More French Companies Adopting Travel Policies

<I>Paris </I>- The number of French companies adopting a travel policy has risen sharply in the past year, a new survey shows.

The annual Barometre carried out for Havas Voyages, American Express and the French newspaper <I>Le Figaro </I>reveals that the number of companies with a travel policy has jumped to 63 percent this year from 51 percent in 1995.

The proportion has been climbing gradually since the first Barometre six years ago, but never has the increase been so marked. Altogether, 55 percent of the 417 firms surveyed now commit elements of their travel policy to paper, as opposed to only 40 percent a year ago.

At the beginning of the 1990s, companies started to apply policy more strictly. Now, about 27 percent continue in the same way. But 22 percent in 1996 versus 12 percent in 1994 have restored a certain freedom to staffs and departments. Only in large companies have practices remained rigid.

The French business travel market is projected at $23.6 billion this year, against an estimated $22.6 billion in 1995. The actual value was about $15 billion last year, but until this year, ministries, local authorities, chambers of commerce and associations were excluded.

This meant that the market expanded by about 3.5 percent for the third year running, still recovering from the low it hit in 1993.

The modest increase in value masks a bigger increase in the number of trips. The unit cost has been falling for several years as a result of airline deregulation, tougher competition among suppliers and stricter controls over company spending, the report said.

Two findings illustrate the trend: One company in three says it boosted the number of trips abroad, and the number of such trips taken by each international traveler rose by 10 percent.

For 1997, the trends are forecast to be similar to those in 1996. Companies said they will maintain their programs and hope to pay the same prices while traveling more. Budgets should rise by 4 percent, which "appears realistic, since companies do not expect a significant increase in economic activity in the next few months," the report said.

Although companies have tried to curb their travel budgets for the past three to four years, fewer say they are now trying to reduce expenses. In 1994, 60 percent of companies said they had trimmed costs by about 10 percent, whereas in 1995 only 40 percent said they had improved efficiency, and this year the amount dropped further to 38 percent. This is probably the result of travel policies and new control procedures, commented Havas chief executive Christopher Charpentier.

But that doesn't mean companies are not trying at all to cut costs. Two-thirds said they are in search of lower fares and other advantages, and more than 40 percent negotiate prices with suppliers. The proportion rises to 55 percent for companies with a payroll of more than 300. Sixty-three percent of firms said they would keep their travel arrangements intact, while 21 percent said they would tighten them up.

In addition, 48 percent, compared to 43 percent in 1995, now insist that their staff travel in economy class, wherever the destination and however long the flight.

While increasing the number of trips, one in four companies have reduced the length, and 40 percent-44 percent for large firms-have cut the number of personnel on the same trip. New forms of telecommunications, such as videoconferencing and electronic mail, are on the increase and "will certainly take a share of the travel market in the years ahead," Charpentier said.

Most French companies are not familiar with ticketless travel and regard it as enabling travelers to bypass travel policy, the survey showed. Thus, 41 percent are hostile to the idea, and only 4 percent are in favor.

For forms of transport, the train is the star of the year, thanks to the Eurostar to London, the Thalys to Belgium and other high-speed trains. One in three companies said they favor the high-speed train over the airplane for the same destination.

One-quarter of all journeys were undertaken by car, 36 percent by train and 39 percent by plane. For car journeys, 63 percent of companies insist on using company vehicles and 38 percent rentals. Only 24 percent allow personal cars because of insurance problems. As a result, "an important market is developing for car rental services," Charpentier said.

Almost all companies work with one or more travel agents, with 40 percent having made their choice through tender. In 1996, 85 percent said they were "very satisfied" or "fairly satisfied" with their agents, and 60 percent said they had no complaints at all.

Positive though the results appear, they are down from 1995, when 92 percent said they were very or fairly satisfied, and 74 percent said they had no complaints.