Germany is the largest business travel market in Europe but what are the underlying trends and the outlook for the next few years? fvw’s Oliver Graue explains…
According to a recent survey by business travel management firm CWT, German business travellers spent less on travel in the second quarter of 2015 than 12 months earlier. The average cost of a business trip dropped by 1.3% to €418. This was mostly due to falling air and rail fares which outweighed higher car rental and hotel costs.
Against this background, fvw.com spoke with Oliver Graue, editor of BizTravel, fvw's business travel magazine, about trends and prospects for the German business travel market.
fvw.com: Oliver, how does the German business travel market compare with others in Europe? Are there any important differences?
Oliver: With annual revenues of nearly €50 billion, the German business travel market is the largest in Europe. At the same time, German firms are probably the most cost-conscious as well. The negotiated hotel and airline rates are relatively low, and they haggle over every cent for travel agency fees. What’s more, compared to the UK, for example, the travel agency market in Germany is highly consolidated and even SMEs are switching to online bookings to save money.
fvw.com: What are the main business travel trends at the moment in your view? Is it still all about cutting budgets as much as possible and booking cheaper travel?
Oliver: Yes. Saving money and budget cuts are still the most important trend. However, due to the rising shortage of skilled staff, some companies are ensuring that their employees can travel comfortably. For example, with nonstop flights instead of transfer connections, and business class or at least premium economy on long-haul flights of more than eight hours. In addition, firms are questioning more than ever whether a trip is really necessary or whether it can be replaced by a web conference. That saves staff time and stress, and the company saves money. Other important issues are travel risk management and consolidation of MICE costs.
fvw.com: What advice you do have for international hotels, airlines and travel suppliers who want to target the German business travel market?
Oliver: Competition in Germany between nearly all travel suppliers is very intense, and prices are thus low. Suppliers can score with offers that enable companies to improve their efficiency (e.g. with outsourcing) or with an unusually good service without being much more expensive than their competitors.
fvw.com: Is technology gradually taking over in business travel or is there still a role for business travel agents?
Oliver: Technology is increasingly gaining a decisive role in business travel. It’s a vicious circle. Suppliers are differentiating their products more and more, and trying to make them less transparent, in order to make simple price comparisons more difficult. But firms are reacting by using ever more complicated technology to make comparisons possible despite this. Business travel agents have a chance if they can stand out in this complex market and provide transparency. They are hardly needed any longer just for bookings.
fvw.com: Let's gaze into the crystal ball. What do you think the German business travel market will look like in five years' time?
Oliver: Mobile services will play a big role. For example, travellers will have to be provided via an app with a complete travel plan including re-booking options if there are delays. But they will have to remain within the travel policy at the same time, which is a tremendous challenge for travel managers. Business travel will also be impacted by big data. Travel managers will hardly spend any time with procurement or negotiating. Instead, they will manage and analyse data, and achieve savings that way.
fvw.com: Oliver, many thanks for your time. We're looking forward to the next issue of BizTravel!