EU Study Points To Shorter Trips, More Incentives

<H1> EU Study Points To Shorter Trips, More Incentives</H1>By Paul Needham

<I>Brussels</I> - Business travelers in Europe are shortening their trips and reducing the number of room nights, according to a new study of business travel in the European Union.

But incentive trips within Europe are increasing as firms seeking to cut travel costs clamp down on trips to exotic, long-haul destinations.

The continent's large-meetings and exhibitions market also is on the upturn and appears set for steady growth, the report said.

Conducted by Horwath Axe Consultants for the EU's tourism unit, Directorate General XXIII, the study calls for a European business tourism action plan to help the industry respond to the growing challenge posed by Asia-Pacific destinations.

The report, the most comprehensive look at business travel in many years, covers individual business trips, meetings, exhibitions and fairs, and incentive trips in the 17 countries of the European Economic Area-the EU plus European Free Trade Area states.

The total corporate travel market in western Europe amounts to $206.9 billion, 70 percent ($146 billion) of which is generated by transient travel, the study found (See chart). This category has seen a rising number of trips, but reduced average spend and a decline in hotel nights since 1994. This segment's growth is likely to parallel that of the world economy fairly closely in the short term, the report said.

In the conference segment, where the 261 major venues have a total seating capacity of 538,000, there is oversupply in many areas, and existing facilities increasingly are being upgraded rather than new ones added, the report said.

"In spite of a strong increase in competition from destinations in the Asia-Pacific region, the outlook for the European market remains favorable because 80 percent of current demand is domestic or generated by neighboring countries," the report stated.

The meetings and seminars sector is estimated at more than 160 room nights a year, or 15 percent of total nights spent in hotels, and that also is expected to grow. Although there has been a clear trend toward incentive trips within Europe on cost grounds since the 1980s, European incentive demand remains significantly underexploited, the report said.

"It is anticipated that incentive travel should also experience a rapid expansion, similar to the evolution that the American market experienced," the report said.

However, Europe is losing its competitive position to rivals, in particular Asia-Pacific, the report warned. In response, the report includes a business tourism action plan to promote more partnerships within the European industry, public awareness of the business travel sector and a framework for modernization of supply.

In particular, the report suggested that standardized data should be defined and that more information about the industry should be collected and distributed to improve internal and external industry awareness of business tourism's importance.

At the same time, the European Federation of Conference Towns said its own annual survey of 70 European destinations showed the market picked up last year, following years of recession. But, following the trend in business travel, the emphasis is on smaller, shorter meetings, with restrained budgets and higher standards, as well as a rise in the number of videoconferences.

Even though people are "looking at their budgets," said EFCT chairman Pere Duran, "the market is recovering in many countries and cities," he said. "Last year we stopped the fall, and this year the recovery is very good. It is not like 10 years ago with seven-day meetings, but more meetings are taking place." Duran estimated the number of business meetings in Europe would grow about 5 percent in 1996.