending is expected to increase by another 6 percent in 2015, to €154.79B ($197.47 billion USD) and 6.1 percent in 2016 reaching €164.15B ($209.41 billion USD), as economic momentum propels business travel spending forward.
  • Germany and the UK led the way in business travel spending, but Spain’s business travel market also saw a notably strong business travel performance in 2014. 
  • The GBTA Foundation is seeing a shift toward domestic business travel demand driving growth more so than international outbound travel (IOB) as IOB spending will continue to remain challenged through 2015.
  • Much of the growth of the European economy is driven by consumption and capital spending.
  • Sharply lower energy prices are providing another boost for Europe’s consumers. Unlike a tax refund, this income boost will accumulate slowly with each successive utility bill or petro fill-up, so it will take time for the benefit of lower oil prices to be fully realized.

Latest Forecast Shows Good News for Western Europe

Today, GBTA released our latest GBTA BTI™ Outlook – Western Europe report, a semi-annual analysis of the five most critical business travel markets in Europe: Germany, the UK, France, Italy and Spain. These five markets together form the lion’s share of business travel in the region acting as a good barometer of the health of the entire European business travel market.

WEurMarch2014_1

Things are looking up for the region. For the first time since 2010, we are projecting increases in business travel spend in all five markets. This is a big step. While the North – South divide still exists, and Germany and the UK will again lead the way in business travel spending for the rest of the region, France, Italy and Spain now appear to be showing solid signs of recovery.

In what will be a transition year for the European economy, business travel spending is expected to grow 5.1 percent in 2014 followed by an additional 6.5 percent increase in 2015 reaching $198.6 billion USD. Finally, it appears that the 2012-2013 recession is over and Europe’s economy is on more solid ground. Of course there are still risks to the recovery including the sovereign debt crisis, oil prices and emerging markets currency risk, but with rising GDP, improving corporate profits and increasing business confidence things are looking up for business travel growth.