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The Business Traveler - US - July 2015

The Business Traveler - US - July 2015

Continuing corporate profitability has boosted the business travel market, estimated to reach $234 billion in 2015. All segments of the market – including airlines, hotels, and rental car companies – have benefited as companies boost business travel spending. Heightened demand, industry consolidation, and pricing action have been advantageous for the travel market. Travel brands that reinvest profits in mobile booking tools, automated check-in, Wi-Fi connectivity, and improved work spaces can pass the benefits along to business travelers in a meaningful way.

This report looks at the following areas:

Heightened demand puts pricing power in the hands of industry players
Men and women have different expectations for business travel
Travelers crave constant connection


OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY
The issues
Figure 1: Very important business travel amenities – Hotel and airline, by gender, March 2015
Figure 2: Business trip behaviors – Productivity, March 2015
The opportunities
Figure 3: US hotel occupancy rates, 2004-15
Figure 4: Combined business and leisure travel, by generation, March 2015
What it means
THE MARKET
What you need to know
Business travel market poised for growth, all segments on the rise
Digital technologies augment face-to-face meetings
Corporate profits drive business travel
Increase in inbound international business travel
Market size and forecast
Positive outlook for business travel
Figure 5: Fan chart forecast of total domestic business travel expenditures, at current prices 2010-20
Figure 6: Total domestic business travel expenditures and forecast, at current prices, 2010-20
Market breakdown
Airline revenues positioned to grow
Figure 7: Total domestic business air travel expenditures* and fan chart forecast, at current prices, 2010-20
Limited supply keeps hotel rates high
Figure 8: Total domestic business travel lodging expenditures and fan chart forecast, at current prices, 2010-20
Price increases to bolster rental car market
Figure 9: Total domestic business car rental expenditures and fan chart forecast, at current prices, 2010-20
Market perspective
Will virtual meetings replace business travel?
Travelers combine business with leisure
Leisure travelers look for meaningful experiences
Market factors
Corporate profitability boosts travel budgets
Figure 10: Corporate profits after tax, billions of dollars, quarterly, seasonally adjusted annual rate, 2000-14
Pricing action expected in all three travel segments
Figure 11: Share of adults and total adults who rent vehicles, 2004-14
A strong US dollar may prompt more outbound international business travel
Figure 12: One US dollar to one Euro exchange rate, weekly, not seasonally adjusted, May 2010-April 2015
Inbound international business travel grows despite strong US dollar
Figure 13: Volume of inbound international business travel, by region, 2013-14
Group bookings drive hotel demand
Figure 14: Hotel occupancy rates, 2004-15
KEY PLAYERS
What you need to know
OTAs aim to capture business customers, TMCs aim to keep them
Travel providers target women and Millennials as key audiences
Rising flight and hotel prices will challenge travel budgets
New developments help travelers track luggage
New business models move into the market
What’s working
OTAs look to capture share of the unmanaged travel market
Corporate tools catch up with travel booking trends
Airlines compete for premium transcontinental passengers
Airlines reinvest in the airport experience
Travel providers cater to professional females
Travel brands attract Millennial business travelers
Facing challenges
Overcrowding breeds disgruntled passengers
Low fuel costs haven’t moved the needle on ticket prices
Bad behavior could put employers at risk
High demand leads to hotel price increases
Figure 15: US cities with most hotel rooms under construction, May 2014
Figure 16: Average daily rate of US hotels, 2001-15*
What’s next
Luggage gets smart
Travelers forgo packed bags
Airlines enable in-flight networking
Figure 17: Delta Innovation Class to TED video, 2014
Subscription-style travel takes off
The sharing economy jumps into managed travel
THE CONSUMER
What you need to know
One third travel for business; conferences and meetings are most common
Business and leisure overlap
Opportunities for further automation
Female travelers looking for added amenities and exceptional service
Frequency of business travel
Business travel trending up
Figure 18: Business and personal domestic travel, 2006-14
One third of Americans travel for business
Figure 19: Business travel in the last three years, by gender and by age, March 2015
Business travel peaks at $75K-99.9K household income
Figure 20: Business travel in the last three years, by household income, March 2015
Reasons for business travel
Little variation in types of trips
Figure 21: Reasons for business travel, March 2015
Mixing business and leisure travel
Employees combine business and leisure
Figure 22: Combined business and leisure travel, by generation, March 2015
Business trip behaviors
Business travelers remain productive on the road
Figure 23: Business trip behaviors – Productivity, by generation, March 2015
One in five find business travel stressful
Figure 24: Business trip behaviors – Travel concerns, by gender, March 2015
Employees generally satisfied with travel policies
Figure 25: Attitudes toward travel allowance and employer policies, by generation, March 2015
One third of travelers looking for networking opportunities
Figure 26: Attitudes toward travel companions and automation, March 2015
Attitudes toward business travel
Millennials more likely to avoid business travel
Figure 27: Attitudes toward business travel – Necessity, by generation, March 2015
Opportunities to create check-in efficiency
Figure 28: Attitudes toward business travel – Efficiency, by generation, March 2015
Women business travelers look to maintain routine while traveling
Figure 29: Attitudes toward business travel routines, by gender, March 2015
Important travel amenities
Women find hotel amenities an important aspect of travel
Figure 30: Importance of hotel amenities, by gender, March 2015
Women interested in real-time flight updates
Figure 31: Importance of airline amenities, by gender, March 2015
Loyalty programs popular with business travelers
Half of business travelers enrolled in frequent flyer programs
Figure 32: Frequent flyer enrollment, by traveler type, November 2013-December 2014
Legacy carriers attract the most business travelers
Figure 33: Frequent flyer enrollment, November 2013-December 2014
Consumer segmentation
Segments
Figure 34: Business traveler segments, March 2015
Figure 35: Attitudes toward business travel, by business traveler segments, March 2015
APPENDIX
Data sources and abbreviations
Data sources
Fan chart forecast
Abbreviations and terms
Appendix – The market
Figure 36: Total domestic business travel expenditures and forecast, at inflation-adjusted prices, 2010-20
Figure 37: Total domestic business air travel* expenditures and forecast, at current prices, 2010-20
Figure 38: Total domestic business air travel* expenditures and forecast, at inflation-adjusted prices, 2010-20
Figure 39: Total domestic business travel lodging expenditures and forecast, at current prices, 2010-20
Figure 40: Total domestic business travel lodging expenditures and forecast, at inflation-adjusted prices, 2010-20
Figure 41: Total domestic business car rental expenditures and forecast, at current prices, 2010-20
Figure 42: Total domestic business car rental expenditures and forecast, at inflation-adjusted prices, 2010-20
Figure 43: Total domestic expenditures and forecast of other, at inflation-adjusted prices, 2010-20
Appendix – The consumer
Figure 44: Reasons for travel, 2006-14
Figure 45: Enrollment in frequent flyer programs, by type of traveler
RESEARCH METHODOLOGY
US Research Methodology
Consumer research
Social Media Research
Trade research
Statistical Forecasting

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