Recent economic pressures are prompting a majority of companies to take action on travel expenses, according to new surveys released separately this past week by the Business Travel Coalition, KDS and the National Business Travel Association.
A Business Travel Coalition poll conducted this month of 196 corporate travel managers from 14 countries found that 26 percent "implemented emergency cutbacks in past weeks as a direct result of the financial crisis ... in addition to those implemented by many corporations throughout 2008." Within this group, 34 percent "indicated that cutbacks have taken the form of straight-up travel freezes," and 19 percent "indicated that a mandated percentage reduction in travel was emplaced."
Separate from those implementing "emergency" cuts, 40 percent of BTC's survey participants cited recent decisions to create "additional controls" on travel activities "as a direct result of the financial crisis."
Asked whether they "believe that faced with the current financial crisis, your organization is going to reduce the number of business trips between now and March 2009," 54 percent of 101 KDS clients surveyed last week said yes. Based primarily in continental Europe, one-third of respondents said their organizations have canceled international meetings, while 69 percent anticipate "stricter" travel policies and 92 percent plan to use remote conferencing technologies to reduce travel.
Three-quarters of 230 U.S. travel buyers responding to a National Business Travel Association survey conducted between July and September said they have increased the use of teleconferencing and Web-based meetings, with 31 percent reporting an increase of up to 5 percent, and 21 percent indicating an increase of 5 percent to 10 percent. Fifty-seven percent of respondents reported an increase in videoconferencing. About 80 percent said these technologies are replacing business trips.
Half of those responding to the BTC survey said their organizations were "planning additional strategic investments for 2009 in substitute technologies to air travel, such as videoconferencing," but about two-thirds said "investment in these technological substitutes will be at normal annual capital expenditure levels compared with prior years."
Regarding their overall perceptions about the future growth of business travel, half of NBTA's respondents expect some level of growth into 2009, but the other half agreed with this statement: "The deteriorating economy will continue to decrease business travel during 2008-2009." Seventy percent of buyers polled were not concerned that their jobs "might be eliminated" or their "travel department reduced because of the current situation," while 19 percent were somewhat concerned and 6 percent said their department was already recently downsized.
The NBTA survey found that domestic business trip costs rose this year by between $140 and $175, and international business trip expenses rose by between $315 and $400.
About 56 percent of those polled by NBTA were "comfortable and confident" that "all or most" supplier agreements were "working well," but 36 percent said there is a mix and 7 percent said "We are likely to miss our targets on a majority of our agreements." In a second NBTA survey, completed by 90 companies between September and October, the category in which respondents showed the most concern was airlines, for which 33 percent had "significant concern" about their company's "ability to fulfill agreements." About one-quarter of those polled said that for 2009 they expect to scale back on contractual commitments to airlines and hotels.