Buyer Polls Show Decline in Travel Budgets

Two surveys released in the past week find corporate travel budgets continued to dip downward. Survey sponsors sought to portray the data as indicating that the industry had hit bottom and was poised for recovery even though one suggested that business travel may never return to previous levels.

In one study, conducted by Runzheaimer International and the Association of Corporate Travel Executives, 40 percent of 280 "corporate travel professionals" polled said their travel budgets dropped in 2003, while 34 percent said budgets remained flat compared with last year's already slumped spending. The National Business Travel Association echoed these findings in a separate study released today, which found that 58 percent of 204 travel managers polled in mid-June said that their company had decreased travel spend compared with the same period last year.

"Over the past couple of years, the business travel industry has been hit by major economic, political and health crises," said NBTA president and CEO Kevin Iwamoto. "But travel is an essential part of doing business and we will start to see a return to healthy spending as companies gradually return to normal commerce and business activity."

According to Runzheimer, 81 percent of companies polled cited that "corporate belt-tightening to improve profitability" has continued to limit air travel. Meanwhile, 74 percent of travel managers in NBTA's poll agreed "the healthy financial well-being of their company is essential for the rebound of business travel."

As air travel decreases due to corporations cutting expenses, Runzheimer and ACTE found that more organizations have integrated into their travel programs such alternatives to traditional air travel as e-conferencing, corporate jets and increased ground transportation. Runzheimer and ACTE found that 56 percent of respondents increased the use of travel alternatives in response to decreased travel budgets--of which 81 percent use teleconferencing, 70 percent use videoconferencing and 58 percent use Webconferencing.

"Increased use of technology, teleconferencing, Webconferencing and videoconferencing has gained ground and is widely accepted within many organizations," said Phyllis Schumann, senior editor of Runzheimer Reports on Travel Management. "The word 'alternative' as it relates to travel will eventually disappear. These technologies will simply be regarded as another business tool, just as the telephone, fax and e-mail."

As the National Business Travel Association contends that an economic recovery most certainly will cause a rebound for healthy corporate travel levels, Schumann said that many travel professionals forecast that corporate travel "will never return to previous levels."