NBTA Survey: Buyers Seek To Allay Expected Cost Hikes

The majority of corporate travel buyers expect to spend more on business travel next year because of increases in the number of trips as well as travel costs, according to a National Business Travel Association survey released today.

According to a survey of 189 corporate travel buyers evenly distributed across company sizes, 84 percent indicated increases would come from the hotel sector—an industry that has benefited from rising rates, greater demand and a pipeline that has slowed to a trickle. A lower percentage—75 percent—expects higher airfares in 2007.

However, ever cost-conscious buyers are seeking ways to mitigate increases. Such tactics include alternatives to commercial air travel (sought by 56 percent of respondents) —from charters to the ownership of emerging very light jets—new travel management company bids (39 percent), and a reduction in preferred supplier agreements for hotel (29 percent), airlines (21 percent) and car rental (20.7 percent). Buyers also largely agreed that throwing more teeth into policy would curb expenditures, with 75 percent of travel buyers indicating they would ramp up mandates as a means to cost savings.

Furthermore, following a distribution shakeup this year that passes through further costs to buyers, travel managers are striking back with measures they believe would curb some of the new costs. Forty-two percent said they'd push their TMC to implement direct connects and about 34 percent "plan to explore possible shared distribution savings via usage of GDS new entrants or direct connects."