Survey: Travel Managers Expect More Spending In 2005

Corporate spending on airfares this year is expected to stay above 2003 levels by roughly 4 percent, and a majority of travel managers anticipate similar or higher levels of spending next year, according to a survey of 112 corporations released today by the Business Travel Coalition.

Nearly half of the respondents said dollars spent should remain flat, and only 6 percent said travel spending will be lower in 2005. Meanwhile, 45 percent of surveyed travel managers expect an average 14 percent increase in travel spend next year, while those companies scaling back anticipate spending only 6 percent less on airfares.

With 94 percent of respondents agreeing that cutbacks in business travel are permanent, the survey underscores the ongoing cost consciousness among travel buyers as the use of low-cost carriers, nonrefundable tickets and air travel alternatives-such as remote conferencing-continues to spike. Meanwhile, BTC chairman Kevin Mitchell projected fares next year to remain flat or decrease by up to 3 percent.

"What's permanent is not the cutback in travel activities per se," Mitchell said. "What's permanent is the catharsis that these companies went through in 2001 and 2002 due to new policies, new programs and new corporate edicts. Today, compared to 12 years ago during the last airline industry downturn, there's an unprecedented range of alternatives."

Seventy percent of respondents said they will boost the use of low-fare carriers next year, matching similar numbers from last year. Meanwhile, nonrefundable tickets have grown to comprise 69 percent of tickets issued, a 10 percentage-point jump from last year. Likewise, cheaper modes of booking travel also are growing, as 34 percent of ticket requests through June 2004 were processed via an online booking tool, up 6 percent from last year.