Abstract
The UK business travel sector has enjoyed a buoyant period of growth since 2003. Sound economic fundamentals, strong exports performance, and an increasing number of UK enterprises have provided highly favourable demand-side conditions.
Volume trends in domestic business travel within the UK have registered consistent, if unspectacular, progress, but the picture in overseas travel has much more dynamic. Here, volumes have accelerated rapidly, driven in the main by traffic growth to Rest of World destinations, particularly the emerging economies of Asia Pacific.
In the past year, however, a convergence of the fallout from the sub-prime crisis, rising oil and energy prices, and the highest domestic inflation for several years means that corporate UK is facing a marked downturn in trading performance. IPS data is now showing some significant declines in activity during the last final quarter of 2007, continuing into 2008.
The cost of business travel has increased dramatically with the rise in fuel prices and the much-vaunted Business-only sector is now pretty much history, as Eos, Maxjet, and Silverjet struggled to make the model work. Most recently, in August 2008, British Airways announced an 88% fall in pre-tax profits for the three months to June, against what its CEO, Willie Walsh, described as ‘the worst trading environment the industry has ever faced' .
There is plenty of evidence that businesses are introducing cost-saving travel measures, using no-frills carriers and budget hotel chains.
Key report themes:
Against the backdrop of a trading picture not witnessed since the early 1990s, this report provides a wide-ranging analysis of:
- The current domestic and outbound business travel environment
- How business travellers are booking their travel
- The growth in self-booked trips
- Whether belt-tightening is a genuine phenomenon in terms of budget options/expenses etc
- Whether technological/communication developments further threaten meetings
- The prospects for incentive travel
- Whether business travel is leading the way in green initiatives, and
- The prospects for a growth in domestic and international rail travel.
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