Fleet News

Opportunities and hurdles expected in business travel market in 2012

The UK business travel market was in decline before the start of the economic global downturn in 2008/2009, which has since added fuel to the fire in terms of the market’s recent deterioration, according to Business Travel, a new market assessment published by Key Note.

However, consumer research commissioned by Key Note suggests that shorter domestic business trips have grown in popularity among UK residents, providing a boost for an industry that has suffered increasing travel costs and competition from new technologies, such as video conferencing, which has made business travel unnecessary to a certain extent.

The overall market for domestic and outbound UK business trips has been in long-term decline. 2009 was a tough year for the outbound sector, with the volume of trips declining by 22.8%, while domestic trips only fell by 1.1%. 2010 saw the decline in outbound travel ease to 3.6% in terms of volume.

However, domestic business travel suffered despite the return to economic growth in the UK, after falling by 6.6% in 2010.

Consumer research commissioned by Key Note specifically analysed the domestic business travel market. The survey revealed that short trips were by far the most popular among UK residents, with travel most prevalent among men. The survey also analysed respondents’ opinions regarding various issues inherent to business travel. The majority of those surveyed revealed that they would consider flying with an economy airline for business travel and many agreed that video conferencing was a viable alternative to business travel.

Furthermore, in recent years, economy airlines have continued to increase the number of destinations that they fly to and, as such, demand for business flights may reduce even further. The impending addition of aviation to the EU’s Carbon Trading Scheme and proposed hikes in Air Passenger Duty (APD) will also put strain on intra-European and long-haul flights. Travellers could turn to rail (particularly high speed) as an alternative to business air travel, as its integration improves across Europe.

However, it is not all doom and gloom, the 2012 Olympics should provide a significant boost for domestic business travel. Technology, while also providing competition, will improve the efficiency of business travel, with travellers able to work while in transit. Key Note forecasts that domestic business travel will increase in 2012, while outbound travel should also pick up due to improved economic stability from 2013 onwards.

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