<B> Canadian Corps. Spend More On U.S.-Bound Travel</B>
By Carolyn Green
<I>Markham, Ont.</I> - Canadian corporations are allocating a significantly larger share of their T&E budgets to transborder travel than in previous years, concluded the latest American Express survey of Canadian Business Travel Management.
The study, conducted from June to September last year in conjunction with the Conference Board of Canada, tracked travel management practices of more than 700 businesses, educational institutions, and government departments and agencies.
Spurred by a general increase in corporate travel, the need to pursue new business opportunities emanating from the North American Free Trade Agreement and expanded air service resulting from an Open Skies pact, Canadian firms in 1997 experienced a dramatic increase in U.S. travel purchasing over 1994.
The survey said that 21 percent of private-sector T&E expenditures in the past year went to U.S. travel, compared with 15 percent three years prior. "The pie is bigger and the growth is coming from international and U.S.-bound travel," said Pam Arway, senior vice president and general manager of Amex's Travel Services Group. She noted that domestic travel was 70 percent of total T&E in 1997, an 8 percent drop from 1994's domestic mix.
Arway said growing air service between the two countries, a result of Canadian deregulation and the U.S.-Canada Open Skies agreement, played a major role in stimulating U.S.-bound corporate travel. "With deregulation, companies like Air Canada more than doubled the number of flights they have into the U.S. For example, it used to take almost a whole day to get to Cincinnati. It is now a one-hour flight."
Among the study's key findings was an overall increase in T&E spending by both private and public sectors to approximately $8.9 billion in 1997, compared with $8.12 billion in 1994 and $4.34 billion in 1987, when the survey first was conducted.
Arway said the study also points to an increase in the number of Canadian employees traveling. "A much broader base of employees are traveling and we speculate that that's due to the fact that people these days are wearing two or three different hats. With downsizing, everybody's doing two jobs now and that's increasing travel."
The study also polled senior executives on a variety of travel management topics. Here are some key findings:
<ul><li>Fifty-seven percent of companies had a travel manager and of those, 93 percent spent less than 25 percent of their time on travel management functions.
<li>Despite the absence of a travel manager in 43 percent of the companies polled, 62 percent of respondents had a travel policy in place, compared with 48 percent in 1994. Of those companies with a policy, 69 percent have assigned senior management and 75 percent have entrusted business unit supervisors to enforce policy.
<li>Most of the companies still rely on traditional booking methods. Ninety-three percent use the phone, 75 percent use the fax, 7 percent reserve via e-mail and 4 percent book over the Internet.
<li>Despite efforts by travel management companies to get businesses to work with a single agency, 56 percent have consolidated their agency business, a 1 percent drop from three years ago.
<li>Twenty-three percent had preferred agreements with airlines in the past year, compared with 19 percent in 1994; 43 percent had negotiated discounts with hotels, a 10 percent rise over 1994; and 41 percent had contracts in place with car rental firms, compared with 39 percent in 1994.