BCD Survey: Clients See Spending To Rise
More than half of 333 travel buyer respondents to BCD Travel's eighth annual client travel program survey expect overall travel to increase next year, despite a 2009 projected airfare increase of 8 percent to 10 percent over final 2008 fares. In examining effects of rising prices, capacity cuts, travel pattern changes and policy compliance struggles, BCD recorded in its Insight on Corporate Travel study a massive shift in procurement's influence over travel, with 74 percent of respondents reporting via procurement, a 30 percentage-point increase from last year's 219-respondent survey.
Less than half said demand will increase in North America and Europe and 70 percent forecasted increases in Asia. "We see fewer U.S. domestic trips, but more trips in the emerging markets, Asia and some parts of Europe," said BCD Travel executive vice president of global business solutions, sales and marketing Louise Miller.
While reducing the overall trip cost is a key objective, many will be hard-pressed to do so with strong price increases expected and 60 percent of respondents having no influence over demand.
Meanwhile, BCD Travel and its Advito consulting unit forecast smaller increases for 2009 U.S. hotel rates. They see domestic room rates increasing up to 3 percent, international room rates to rise 4 percent to 8 percent and car sector costs to increase 2 percent to 6 percent, mainly from fuel and fleet replacement costs.
"We have seen softening in rates," said Advito general manager Mary Ellen George. "Still, hoteliers have been good at pulling contracts if you can't deliver on your room nights. We haven't seen it yet in the major cities, but it isn't going to be the same negotiating climate as last year."
The survey also showed 23 percent of buyers citing as their top air challenge obtaining effective discount levels, and 57 percent claiming air compliance of more than 70 percent, an 8 percentage-point decline from last year. Another 14 percent said their top air challenge was negotiating fee waivers with preferred suppliers.
"The days of negotiating a few contracts and checking on them a couple times of year are long over," George said. "It is a tough climate right now, but if you can prove that you have appropriate measures to drive usage and manage your contracts, you'll be successful at the negotiating table."