Following an abysmal 2009, corporate travel trends next year
are expected to build on the recovery firmly established this year, with
corporations by and large anticipating higher travel demand, overall travel
budgets continuing their upward trajectory and 2011 pricing growing in every
travel supplier category, with the exception of rental cars.
"Business travel is coming back," declared
National Business Travel Association president and CEO Craig Banikowski. "There
is no doubt about it. Given the difficulties the industry faced during this
last recession, corporate travel buyers welcome the improved conditions, and
companies are already getting their teams back on the road to help build
business."
According to an NBTA Foundation survey of 170 North American
corporate travel buyers released late last month, corporate travel budgets grew
on average 5.5 percent this year and are poised to grow an additional 4.45
percent in 2011, thanks to a combination of increased corporate travel demand,
higher supplier pricing and growing airline fees.
According to respondents, the average corporate travel
budget next year is expected to grow to $98 million, as 38 percent of
respondents anticipate more travelers and 51 percent expect their company to
log more trips. Sixty-seven percent of respondents expect higher supplier
pricing, and 64 percent point to airline fees as drivers of that growth.
Though the NBTA Foundation determined that the industry
would see a net increase in corporate travel budgets, not all companies plan to
increase their spending. In its 2011 Global Travel Outlook, Egencia surveyed
more than 300 clients, and though it found that only 4 percent planned travel
budget reductions in 2011, 43 percent expected corporate travel budgets to hold
steady. An additional 18 percent were not yet sure which direction their
budgets would go.
Despite some uncertainty, the NBTA Foundation said it has
seen renewed optimism from a majority of travel buyers. According to its
survey, 72 percent of respondents agreed that the business travel industry has
improved from a year ago, with 63 percent sharing that optimistic outlook for
the next 12 months.
This improvement in the market, however, comes at a cost to
travel buyers as suppliers increasingly wield pricing power. "Many travel
buyers are already experiencing more strict market thresholds and expect this
to result in smaller corporate discounts going forward," according to NBTA's
Banikowski, noting that the buyer's market "may slowly be turning around."
According to the NBTA Foundation survey, buyers anticipate domestic prices, not
including those for domestic car rentals, to rise between 3 percent and 4.5
percent.
Also In This
Series
Fares, Fees To Rise, Upping Air Travel Costs: No matter which way you slice it or whose forecast
you adhere to, airfares across most major regions and cabin classes are poised
for year-over-year growth in 2011, following steady air travel price increases
throughout this year.
Car Rental Rates To Hold Line: Forecasts are mixed on ground transportation rates for 2011,
though corporate car rental rates should vary little from this year's rates,
analysts said.
Northeast Rate Hikes Highlight Hotels' Growing 2011 Strength: Buyers are facing hotel rate
increases in 2011, particularly in the northeastern United States, but analysts
said hotel rates still have several years before they return to pre-recession
levels.
Corporate Meeting Negotiations Expected To Tighten: As analysts continue to shift hotel
forecasts upward for this year and 2011, meeting buyers could find increasing
room rates and hotels tightening such terms as attrition clauses and deposit
requirements, though planners also should still expect plenty of perks to be
included in negotiations.
This report appeared in the Oct. 11, 2010, edition of Business Travel
News.