Industry Research

Business Travel, Mobile On-Demand Define Industry Updates

Martin Romjue
Posted on April 15, 2014
Limos.com’s Doug Anderson advised operators to embrace the ASAP chauffeured clients, who are redefining ground transportation. He updated attendees of the 2014 International LCT Show on industry technology trends, Sunday, Feb. 16, 2014 at the MGM Grand in Las Vegas. Photo by LCT

Limos.com’s Doug Anderson advised operators to embrace the ASAP chauffeured clients, who are redefining ground transportation. He updated attendees of the 2014 International LCT Show on industry technology trends, Sunday, Feb. 16, 2014 at the MGM Grand in Las Vegas. Photo by LCT

Limos.com’s Doug Anderson advised operators to embrace the ASAP chauffeured clients, who are redefining ground transportation. He updated attendees of the 2014 International LCT Show on industry technology trends, Sunday, Feb. 16, 2014 at the MGM Grand in Las Vegas. Photo by LCT
Limos.com’s Doug Anderson advised operators to embrace the ASAP chauffeured clients, who are redefining ground transportation. He updated attendees of the 2014 International LCT Show on industry technology trends, Sunday, Feb. 16, 2014 at the MGM Grand in Las Vegas. Photo by LCT

LAS VEGAS, Nev. — Business travel activity and its spillover into chauffeured transportation forges ahead in 2014 as this year proves the strongest since the Great Recession, key indicators and figures show.

The stellar numbers intrigued the bottom-line driven attendees during state of the industry presentations Feb. 16 that opened the 30th anniversary International LCT Show. LCT Publisher Sara Eastwood-McLean outlined benchmark business travel and limousine industry statistics while Limos.com vice president Doug Anderson tracked the latest mobile technology trends and habits.

“This is not a limo show, but a bus and sedan show,” Sara told the audience at the opening session. “This is not the tuxedo show from the days of old. Meetings are a hot growth area, and buses are in high demand.”

Better Business Travel
The growth in the variety and quality of vans and all size buses on the trade show floor testified to the demand in business travel related to groups, road shows, meetings and conventions.

According to Sara’s presentation:

  • The Global Business Travel Association expects business travel spend to increase 6.6% this year to $290 billion, compared to $277.2 billion in 2013. That’s better than the 4.6% growth from 2012 to 2013. 2013 was beset with a mixed outlook resulting from the European debt crisis, the fiscal cliff in the states and downgraded global growth. Business travel budgets are expected to rise only slightly over last year to account for increased prices, not more volume.
  • Group travel itself will rise 4.6% this year to $266.7 billion, compared to $254.9 billion in 2012.
  • Carlson Wagonlit Travel recently published a white paper on Business Travel Trends for 2013 which found that Brazil, India and China will continue driving growth in business travel spend at almost twice the world average.
  • Service reviews will play a key role in travel negotiations. Half of business travelers already post reviews online. These reviews will hold more sway in the business travel program with the adoption of new corporate review sites.
  • Unmanaged travel programs will tempt companies with a low-control culture. The Gen Y business travelers are by nature social, mobile and keen to manage their own travel and expenses while on the go.
  • Social media strategies will be implemented by two-thirds of the global travel managers as a key action to improve the traveler experience.
  • For every dollar invested in business travel, businesses experience an average $12.50 in increased revenue and $3.80 in new profits.
  • U.S. business travel is responsible for 2.3 million American jobs; about one million American jobs are linked directly to meetings and events.
  • A 10% increase in business travel spending would increase multi-factor productivity, leading to a U.S. GDP increase between 1.5% and 2.8%, according to The Return on Investment of U.S. Business Travel.
  • Gens X and Y now make up almost half of all business travelers, with Baby Boomers down to 38%. Half of all business travelers are women. Business travel comprises 61% of chauffeured transportation industry revenues.
  • There are about 10,400 limousine and charter bus operators in the U.S. Among limousine company owners, 85% are men and 15% are women. Two-thirds work out of an office, one third at home.

Business Travel Revenues

  • 2012: $263.4 billion
  • 2013: $277.2 billion
  • 2014: $290 billion

Mobility Moves
In the second part to the SOI presentation, Limos.com executive Anderson cited the real economic growth in the last five years that has helped boost the fortunes of chauffeured transportation and business travel: Housing, up 14%; 2.2 million jobs added; 129% rise in the stock market (since March 2009).

Anderson outlined ground shaking changes in the global travel industry, with more booking options and travel policy structures deviating from traditional forms as mobile technology changes business equations. “This is becoming more of a corporate and business travel industry. There are more ground options than ever. Five years ago, it was limo or taxi. Now there are so many that this market is ripe for consolidating. Innovation out there is unparalleled.”

Anderson has been updating the industry on tech trends for at least five years. Since his first presentation in 2009, the number of Internet users worldwide has climbed from 1.6 billion to 2.4 billion, and will be at 5 billion in 2020. Key findings that are reshaping chauffeured transportation service include:

  • About 35% of business travelers are now of the Millennial Generation, born in 1982 or later.
  • Mobile devices such as tablets and smartphones now outsell personal computers by three to one.
  • Global travel spend, including the U.S. and all nations, is an estimated $1.1 trillion, according to the GBTA.
  • Mobile commerce for 2014 is estimated to reach $235 billion.
  • Airlines have consolidated in the last few years from nine major carriers to four: United, American, Delta and Southwest.
  • American Express is divesting from managed corporate travel, selling 50% of its business travel unit.
  • 59% of business travelers spend out of policy. Of those, 29% spend out of policy on air travel; 55% out of policy on hotel stays; and 60% out of policy on ground transportation.
  • Chauffeured operators need to be mobile friendly in two key ways: 1) Ensure clients can search, book, change and cancel reservations on mobile devices; 2) Ensure chauffeurs can access SMS, NAV, flight tracking and mobile web.
  • Operators also should embrace the ASAP clients, which means adjusting operations to the booking lead times that are shrinking and setting up operators so that fleet vehicles can get to a client in 30 minutes in primary geographic areas.

Limo Tech Trends

  • 93% of chauffeurs now use smartphones
  • 88% of operators are on Facebook; 56% on Twitter
  • 23% of limousine companies have a branded mobile app

Related Topics: business travel, business trends, Doug Anderson, Global Business Travel Association, ILCT 2014, industry trends, Limos.com, mobile applications, mobile technology, on-demand service, Sara Eastwood

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