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Shared economy: business travel must become more efficient

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VDR presents its 2015 business travel survey at an ITB Academy webinar

Overall, the shared economy has achieved only moderate success with the business travel market. That is one of the findings of the latest VDR business travel survey which was presented today at an ITB Academy webinar by VDR president Dirk Gerdom and VDR chief executive Hans-Ingo Biehl. According to the survey, only half of those companies who are familiar with sharing economy services allow car hire bookings to be made with sites such as DriveNow, Car2Go and Flinkster. Among larger companies only about one third permit overnights with airbnb or the use of ride-sharing services. Accommodation options offered by the shared economy are mostly booked by small-sized enterprises.

“Despite business travellers often being the first to recognise new transport trends, the reverse seems to be true here. In addition to travellers’ personal preferences, there are legal aspects, insurance and safety considerations that probably also play a large part“, said Dirk Gerdom, president of the Business Travel Association VDR. On top of that, existing IT processes were ill-equipped to handle these types of business travel bookings and invoices, Gerdom added.

Business travel supports the German economy

From 2013 to 2014 the overall number of business trips rose to 175.8 million, marking an increase of 2.8 per cent. In 2014 a total of 10.1 million business travellers spent 49.2 billion euros. The average duration of a business trip was 2.1 days, the same as in 2013, with per diem expenses falling slightly from 148 to 146 euros in 2014. Business travellers spend these sums, which is double that of vacationers, regardless of the time of year. This safeguards jobs in the hotel trade, catering and the transport sector.

In 2014 service costs rose across the board, with the exception of car hire. At plus 0.3 billion euros, the biggest annual cost increase was once again in catering. Furthermore, in 2014 ‘other expenses’, which for several years have also been on the rise, came to a handsome five billion euros. They include transport costs such as fuel, cab rides, public transport, mileage allowances and other items as well as parking fees. Larger companies usually pay higher communication expenses than smaller ones as their employees travel abroad more often. Compared to private enterprises the public sector spends proportionately less on communication, credit cards, hospitality and gifts, and instead more on trade fairs, conferences and seminars.

Increase in rail travel and record number of hotel overnights

The rail sector gained a bigger share of the travel market. Measured over a period of five years, proportionate spending on rail travel rose from 16 to 19 per cent, mainly to the detriment of car hire companies. Overnights and air travel continued to account for one quarter of expenses. As predicted in 2014, last year’s marginal decline in overnights was more than made up for, with a figure of 63.7 million marking a new record. Nine out of ten business travellers chose three and four-star hotel accommodation, reflecting a consistent trend in Germany over recent years. As categories, personal recommendations and ratings have become more important than conventional ranking methods. Traditional star ratings are still observed but no longer decisive for choosing accommodation.

In recent years coaches have been discussed as an alternative to rail and car transport for business travellers. In actual fact small and medium-sized enterprises make much greater use of coach operators than other companies. And even major enterprises, usually those whose travel managers are keen to save costs, are not wholly averse to the idea: about one in ten have coaches on their list of transport alternatives. 14 per cent of public sector business travellers make occasional use of coach travel.

Overall, the VDR is confident that the economic situation will remain stable in 2016. That is also reflected in the forecasts of the majority of business travel managers: in general, they expect the volume of business trips to remain stable or increase slightly in 2016.

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