Nearly three out of four travel managers said that business travel will rebound significantly this year and into the next, according to a National Business Travel Association survey released late last month.
While 71 percent of 220 respondents said they expect a rebound this year and into 2005, many in the industry have been reluctant to predict that volumes will reach 2000 levels
(BTN, Oct. 20, 2003). Yet, 54 percent of the polled travel managers said volumes will return to such heights some time this year.
"The economy and business travel are closely related, as one helps drive the other," said NBTA president Carol Devine in a statement. "While the challenges of the past few years have taught us to be cautious, economic trends and travel purchase indicators bode well for an increase in business travel, with the possibility of significant volume increases at the end of the year and into 2005."
The NBTA report stated that although the economy is staging a recovery, "Corporate travel volumes and budgets look to remain largely flat for the upcoming year, with some minor increases and decreases in both the air and hotel sectors." Just under half of the travel managers responding reported increased budgets for this year, while 18 percent said budgets have decreased.
The study also highlights the emergence of a more cost-conscious travel buyer, as the use of low-cost carriers and midprice hotels continues to rise.
Mirroring the airline trend, 61 percent of travel managers said they would use more midprice properties compared with last year. Tokyo Electron America travel manager Kevin Maguire said his company continues to expand its use of midprice properties.
"We're actually increasing the percentage, again, over last year," he said. "It will probably go up about another 10 percent. We look at it not because of the perceived value, but there is an actual value to those properties. The room cost is less, but if you look at the other things, like breakfast included or a social hour or an evening meal, it really helps offset costs."
The National Business Travel Association also asked respondents whether they are considering such online travel management companies as Orbitz and Expedia. Although nearly half have not considered the use of such vendors, 21 percent said they are looking toward using online travel management companies exclusively and 32 percent will consider it a possibility in the future. "Online industry players' strategy has made sense so far, because their overhead and back-office fulfillment processes are engineered to be at a low per unit cost," NBTA stated.
"Whatever travel restrictions are in place today more than likely will be relieved as companies go after new and expanding business," said Dave Hillman, a consultant with New York-based Hillman and Associates. "The cost consciousness will stick. I think with the technology that's been put in place in the past two or three years with respect to booking, payment systems and expense reporting, companies will continue to scrutinize compliance. This has given companies the ability to travel smarter as they travel more with a more robust economy."