Opportunities for
Entrepreneurs in
The Business Travel
Market
Presented by
Lamon Botchway, Safwat Solaiman,
Vimala Subbraryan & Simon Thompson
Today’s Presentation
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Introduction to the business travel market
Analysis of the current market
Competitor analysis
Venture opportunities
Summary & conclusions
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References
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Introduction
Business travel: a definition
Travel for commercial, governmental or educational
purposes to a destination determined by the
business, where all costs are met by the business
(Beech and Chadwick 2005)
Developing a potential business model for the business market depends
on:
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Meeting the changing needs of customers …
before a rival can
Offering customers an opportunity to gain
advantage over their competitors
This presentation represents the first phase of how we intend to do this
SWOT Analysis of the
Current Market
Strengths
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Growth of business travel to India &
China
Strong UK economy (currency)
Growth in ABC1 travellers
SWOT Analysis of the
Current Market
Weaknesses
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UK airports are overloaded
Low margins on flight bookings –
because of competition
Low margins on hotel bookings
High internet penetration – travellers will
go for cheaper flights (Dolnicar and Laesser, 2007)
SWOT Analysis of the
Current Market
Opportunities
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Selling Business Leisure e.g. Cruise Travel
Increased business opportunities with India and
China
Travel Expense Management e.g. Handling car hire
and hotel bookings inclusive
The emergence of low-cost long haul (Jet Airways,
Air Asia X)
Hosting Olympic games in China, then London
A social networking type sites are becoming
acceptable in businesses
SWOT Analysis of the
Current Market
Threats
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Terrorism
Post 9/11: 50% drop in US hotel occupancy, 100,000 airline industry
layoffs (Goodrich 2002). UK airports vulnerable to attack (Mintel
2006). Uninsurable!
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Environmental lobby / taxation
Growth in UK Green taxation (airline ticket taxation doubled in 2007). Not
acceptable to UK consumers to outsource a non-sustainable production
methodology.
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Health fears (bird flu, SARS)
Could have a major effect, but can be mitigated by strategic planning (Day et
al., 2004).
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Videoconferencing
Acknowledged as a threat (Mintel 2006), but no significant impact in the last
10 years and not as effective as face-to-face mediation (Fullwood, 2007).
Competitors
Mintel (2006)
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Dial A Flight (www.DialAFlight.com) – is
one of the UK’s top business travel
companies. They have been in business
for more than 25 years
TD Travel Group
(www.tdtravelgroup.com) – operating for
over 20 years, this group has an enviable
reputation
Opportunities
Politically influenced
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Creating partnerships with Chinese travel agencies
Developing agencies cannot grow locally without local government
interference (Zhang and Morrison, 2007).
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Outsourcing an employment headache
Small firms struggle to expand and cope with employment law
(Harris, 2000).
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Help with unfamiliar political and legislative frameworks
Western SMEs are wary of unfamiliar legislative frameworks, especially in
Communist countries (Martin and Larsen, 1999).
Opportunities
Economically supported
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Capacity within Chinese and Indian
companies
SMEs ready to take advantage of
outsourcing
Opportunities
Socio-culturally supported
(Costa and Ferrone, 1995)
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Desire for ‘play’ to be attached to business
travel (socially responsible to travel once only)
Luxury / high end possibilities
Decrease fears from an alien culture (handholding, medical support)
Working ‘virtually’ is becoming more accepted
in this market [e.g. USTravelspace.com (2008)]
Opportunities
Technologically supported
Management information shared
between UK and overseas agent using
virtual private networks (VPN) – it can
be owned or leased where it can be
used by one organisation only and at
lower cost. Eg, communicating to
China and India (Search Security, 2008)
Summary
India and China, fastest
growing travel markets – highly
competitive
 Critical factors - adequate
capital and strong
political/regional support
 Business travel - an important
means of regional development
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Conclusions
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A market may exist for a new travel business mode –
a one-stop travel shop to match UK SMEs with
Chinese companies
Using web technology to link the UK operation with
Chinese partners will be crucial
The model could be transferred into other
geographic regions
The model could incorporate variety of profitable
activities
The next step is to research this model in
more detail
References
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Beech, J. and Chadwick, S. (2005). The Business of Tourism Management. London: Pearson.
Costa, J. and Ferrone, L. (1995). “Sociocultural perspectives on tourism planning and development”.
International Journal of Contemporary Hospitality Management 7(7). 27-35.
Day, B., McKay, R.B., Ushman, M. and Chung, E. (2004). “The new normal: lessons learned from SARS
for corporations operating in emerging markets”. Management Decision 42(6). 794-805.
Dolnicar, S. and Laesser, C. (2007). “Travel Agency Marketing Strategy”. Journal of Travel Research.
46(2). 133-146
Fullwood, C. (2007). “The effect of mediation on impression formation: A comparison of face-to-face
and video-mediated conditions”. Applied Ergonomics 38(3). 267-273.
Goodrich, J.N. (2002). “September 11, 2001 attack on America: a record of the immediate impacts and
reactions in the USA travel and tourism industry”. Tourism Management 23(6). 573-580.
Harris, L. (2000). “Employment regulation and owner-managers in small firms: Seeking support and
guidance”. Journal of Small Business and Enterprise Development 7(4). 352-362
Martin, B. and Larsen G. (1999). “Taming the tiger: key success factors for trade with China”. Market
Intelligence & Planning 17(4). 202-208.
Mintel. (2006). "Business Travel - UK - November 2006." [online] Retrieved 20th December 2007,
from http://academic.mintel.com/sinatra/oxygen_academic/display/
id=173632/display/id=173632.
Search Security. (2008). “Virtual Private Network Definition [online]”. Retrieved 8th January 2008, from
http://searchsecurity.techtarget.com/sDefinition/0,,sid14_gci213324,00.html.
USTravelSpace. (2008). “Home page [online]”. Retrieved 8th January 2008, from
http://usatravelspace.com/
Zhang, H.Q. and Morrison, A. (2007). “How can the small to medium sized travel agents stay
competitive in China’s travel services sector?”. International Journal of Contemporary Hospitality
Management 19(4). 275-285.
Business travel
Any questions?