Steady gains: Benelux analysis

2023 marked the first ‘normal’ year after the pandemic for many and the recovery of business travel in the Benelux region highlighted that.

The Global Business Travel Association’s Business Travel Spending Forecast predicted that the Netherlands would be the 13th biggest market in the world in 2023, with a total spend of US$23,404 million (€21.6 billion). However, spend was only predicted to grow by 23 per cent year on year, compared with 43 per cent for the UK and 38 per cent for Germany.

In Belgium, the organised travel market grew by 16.3 per cent in 2023, according to the Belgian Travel Confederation. In terms of the number of outbound trips by Belgium residents, the country was already back at pre-Covid levels in terms of business trips by the second quarter of 2022, according to Statbel.

Dutch flag carrier KLM enjoyed a record year for revenue – €12.1 billion – in 2023 and generated operational profits of €650 million. This was despite problems in the fourth quarter due to limited runway capacity at Schiphol, caused by bad weather, and due to reduced fleet deployability. Rebooking and compensating customers, and hiring additional aircraft, increased costs for the airline. Capacity was also down “due to persistent global supply chain issues”.

KLM’s chief executive officer Marjan Rintel said, “We are making up for lost ground in the recruitment of engineers and pilots. Unfortunately, this meant we were not always able to meet customer expectations. Stable, manageable operations remain our priority in 2024. To this end, we’ve introduced measures that will bear fruit in the months ahead.” The airline is looking to improve its profit margins in the next three to five years.

Meanwhile, in its survey of the Dutch hotel market, Savills said that average room rates in Dutch cities have “surged post-pandemic, surpassing pre-crisis levels”. The company says that increased wage and energy costs have not hindered profitability, as most costs have been successfully passed on to consumers through increasing room prices. CBRE says that hotel room rates in the Netherlands in 2023 were, on average, 24 per cent higher than in 2019.

Over in Belgium, occupancy in Brussels hotels remains depressed compared to pre-Covid times. Average occupancy in the Belgian capital hit 68.3 per cent in 2023, compared with 59.4 per cent in 2022. Rodolphe Van Weyenbergh of the Brussels Hotel Association says that business tourism has not yet fully recovered as hotels located in the European quarter or near the airport, which rely more on this segment, and are recovering slower than hotels that benefit more from leisure tourism.

On the railways, SNCB reported a 7 per cent increase in the number of passenger journeys in 2023 compared with 2022. The operator announced an ambitious plan in July 2023 that would see an additional 2,000 trains per week enter service over the next three years.

In the Netherlands, the country’s railways suffered from punctuality problems, particularly on the high speed lines, due to infrastructure problems and staff shortages. International rail travel from the country grew in popularity once again, up 15 per cent on the previous year. Operator NS said this is because of “a growing desire to travel more sustainably”. Intercity New Generation trains were approved for use in October and have now begun operating on The Hague-Eindhoven and Amsterdam-Rotterdam routes.

The recovery in business travel came in spite of a sluggish economy in the Netherlands in particular. The Dutch economy slowed down markedly in 2023, showing growth of just 0.1 per cent. This was due to a downturn in global trade, particularly with important economic partner Germany, and the European Central Bank’s monetary policy, which is being used to fight high inflation.

Things are looking up in 2024 though with the International Monetary Fund forecasting GDP growth of 0.6 per cent and rising further to 1.5 per cent.

Belgium, meanwhile, enjoyed GDP growth of 1.4 per cent in 2023, driven by a rebound in corporate investment and strong private consumption. The IMF predicts similar figures in the next two years.

Frank Oostdam, director of the Dutch travel association ANVR, said, “Further growth is expected after the good result achieved in 2023. Companies and organisations see the absolute necessity to allow their employees to travel and are very aware of the impact on the environment. More and more companies and organisations are already taking this into account in their travel policy, and are combining this with a conscious travel policy and compensating for CO2 emissions. A large part of business travel cannot be replaced by forms of virtual meetings.”