Reports

Changing trends in business tourism The nature, value and extent of business tourism has changed significantly in recent years. Business travelers are more cost conscious than they were; when flying, they are to be found increasingly in economy class; many are self-employed; one in four is female. More and more, these travelers carry their own miniaturized gadgetry, depend upon appropriate plug in facilities in hotels, conference rooms and airports. Improved interchange between modes of travel, including more airport-city centre rail links, is a new requirement. While the traditional reasons for business tourism hold good, the latest growth areas are corporate hospitality and incentive travel. In this light, after examining the flow and character of business travel into the USA, with some emphasis on the British contribution, Charles Owen, Principal of the Tourism by Design consul- tancy, looks to the possibility of a revival of transat/antic ocean-liner travel as one means of combining business with pleasure; and he hints at a possible new role for the modern airport hotel as a leisure venue for those business tourists who, even off duty, ‘secretly enjoy the buzz and entertainment of major airpotis ‘.

Until recently. a popular image of the business traveller, favourite subject for cartoonists, depicted a florid, op-

lent, old gent tucking heartily into a five-course lunch, attentive waiter, pa- tient chauffeur and pretty secretary awaiting his commands. This fable has long since faded.

For one thing, according to Gaff’s Business Tratdler’s Guide, former posh-restaurant favourites, rich with heart stopping ingredients, such as tournedos rossini, homard a I’Amer- icaine and p&he melba are now sel- dom featured on day time menus, relatively down-to-earth country dishes or salads being a more usual fare.’ For another, today’s business traveller. besides being more cost con- scious, is usually younger, leaner, fit- ter, more alert and can remain so only by eschewing gastronomic sclf- indulgence; and one in every four of the species is female.’

Although badly hit by the 1991-97 recession. business tourism, sybaritic or not. remains an increasingly impor- tant contributor not only to the trade and prosperity of the partaking enter- prises and individuals but to the re- ceipts and profits of those in the travel and tourism industry who service the

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activity. Nowadays, the value of busi- ness tourism worldwide, representing around 25% of the total value of tour- ism, approaches some f250 billion, the fastest rate of increase having recently been towards destinations in the Far East, particularly Japan, Hong Kong and Singapore and in Australasia. And in order to earn their money, those who cater for the business traveller have to be increasingly on

their toes, for the type and its needs, both on the move and at the destina- tion, are changing and becoming more demanding all the time.

Even so, one familiar problem seems to defy solution. Despite the continuing expansion and increasing variety of hotel accommodation and the sophistication of advance booking facilities, there are quite often insuffi- cient rooms for both business and leisure tourists when most needed. In many large cities at certain seasons. particularly at the time of top-ranking trade fairs, conferences and festivals. every hotel room for miles around, from five-star downward. may be fully booked, Paris, Frankfurt, hlilan and Birmingham being among Europe’s most chronic cases. Late-coming busi- ness visitors to crowded cities some-

times find themselves having to stay at distances of up to fifty miles from where they want to bc. their ncst- morning transit thwarted by under- provision of convenient car parks. The peaks and troughs of travel demand are continuing headaches for hoteliers and, of course, for transport operators and the authorities responsible for traffic control and car parking.

Cost saving trends

One significant trend in international travel in recent years has been towards the self-employed person, travelling alone, and the middle and junior rank of employed executives, including sales representatives. Both these types, on tight budgets, tend to avoid first class and, increasingly, club class air travel and, when possible. over- night stays in top category hotels. Business people who rate ;t club ticket may trade this down to two economy tickets in order to travel with a com- panion, thus promoting business and leisure tourism simultaneously. One effect of these trends has been in favour of the full-fare economy class

airline ticket, the payment of full fare enabling the passenger to change flights and itineraries at abort notice.’

Another effect has been to improve the amenities and facilities for busi- ness travellcrs at airports. to the es- tent that some categories of visitor on business have a decreasing need to brave the heavy traffic and extra time and expense involved in transfers from airports to those city centres which are several miles distant and have no con- venient rail link. Zurich is one airport which, taking this concept to its logical conclusion, and despite its unusually extensive rail links, provides meeting and workrooms for business visitors in the no man’s land between airside and landside: the mountain can thus COITIC’

to Mahomet. obviating the need for the latter to be bothered even by the local passport and customs controls.

To attract the majority. those who arc content to go through the arrival process, hotels at or by airports are

TOURISM MANAGEMENT June 1992

becoming ever more obliging in their provision for business visitors. BAA’s new Sterling hotels adjoining Gatwick North Terminal and Heathrow’s Ter- minal -t. for example, offer all-day fully serviced business centres and, in the bedrooms, a personal fax and computer link, a guest-friendly in- formation system, 24-hour room ser- vice and, on the executive floor, such extra joys as complimentary refresh- ments, bath robes, weighing scales and ‘lounge with hostess services’. Needless to say, such hotels also offer a variety of catering facilities, or health and leisure centre and a range of dedicated function, conference and meeting rooms. With luxurious, pre- booked twin/double rooms at less than f80 a night, what better busman’s holiday for those business tourists who, even off duty, secretly enjoy the buzz and entertainment of a major airport?’

In recent years it has come to the point that, wherever business travellers roam, th_ey expect constant surroundings and a familiar array of services. At one level, ‘the best that money can buy today is by and large the four-star standard: the Hilton, Sheraton, Holiday Inn, Grand Metro- politan and Trust House Forte atmos- phere; the air-conditioned, piped- music, deep-frozen, smiling-hostess, service-included, expense-account ambience; the standardized, predict- able decor and amenities of the wide- bodied jet, the airport terminal, the hired car, the motorway restaurant. the inter-city express, the executive office’5 and, of course, even CII roulc, an increasing assortment of gadgetry. In-flight telephones, fax machines and seat-back video monitors are becom- ing usual for first-class passengers as, before setting off, are city centre check-in and free limousines, some of the latter complete with pull-down secretary’s desk and as full a range of modern office equipment as the car’s augmented batteries can cope with.’

Miniaturization is helping the inde- pendent self-reliant traveller with numerous portable aids, from shavers, electric diaries and radios to calcu- lators, computers and computer com- patible printers; and for such of these as are not battery operated, suitable

power sockets and work stations are

de rigueur at any point where the traveller, like a bee seeking honey, comes temporarily to rest.

How and why go the world’s 3.5 million business tourists? Of what they spend, air travel takes 30%, accom- modation 20%. car travel another 20%, with the remainder going to rail travel, recreation, shopping. For what purpose? Besides the traditional corporate or face to face visits and meetings, conferences, exhibitions and fairs, there are two newer and fast growing categories: corporate hospi- tality, whereby a host group lubricates the proceedings for its business guests with carefully organized leisure events; and incentive travel. whereby a company combines its visit or tour, usually for training purposes, often with conference or exhibition attend- ance on the agenda, and sometimes overseas, with some form of recrea- tion. For many organizers, the more exotic the venue the better, Disneyland. a Caribbean island, an English theme park, such as Thorpe Park, a country house hotel or some- where smart and exclusive on the Mediterranean being by no means beyond the pale. To Europe alone, incentive travel is now worth upwards of f6.5 billion with the UK, France, Italy and Germany as the main benefi- ciaries; and this figure is expected to double during the present decade.’

The opportunities and outlets for business tourism are now so complex and variegated and, if misjudged, wastefully expensive and stressful, that firms which specialize in guiding, organizing and servicing the business traveller are increasingly in evidence. Such firms, usually part of an interna- tional network geared mainly to the corporate sector, offer expertise which, besides ticketing and world- wide account management, includes 24-hour traveller’s assistance, and coping promptly with such problems as itinerary changes, hotel, car and meeting room reservations, visa ap- plications. lost documents and so on.

Going west

With revenue of around f22 billion representing 8% of the global market,

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Britain is the top European earner

from business tourism. In reverse the British, in modern times among the most peripatetic of people, provide an interesting, if not typical, case study of outgoing business travel, in this case the favourite destinations being, in

Europe, France, where Paris and the C6tde d’Azur are still where Britons on business prefer to be; and further afield, the USA, nowadays the most popular long haul destination for Bri- tons.

Almost 50% of long haul trips taken by Britons are to the USA: in 1990. this amounted to 2.25 million people, 15% of whom were on business. Total expenditure by the British in the USA is rising towards $4 billion, a figure which represents 10% of the overall amount spent by upwards of 35 million inbound tourists from the world at large, Britain being the biggest Euro- pean contributor; and the trend is steadily upward.” At present, the Brit- ish traveller to the USA is more often male than female, and most likely, a managerial or professional person; his fnvourite destinations will be Florida, followed by California and New York; he tends to patronize quality hotels and restaurants; and he is a glutton for places of interest provided they are easily accessible.

No review of business tourism can be complete without reference to the two oldest forms of transport since the stage coach era and the advent of steam propulsion: the ship, both the ocean liner and the short-haul packet. and the train. The latter, at least, is alive and well and in heavily popu- lated regions, with their road traffic overloads, is the most efficient. speedy and relaxing mode of transit city centre to city centre for distances up to 400 miles, or up to twice that far where overnight sleeping cars are available. The sound-proofed, air- conditioned, smooth running, high- speed train, pioneered in modern times by Japan and further developed, in both cases on specially built track, by France and, mostly on improved old established track, by Britain and Germany, with its Pullman-style first class and roomy second class accom- modation, offers the business tourist the acme in overland travel; and, on

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the key European routes, soon to be augmented by the Channel Tunnel, the train deservedly shows every sign of increasing its market share.

Scheduled sea travel, on the other hand, car ferries apart, has long been in decline and, as the most civilized and sumptuous form of travel yet de- vised, more’s the pity. On some of the once busiest routes, notably western Europe to New York, plied today some dozen times a year by QEZ> itself no stranger to the conference business, incentive travel could well spark a renaissance.

Ships of that ilk are, in effect, grand hotels afloat and, given the same up to date facilities for business people and, for those in a hurry, the option of one way by air, they can fulfil a similar serious-minded purpose while con- veying their customers in romantic yet work-induciil~ splendour, towards their promised lands. What chance that our successors, the next genera- tion of business tourists, having chal- fenged the supremacy and the claus- trophobic, pollution spreading aero- plane, will take gleefully. once more, to a life on the ocem wave’?

Charles Owen Tourism by ~es;gn 25 Montagu Street

London WIN iTB, UK

Notes ’ GoWs Business Traveliers’ Guide, Guide Associates, Croydon, UK, 1988. 2Business Travel Supplements, Financial Times, tondon, UK, 12 November 1990 and 19 November 1991. 3Greaves Travel Management Group, Len- don, UK, Chicago, USA and elsewhere. 4Gatwick Sterling and Heathrow Steding hotels, BAA, London;UK, 1991. The rates quoted were valid to 31 March 1992. %Zharles Owen, The Grand Days of Travel, Windward~ebb and Bower, London, UK, 1979. ‘Kevin Eason, Executive Cars, The Times, London. UK, 10 June 1991. 7Le March6 Britannique de Tourisme d%Affaires, Maison de la Fance, Paris, France, 1991. ‘The Uniied States Travel Indusky, US Travel and Tourism Administration, Lon- don, UK, July 1991.

Research assistance: Anita Captain of Greaves Travel, London, UK; Doreen Wif- lis Bailey of USTTA, London, UK; Rupert Owen; and Anne Bell.

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A marketing analysis of Japanese outbound travel The number of Japanese overseas travellers has shown a large increase since 1985, when the value of the yen rose sharply against other currencies. In 1987 the Japanese government announced its ‘Ten Mi~iion Program’, which aimed at doubling the amount of Japanese overseas travel from the 1986 level of 5.5 million to 10 million by the end of 199 1. In this report consultant Hiroko Noza wa analyses the growth and characteristics of travel from Japan, describes the structure of that country’s tourism ~ndust~ and looks at the prospects for fu~her outbound travel.

Major reasons for the Ten Million Program were to promote a sense of international citizenship among Japanese people and to offset Japan’s surplus in international payments by promoting overseas travel. This prog- ramme achieved its goal early - in

1990 - with a double digit annual growth rate. The total number of Japanese travelling overseas reached nearly 11 million in that year.’

The Gulf War in early 1991 had a negative impact on this growth. The number of Japanese outbound travellers is expected to decline to 10.5 million. However, a survey among the experts from Japanese tourism-related industries forecast a steady growth in the next ten years, with Japanese out- bound travellers expected to reach nearly 20 million by the year 2001, an

average annual growth rate of lo%.’ Japan’s strong and stable economy

in recent years has been a major reason for this growth of its outbound travel market by generating more dis- posable money for its citizens. But several other factors have contributed to this boom. Japanese visitors are known as high spenders. bringing large tourism revenues to host destina- tions. This reputation is substantiated by several studies showing that Japanese visitors spend two to five times more than the average interna- tional visitors in tourist destinations.3 Naturally, many overseas destinations are eager to attract the Japanese traveller.

To successfully entice Japanese vis- itors, host communities need to learn about the market’s trends and move- ments, which are dynamic. In addition to their high-spending habits, there

are several other aspects which dis- tinguish Japanese travellers from others. In accordance with their dramatic increase in numbers they have rapidly become more sophist- icated consumers of travel products, bringing multiple preferences and spe- cific objectives to their travel abroad. In order to enable host communities to establish strategic marketing plans, this article will review the Japanese outbound travel market and anafyse movements and changes in the past five years; examine the structure of the Japanese travel industry and the distribution system of overseas travel products; describe current trends and characteristics of the market: and forecast the future direction of the market.

Background: the Japanese outbound travel market in the past five years

Fuvorrrable factors

We have referred to Japan’s strong

and stable economy as a primary fac- tor in generating the Japanese travel boom. Japan’s gross national product (GNP) average was 3.7% from 198@ 86 when the world average was a mere 2.3%. Forecasters say that Japan’s GNP growth will be 4% until the year 2000, while the world average will be .3.1X.” The country’s strong economy has allowed more disposable money for Japanese citizens to travel abroad.

The country’s economic prosperity had led Japanese organizations to make investments overseas, which have included extensive investment in to~lrism-related industries. Various types of Japanese organizations. from

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