Reducing costs is the top priority for travel management in nine European countries, while policy compliance and reporting are the primary focus in the United States, according to AirPlus International's recent travel management survey of more than 1,000 travel decision-makers.
Half of the respondents expected both trips, and travel costs to rise this year. Managers at "businesses with higher travel spends are more fearful of price rises than smaller ones," the survey stated. Concerns over airfare increases, cited by 55 percent of all respondents and 88 percent of those in the United States, prompted the expectations for overall travel cost increases. Air represented about 49 percent of travel budgets across the 10 markets, while hotel represented 19 percent, car rental about 10 percent and both rail and meetings/conferences 7 percent.
Respondents in Germany, Switzerland and Austria expected the most substantial increases in travel volume. By country, air represented anywhere from 42 and 44 percent of total travel budgets in the U.S. and Germany, respectively, to as much as 58 and 59 percent in the Netherlands and Spain.
Negotiated corporate deals was one cost-containment approach cited by the majority of surveyed companies. Three of five respondents said they use airline deals to yield savings ranging from 13 to 23 percent. While 84 percent of respondents with large travel budgets leverage their spending when negotiating airline deals, just 54 percent of medium spenders and 39 percent of small spenders reported such contracts.
Two-thirds of those surveyed said they use negotiated hotel deals to save between 16 and 24 percent of travel costs. Car rental contracts were cited by 58 percent of respondents and produced savings ranging from 13 to 20 percent.
Contracts for event services helped respondents save 11 to 19 percent. Such savings are significant, given that 59 percent of U.S. respondents said they expected costs in this sector to rise. Outside of the United States, just 14 to 37 percent of those surveyed said they negotiate with event service providers.
Policy tightening is another means respondents said they are using to contain costs. "Once businesses expand after a downturn, travel policy usually relaxes because issues such as employee retention assume greater importance," the study stated. "That is not happening this time," as 43 percent of respondents at companies with policies said they are likely to tighten them, and half said their policies would not change.
Procurement's increasing role in travel management could be one reason for the tighter policies. More than two-thirds of respondents predicted that procurement's role in travel management would increase. This was especially true at high-spending companies, where 64 percent of respondents--up 15 percentage points from last year--agreed with the prediction, and another 21 percent somewhat agreed. Four-fifths of respondents also noted the increased role that finance plays in travel management.
Just 11 percent of respondents "dissent from the view that business travel management will be increasingly controlled at the whole company level or globally," according to the survey. Three-fourths of respondents, up from 68 percent last year, said their companies already centrally organize business travel.
The survey also revealed that one in five responding companies had established a separate travel management department. It is part of procurement in one of 11, human resources even less frequently and finance only rarely, the study found. "Only U.S. companies usually have a dedicated travel manager," the report stated. Assistants of senior managers or headquarters' secretarial staff are responsible for travel management in almost half the cases overall.
"Companies are attaching increasing importance to travel and the need to control it. That is leading to growing centralization and consolidation, with procurement and finance taking the lead in applying more discipline to the buying and management of travel," the study concluded.
The survey also indicated significant adoption of analytical tools to better manage travel spending; more than 40 percent of respondents said they use "special electronic tools to analyze their expenses," up from 32 percent last year. Nearly half of respondents said they receive payment card invoicing electronically and 14 percent eliminated paper backups, nearly double the rate from last year.
As for future savings, respondents from high-spending companies cited reductions from electronic invoicing, automated expense reporting and reclaiming value added taxes.
AirPlus contracted research firm Ipsos Loyalty to conduct the survey of at least 100 travel managers responsible for low, medium and high travel volumes in each of 10 countries: Austria, France, Germany, Italy, the Netherlands, Portugal, Spain, Switzerland, United Kingdom and the United States. AirPlus next week plans to release a detailed analysis of U.S. travel management practices and expectations.