Business Tourism Trends Update - November
Business Tourism Trends draws together some of the latest news and research on business tourism,
including trends, insights, buyer planning/booking behaviour and competitor decisions.
The reports and news items which have been used in this update are referenced under each item,
and are available from the publishers’ websites. A list of useful sources are provided at the end.
If you have any feedback or suggestions about this publication, or if you would like to be alerted to
the next issue, please email firstname.lastname@example.org.
Organisers are now looking for venues ‘closer to home’ in an effort to cut travel costs.
Within the European market, Barcelona, Lisbon and Amsterdam have all seen a reemergence
in popularity, due to competitive rates during the economic climate. London has
also performed well, despite a less attractive currency for foreign visitors and hosting the
2012 Olympic Games.
The UK was also cited as having the 2 nd highest level of spend by business travellers in
Western Europe, behind Germany.
Despite the economic downturn, meetings in 2012 are rising from 2011, and more meetings
are being planned. Shorter and smaller meetings are a growing trend. Organisers are now
looking to do more during their meetings with a smaller audience, in order to improve
delegate engagement. The incentives market has also suffered from cost cutting initiatives,
with a decrease in gifts being recorded in 2012.
Technology continues to grow in importance throughout the business tourism sector. There
are numerous forms of social media now available to make events more accessible and
interactive with delegates. Smartphones and tablets are becoming more integral for
delegates’ every day business. Mobile devices are expected to increase interaction at events,
with delegates using them to communicate with speakers before, during, and after the
event. Whilst many support and embrace the use of technology, in a push for more cost
effective methods of conferences (such as virtual meetings), there still remains an argument
for the importance of face-to-face interaction, which is deemed as the most important
element of meetings.
North American business travellers are still feeling the effects of the economic downturn,
with fewer employees being allowed to attend meetings. Cost cutting limitations have also
been applied to delegates in order to control spending whilst in attendance. Recent research
has found that US hotels had a record year, amassing $1.85 billion in surcharges, including
WI-FI and telephone calls.
Business Travel & Tourism in Scotland
Figures for Jan-May of 2012 indicate that there has been an increase of 39% (256,000) in domestic
business tourism trips, from the same period in 2011. Nights have also seen an increase of 24% and
expenditure has seen a healthy increase of 59% to £262 million.
Business Travel to Scotland (Domestic) Jan-May 2012 % Change Jan-May 2011
Trips (000's) 918 +39%
Nights (000's) 1964 +24%
Expenditure (£m) 262 +59%
(Figures provided by Great Britain Tourism Survey)
These figures suggest that despite economic uncertainty trips, spend and number of nights has not
decreased, possibly due to the proximity of the venue for delegates. The business traveller is able to
utilise a greater amount of capital if travel costs are kept to a minimum, unlike that of long-haul
events. Organisations are more likely to spend more on the incentives market, and allow for longer
night trips to short-haul/domestic events, than on long haul flights for international MICE events.
Business Tourism’s slight increase however, may be an example of tighter constraints being placed
on delegates as they have limited time for other activities whilst on business trips.
Although business travel figures for 2012 look strong in comparison to the previous year, Business
tourism figures indicate that while more trips were taken in 2011, less overnight stays were utilised
than in 2012 (a decrease of 1.2%). This may indicate cost saving initiatives by organisations in order
to cope with the economic downturn, and utilise day visits over overnight stays. It had been
suggested that business travel and tourism had suffered due to a ‘double-dip’ recession however,
positive employment figures and levels of investment would suggest that the sector remains in a
healthy condition despite economic woes.
The main overseas markets to Scotland in 2011 for Business Tourism, in terms of volume of trips,
were the USA, Germany, Norway, The Netherlands and France. In terms of spend the list is
consistent, with Denmark now substituting Norway. The inclusion of Denmark and Norway are
predominantly included due to the oil industry based in Aberdeen.
Research from the Scottish Chamber of Commerce (SCC) indicates that there has been a gradual
decline in the conference/function facilities sector within Scotland. Trends for the demand for
conference/function facilities were recorded to be weaker than the demand for accommodation
within Scotland. It must be noted that, these findings are based on the SCC’s own research, and may
be a small sample size, which makes it difficult to measure the findings correctly.
Developments within Scotland
Scotland’s reputation amongst the meetings and conference sector looks set to excel within the
coming years. An injection of £2 million over the next three years from the new conference bid fund
(aimed at attracting more business tourism to Scotland), with a particular focus on scientific and
knowledge based industries, will take place in order to compete to host larger international
meetings. The new conference bid fund is expected to boost business tourism in Scotland by over
20,000 delegates each year, and build the competitiveness of Scotland’s cities and destinations
within the International conference market.
Topping this £2 million injection is a further £2 billion investment in to the business tourism
infrastructure. This is aimed at regenerating and boosting facilities across Scotland. Benefitting
Victoria & Albert (Dundee) - 1,500sqm international centre for design is set to open in 2015 as part
of a spectacular centrepiece for the newly regenerated waterfront area.
Edinburgh International Conference Centre - 2,000sqm function space extension is due to be
opened spring 2013.
The Edinburgh Assembly Rooms - Recently finished a £9.3million restoration to the iconic 18 th
century landmark and reopened on 20 th July. The venue has also been supported by a number of
additional business ventures such as Jamie Oliver’s ‘Jamie’s Italian’ and boutique high street brands.
The Hydro (Glasgow) - Part of the River Clyde regeneration programme, the 12,000 capacity Hydro
Arena will be billboarded as one of the world’s busiest entertainment venues and will also offer
support to the neighbouring SECC. The Hydro is set to open in September 2013 before the SECC
hosts a number of Commonwealth Games events.
Source: Meet Pie
Meeting Market Trends 2012
Research from ‘Benchmark Hospitality’, (a leading US-based hospitality company) examined some of
the key 2012 trends in the meetings market. The report highlighted the top ten 2012 meeting trends
for a number of properties owned by the firm, that are affecting the sector.
Meeting demand has been growing stronger than it has since 2008, with venues and hotels now able
to be more selective in their choice of bookings. This trend is reflective of the ‘strength of demand’
and ‘flexibility’ of venues, which is now decreasing.
Traditional meeting spaces are no longer the key aspect of a successful venue. Destinations which
are abroad, but closer to ‘home’ are becoming more popular, in order to keep costs to a minimum.
This finding has been reinforced by Europe, which is now growing in the MICE market, as UK
organisations look to venues within the short-haul market. A panel discussion at Hyatt’s UK fair
discussed the re-emergence of Barcelona, Amsterdam and Lisbon, due to competitive rates within
the current economic climate. Discussions also pinpointed the growth of London as a MICE
destination from firms outside the UK, despite higher rates than competitive destinations.
There has also been a growth in more niche venues to host meetings in order to give a more
personal feel for attendees. This is linked with the growth in teambuilding exercises within the
meeting and conference sector. Many organisations are now looking to combine their event with
teambuilding exercises, in order to create a more memorable experience for attendees, and enticing
investment in to the organiser’s products and services.
Research by American Express Meetings & Events found that meetings in 2012 are increasing from
2011 and with more meetings being planned. Shorter and smaller meetings are a trend being
identified for 2012, with organisations looking to do more with less, and hold a higher number of
meetings. Sustainable meetings and conferences are also growing, with 47% of hotel suppliers
stating clients are requesting/requiring sustainable practises at events.
Source: Benchmark Hospitality / American Express / ABTN
Research by the Global Business Travel Association (GBTA), has identified the UK as having the
second highest level of spending on business travel in Western Europe in 2011, behind Germany.
Although the UK suffers similar regional woes as mainland Europe, it has been able to diversify due
to having its own currency and monetary policies, bringing a level of flexibility during the recession,
making business travel a healthier environment.
Business travel spend in the UK is predicted to rise by 0.7% in 2012, and total spending on domestic
business travel is expected to rise to 2.7% in 2012. The Olympic Games will also have brought about
a level of displacement for business travellers, but it is expected that the UK will recover, with events
affected by the games, to be rescheduled later in the year. It is also expected that the UK will
prosper against Southern European destinations due to the strength of the Pound against the Euro.
Research by BMEIS identified some of the key trends developing within the Association meetings
sector, namely the belief that social media and virtual meetings will never replace face-to-face
meetings. 37% of respondents (from a sample of over 200 businesses), felt the connection of a faceto-face
meeting is key to developing relationships, and interacting with other attendees. This is
reinforced by the importance of networking at events, with 70% of respondents believing this is one
of the key aspects of Association meetings.
The expectations of delegates at Association events have increased. Event programmes are now
expected to be packed with incentives, and opportunities to entice delegates to invest within the
hosts products or services.
Growth in Technology
Technology is now seen as an integral part of the meeting and conference sector, with numerous
forms of social media available making events even more accessible, and interactive to the audience.
The growth of low cost apps for smartphones are helping to increase connectivity between
attendees, enabling insights to be communicated to a greater audience.
Social Media sites such as Facebook, Flickr, LinkedIn and Twitter are now essential to the meeting
and convention market, as they allow for information to be distributed to the correct audiences.
Mobile devices are also transforming the meeting and conference sector. A study by FutureWatch
found that 80% of meeting professionals use smartphones, and other mobile devices in their daily
jobs. There has also been a growth in the use of tablet devices within the sector, giving attendees an
easy method of note taking, and communicating insights almost immediately via mailing systems.
Tablets are expected to increase in use during events, and may eventually lead to blogging, Question
& Answer sessions, making events more interactive.
Research conducted by the British Meetings & Events Industry Survey (BMEIS), further discussed the
importance of technology within the meetings and conference sector. From a sample of 632 meeting
and conference organisations (based in the UK in 2011), over 50% of corporate respondents use
Social Media to communicate with delegates before, during and after the meeting. Virtual meetings,
in addition to face-to-face meetings, have increased to 20% in both corporate and association
sectors. BMEIS found that technology has been growing since the previous study.
It has been noted that not-for-profit organisations have also embraced social media to a greater
extent than the corporate sector. This may be due to the informal nature of certain association
market communities, whereas the corporate market is considered to be more formal, and security
aspects of social media may deter them from fully embracing its services.
Social media was prevalent at VisitScotland’s annual trade event Expo in 2012, with 681 tweets
being communicated via smartphones and other portable devices. It is estimated that 74% of the
916 attendees used social media communication whilst attending the event.
The Wider Environment
Source: Corbin Ball / VisitScotland Research / BMEIS
Research conducted by Egenica in 2012 reviewed the macro environment of the hotel, and aviation
sectors pricing rates and how this affects the Business Tourism industry. Research found that
average daily hotel rates were up approximately 6% in North America, 5.7% in Asia Pacific and 3.3%
in Europe. These increases mainly revolve around the increase in demand, coupled with a slowed
increase in supply.
Average airfare prices have also seen an increase year-on-year of 6% in North America and Europe,
and a 3% average rise in the Asia Pacific region. The reasons for these increases in Europe include
rising fuel costs, tightly managed capacity, and financial vulnerability, which have been coupled with
competition from low cost airlines, and high speed rail.
These findings indicate the pressure placed on the meeting and conference sector. It also supports
the rising trends of finding venues closer to home, and the increase in virtual and remote meetings,
as overall travel packages for attendees are increasing to unaffordable levels.
Research from the World Travel & Tourism Council (WTTC) investigated the impact of what Business
Tourism would look like in 2 years, if business travel is cut by 25%. Results indicated that if this were
to occur, global GDP would be 5% lower than it would be over a 5 year period, without the sudden
cut. Global employment would also decrease by 1% each year based on this scenario, totalling a
potential 30 million job losses. Although the effects would not force a world recession, the global
economy would grow at a slower rate, if business travel were to progress at normal levels. However,
after a five year period, growth would begin to return to a baseline pattern figure of 4%, but the
levels of GDP and employment would remain lower than baseline predictions.
North American business travellers are still feeling the effects of the economic downturn. Over a
third of the business travellers surveyed by ‘USA Today Travel’ during August 2012, found that fewer
employees are allowed to travel to meetings than a year ago. Research also found that around a
quarter of respondents are practising more cost-saving daily spending limits than a year ago, and
23% are staying less frequently in luxury or full service hotels. However, research by New York
University’s (NYU) School of Continuing and Professional Studies indicated that despite the economic
downturn, and constraints on travel for meetings and conferences, U.S. hotels collected a record
$1.85 billion in total fees, and surcharges last year. This record is on track to be toppled in 2012.
Surcharges could be categorized within extra spend during a trip. This would include internet fees,
telephone call surcharges and baggage holding fees amongst others.
It could be suggested that virtual meetings are becoming a more affordable alternative to face-toface
meetings, with 64% of respondents indicating that technology has helped their companies save
money on business travel. Although this may refer to the booking process of hotels and flights, it
may also be referenced to webinars and virtual conferencing.
Incentive Industry Trends
Source: USA Today / Successful Meetings
The Incentive Research Foundation (IRF) have reported that providers, buyers and suppliers are
being squeezed by the increasing velocity of change in the work place, causing planning and
response cycles of businesses to contract.
Incentives have also suffered with many organisations deciding to cut the number of on-site gifts for
delegates. This has also been coupled with organisations only choosing to send their attendees to
venues which limit travel costs. This may be to venues which can be driven to, involve a shorter
length of trip, and meetings that have fewer follow up meetings afterwards to attend, in order to
Further studies by the IRF found that smartphones, and tablet devices are playing a pivotal role in
the incentive travel market. It is predicted that by 2013, 35% of meeting and conference planners
will use mobile apps to track programs. The growth of social media usage such as Facebook, LinkedIn
and Twitter are expected to continue, connecting attendees with regular offers, which will be in
response to the state of the economy at that particular time period.
Research conducted by Corporate Meetings & Incentives, and Incentive Research Foundation during
November 2011, found that economy remains the driving force for destination decisions. The
research found that markets fluctuated dramatically during 2011, whilst sales were stable for 40% of
respondents, and this was viewed as a significant increase from 2010’s performance of 26% in flat
salesby respondents. A decline in sales was only reported by 19% during 2011, a 6% improvement
from 2010. Although evidence of a ‘stagnant’ economy was reflected by 41% (seeing an increase in
2011), this was a 7% decrease on 2010.
Results from the study also indicated that fewer cancellations were occurring in group incentive
travel, and merchandise programmes. As both sectors improved by 5% and 3% respectively. This
could reflect a desire for the market to battle through tough economic hardship, and to keep a
‘business as usual’ attitude. This can be reinforced by the majority of respondents indicating that
their travel budgets were much the same as previous years. Although 91% of respondents stated
that their travel budgets had been reduced due to the economy, weak sales were also to blame
(41%). The economy is also seen as a key reason why ‘per-person’ spending for incentive group
travel has fallen for the 3 rd straight year, to an average of $2,603.
Source: Corporate Meetings & IRF/Meetings and Conventions
Further research by Corporate Meetings & Incentives and the Incentive Research Foundation has
expressed concerns that the line between incentive travel, and meetings are beginning to blur. The
economic downturn coupled with tax implications has encouraged planners to incorporate business
content within incentive travel programmes, to maximise the potential of their trip. This finding was
reinforced with over a quarter of planners dedicating around 40% of their event to business
Source: Corporate Meetings & Incentives
MICE Trends Update
The Scottish Exhibition & Conference Centre (SECC), has been awarded a Gold Star Award
for Greenest Conference Venue, at the Green Tourism Business Scheme (GTBS). The venue
also recently launched its ‘Better Business’ campaign, looking at how positive contributions
can be made to staff, customers and its local, regional and national communities. [Green-
In conjunction to celebrate the 20 th anniversary of the resort, Disneyland Paris has recently
developed a number of team building programs, private-event opportunities, and special
offers for the MICE sector. [Disney Meetings]
Boutique Hotels are increasingly investing in marketing initiatives and incentives, to
compete against larger hotel brands, in order to lure meetings and event opportunities.
A recent survey by the International Congress and Convention Association (ICCA), and the
IMEX Group found that Association meetings are still feeling the pressures of the economic
downturn. Respondents that attended the most recent IMEX Frankfurt trade show, found
that 49% had collected less sponsor, and exhibitor income at their Association meetings in
2012 than last year. 60% of respondents also indicated that the economy had a negative
impact on their associations, and/or events in 2012 (an increase of 17% from 2011).
Virtual meetings are now increasingly viewed as a significant alternative, for organisations to
hold large conferences and events. It is perceived that virtual meetings offer solutions to
face-to-face meetings, by providing a significant cost effective venue for attendees to
communicate, and engage within. This is also viewed as a green method as it cuts down on
international travel, as well as eases travel safety concerns. [Meetings Focus]
Centaur Exhibitions has announced that it will host the Meetings Show UK, the new event
for the UK inbound, and outbound meetings industry. It will focus in particular on the
Association conference market. The event is expected to attract around 5,000 visitors, and
1,500 buyers from across the UK, and Europe. [Meet Pie]
The London Olympics generated a price increase of 87% for London hotels during the games.
Research by STR Global found that the ADR (average daily rate) for hotels, between the
opening ceremony on July 27 th and August 5 th, to be £216.42. Occupancy also increased by
3.2% during the same 10 day period to 87.7%. Not all hotels were privileged with such
prosperity, as hotels around the Heathrow and Gatwick areas suffered decline in occupancy,
as visitors opted to stay within London to limit daily travel costs. [ABTN]
Although pricing of business travel will still scrutinised next year by organisations, as
constraints continue, business trips will still be made. Findings from a panel discussion at
Hyatt’s annual UK fair, indicated that lead in times for business travel bookings, and MICE
events are continuing to become shorter. [ABTN]
Non-MICE business travel news
Virgin Atlantic will start three daily short-haul flights from Heathrow to Manchester in spring
2013. This is seen as a competitive move to combat British Airways control over the shorthaul
market within the UK. Virgin has also won slots at Heathrow, which BA had to relinquish
in order to buy BMI as part of the European Commission’s competition clearance laws.
Routes include six return trips a day to Edinburgh and three to Aberdeen, with a further six
flights to Manchester, launching on March 31 st 2013. [ABTN Herald Scotland]
Budget hotel chain Travelodge has set new constraints in order to restructure its finances by
dropping 10% of their hotels. The chain looks set to transfer 49 of their hotels to other
operators over the next six months in order to tackle debts of £1.1 billion. [ABTN]
Moscow remains the world’s most expensive city for hotels, with an average room rate of
£258.11 per room, which is a 3% rise in local currency year on year. This is significantly
higher in contrast to London, which is £164 between January and June 2012. [ABTN]
BAA has agreed to sell Stansted after an extensive 3 year battle against the UK’s competition
authorities. Despite claims by BAA that Heathrow and Stansted serve different markets, the
sale will now go ahead. This move is set to increase competition within London and allow for
new markets to enter the UK. [Business Traveller]
Almost all of the information featured in this newsletter is available freely from the website
sources provided. Below are links to some of the key reports and websites.
Scottish Chamber of Commerce - 2012 Quarter 2 business survey
Meet Pie - Meetings & Incentives Travel Archive
American Express - American Express Meetings & Events Announces its Forecast Showing an
Expected Increase in Number of Meetings Planned in 2012
The British Meetings & Events Industry Survey 2012 (BMEIS)
GBTA Business Travel Index (BTI) Outlook - Western Europe
Egenica - 2012 Global Supply Benchmarking Research and Analysis
ITB World Travel Trends Report 2011/2012
World Travel & Tourism Council - Business Travel: A Catalyst for Economic Performance
IMEX America Index of Optimism
The Top Incentive Trend for 2011
The Incentive Industry Trends for 2011