Amex Barometer Shows Deep European Cuts Done, But No Short-Term Uptick

Only one European travel buyer in five anticipates an increase in their travel budget next year, according to a survey released yesterday by American Express. Almost the same number, 19 percent, predict their spend will fall further in 2010, and the remaining 61 percent expect no change. Amex's 2009 European Barometer surveyed 336 buyers in ten European countries in September.

The figures do at least suggest a flattening of travel spend after sharp falls this year, with 66 percent of respondents saying they have cut expenditures, while only 11 percent have seen them rise. On average, travel budgets have fallen 18 percent in 2009.

Amex's EMEA senior vice president for business travel, David Herrick, concurred with the survey that significant recovery can be ruled out for 2010. "We've seen the worst of it, but I'm not celebrating yet," he said. "It's not all going to come back next year. Any good travel manager is not going to allow a 20 percent increase back into their budget. It is going to take two to three years."

Herrick added that conceivably business travel may never return to pre-recession levels of trips per employee. The Barometer findings confirm that corporations have eliminated much of their travel for internal purposes, which now accounts for only 29 percent of all trips. This is around half of the 57 percent of trips dedicated to winning new business. Although the figures are not directly comparable, internal trips accounted for the largest slice of travel in the 2008 edition of the Barometer.

One means of replacing internal trips is through videoconferencing, adopted as an alternative to travel by 70 percent of survey respondents. Herrick said negotiations are continuing between Amex and potential videoconferencing provider partners. "We would rather cannibalize our own business than have someone else do it," said Herrick. "The videoconferencing market has grown something like 30 percent this year."

The Barometer also revealed that 94 percent of European companies with travel budgets exceeding €20 million have globalized their supplier agreements. Three-fifths have an online booking tool, up from 57 percent last year.