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backEUROtalk May, 2012

Crossing Borders: BTN Research Explores Nuances In European Travel Management Practices

Business travel management practices in Europe are more similar to one another than ever, but cultural and regulatory differences continue to present challenges. A recent Business Travel News examination shed light on how travel management is practiced in eight key markets in a region that shows both consistent tendencies and much diversity.

Similarities include the high proportion of independent hotels that don't participate in global distribution systems, a preponderance of travel agency inplants, heavy use of rail, proliferating airline payment surcharges and stringent rules regarding data protection. Differences relate to preferred payment and expense systems, value-added tax reclaim rules and travel allowances.

BTN's research included a survey of those who manage and/or buy business travel in Germany, the United Kingdom, France, Switzerland, the Netherlands, Spain, Sweden and Russia. Findings show that Russia clearly is different than the rest, in terms of infrastructure, regulations and cultural orientation. Germany and the United Kingdom both have specific laws and practices that create some distinctions in travel management practices. Differences across the other countries generally are cultural and along regional lines.

Understanding these differences is essential for effectively managing programs and communicating with senior management and travelers on a multinational, pan-European or global basis.

In addition to quantitative surveys, BTN interviewed nearly three dozen industry experts, including travel managers, consultants, agency executives and other travel suppliers, and considered research from non-industry sources.

Travel management practices in Europe have become homogenized for various reasons, ranging from development of the European Union and a common currency to advancement of travel management technology and a drive by multinational corporations to globalize policies and operations.

Today, with the exception of Russia, countries covered by the study have more commonality than disparity regarding travel management infrastructure and practices. While the most noticeable differences are cultural, some of the largest and most globalized travel programs substantially have minimized those differences. But even they must account for differences in language and national identity by using different communications strategies. Despite their best efforts, some companies eyeing a globalized travel program regularly run into obstacles in Europe that prompt them to water down global objectives.

Accounting For Culture

Cultural differences that accent European business travel management should be considered regionally, perhaps by examining the major areas of Northern, Central, Southern and Eastern Europe.

Cultural idiosyncrasies and language differences always play a role in thought processes and the ways people operate and embrace new developments. Dutch author Geert Hofstede's seminal 2001 book "Culture's Consequences" studied several multinational corporations, including IBM, and identified various factors contributing to cultural differences that affect business practices.

• Power distance: inequality, centralization; who decides what

• Uncertainty avoidance: structuring of activities; technology, rules and rituals; how can one ensure that what should be done will be done

• Individualism vs. collectivism

• Ego goals: career, money

• Long-term orientation: thrift

Hofstede found organizations in Belgium and France to be the most hierarchical, followed by those in Germany, Switzerland and Italy, then the United Kingdom and Ireland, and finally Denmark, Sweden, the Netherlands, Norway and Finland. He described the typical U.K. corporate culture as an "adhocracy" where motivation is based on individual success in the form of wealth, recognition and self-actualization with a high uncertainty avoidance and low power distance. Corporate cultures in Germany, according to Hofstede, are notable for professional bureaucracy and the standardization of skills and operations, where motivation is based on individual security with a high uncertainty avoidance and high power distance. He described corporate culture in France as even more hierarchical with full bureaucracy and standardization of work processes, but along with Spain, typified by motivation based on security, relationships and career separate from family.

Hofstede quoted Blaise Pascal, who said, "There are truths in one country that are falsehoods in another." He also offered the following quip: "In the United Kingdom, everything is permitted except for that which is forbidden; in Germany, everything is forbidden except for that which is permitted; and in France, everything is permitted, including that which is forbidden."

Travel management experts see similar traits. They note differences not only in communication styles and attitudes, but also in scale. Germany, the United Kingdom and France, for example, are more likely to be home to large corporate travel programs, which tend to be led by more vocal managers. In the Benelux and Nordic countries, according to one travel management company executive, people often focus on business and don't prioritize as highly personal relationships and small talk. Spain remains a market slowly opening up to the rest of the world, but still is on its own timetable: doing business is more common in the evening than in the afternoon. In Russia, anything not distinctly Russian often is suspect. The French also tend to favor a must-be-invented-here approach to technology. Some French TMCs, for example, have developed their own online booking tools in order to offer them in the French language.

Use of corporate online booking tools is highest in the Nordic countries, followed by Germany and France. The United Kingdom and the Netherlands also have relatively high adoption rates. Due in part to their cultures, Spain and Italy exhibit more resistance to such tools and favor more use of travel arrangers. In Russia, online booking for business travel essentially is nonexistent.

"The United Kingdom is the closest you get to the American way of managing travel," according to one French corporate travel buyer. "That's just cultural. We're trying to change a lot of things here in France because that is where more than 30 percent of our travel budget is, but there are cultural issues. In France, pre-trip approval is more common" than in other European countries.

The buyer noted that his company uses the same agencies and the same tools across various markets, and added that airline negotiating is similar from one country to the next as carriers infringe on each other's territory. "The differences for me lie in policy and process and are more cultural," the buyer said. "From what you can get the traveler to do and what they resist, you can see differences by country."

His company currently is "trying to radically change our travel policy," and differences are evident. "In the United Kingdom, you just do it. In France, you have to show it at least to the unions and let them give their comments, even though you basically can do what you want. In Germany, you basically have to do it with the workers council.

"Southern Europe is definitely less technology-focused, but Spain is one of our higher-performing countries," he continued. "They have been able to drop the price of their tickets by about 17 percent in the last 11 months, making it our best performer in Europe. What they have had to go through over the past two years regarding the financial crisis has been and still is pretty tough. Their ability to adapt quickly their behavior has been quite easy and would be more difficult to do in France. Yet our operation in Spain still doesn't have an online booking tool in place, even though it would drive down those costs even further."

To read entire article, please click here.

Source: Business Travel News - GAI

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