A challenge for the travel industry

An industry with major impact on the world economy

Business travel and meetings is a huge and complex market for products and services. It employs  a lot of people and makes a lot of companies wealthy. In 2003 the travel and tourism industry in the world had a turnover of USD 1,300 billion ! alltogether (source W.T.T.C).

Like all markets it has a distribution structure between supplier and end user - and although very few have a fair clue of the consolidated distribution cost - one thing is for sure - every penny that comes on top of the original product or service is paid by the consumer, the end user. If you want to reduce expenses, the most efficient way is to reduce the distribution costs. Isn't that just common sense ?

Now, where is the problem ?

One thing is obvious - as long as the added cost is not accounted for step by step it is almost impossible to build a strategy. New global technologies are enabling short-cuts between supplier and buyer - removing messengers and middlemen who add cost without adding substance. Suppliers and buyers should be equally interested in more efficient distribution - they could share the benefit. However it seems that leading actors in the marketplace prefer the present situation or at least prefer to control the pace of changes and development

On the next pages I will give my view on the present state of the business travel industry and also suggest a few steps to take - if we want to get a more efficient  marketplace at lesser costs. This segment of the market has a lot in common with incentive travel - buyers and suppliers are very much the same.