France’s Leading TMCs 2022
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After a decade of uninterrupted growth, covid slammed the brakes on business travel in 2020. In France, a market worth €29.9 billion in 2019 fell to €8.9 billion in 2020 and only recovered to somewhere between €11.5 and €14.6 billion in 2021, according to the annual travel barometer produced by procurement consultancy EPSA with IFTM.
Business travel levels had improved through the year. The monthly Marco Polo Index of business travel showed that in November 2021, business travel levels were 66 per cent of the same month in 2019, although this activity fell away again in the following two months as the Omicron wave of Covid hit.
The recovery in business travel was helped a little in 2021 by GDP growth of 7 per cent, the highest growth in half a century. However, this came off the back of a larger drop in 2020, including the second quarter which included the start of the pandemic which saw the biggest decline in French economic history.
The country’s network carrier Air France KLM said 2021 corporate revenue was still low compared to 2019, around 30 per cent on average over the full year but that by the end of the year, corporate revenue was around half of pre-pandemic levels.
EPSA’s hotel barometer for the year showed that there has been a resumption of business hotel activity in France with “a North/South gradient like a weather report”. Average business rates at hotels in the south of the country had almost returned to pre-pandemic levels although those in the north had not. For example, the average rate in the last three quarters of 2021 in Nice was €157, just 2 per cent lower than the figure for 2019. However, in Lille the average rate was €100, some 30 per cent lower than pre-pandemic.
Announcing its 2021 results in February this year, France’s largest hotel group Accor said it was not waiting around for business travel to recover. CEO Sébastien Bazin said that Accor’s business traffic was down 25 per cent domestically and 75 per cent internationally compared with 2019. He added that 20 to 25 per cent of that international business could be lost forever.
Business rail has suffered too. SNCF boss Jean-Pierre Farandou said that business traffic was down 10 to 15 per cent on levels seen before the pandemic and that a full recovery was not envisaged before the end of 2023.
The biggest TMC news of the year was the acquisition by American Express Global Business Travel of homegrown online travel management company Egencia. Egencia was founded by Jean-Pierre Remy in 2000 and the company was acquired by Expedia four years later with the travel giant taking on the French company’s name for its corporate division.
Earlier in the year, fellow online player TripActions announced its acquisition of Reed & Mackay, giving the former a bigger footprint in France thanks to Reed & Mackay’s 2017 acquisition of Frequent Flyer Travel Paris.
While there was some consolidation in the agency sector, the number of failures dropped. According to business analyst Altares, the number of businesses that failed in France during 2021 was 30,000, the lowest level for three decades and helped in part by measures put in place by the French government to keep business afloat. The number of insolvencies in the travel sector dropped by 21.7 per cent year on year, with 47 travel agencies failing compared to 66 in 2020 and 64 in 2019.
Looking ahead, the French economy is set to grow by 3.1 per cent in 2022 before falling back to 1.8 per cent in 2023.