Travel Managers Foresee Increased 2005 Spend

A majority of travel managers expect their travel spend in 2005 to increase, according to a survey conducted this month by Citigroup Smith Barney. Of the 200 travel managers polled, 57.1 percent said 2005 travel spend would exceed 2004 levels.

"Expected 2005 increases average approximately 5 percent," said Michael Rietbrock, the firm's lodging industry analyst. This would be more than twice the projected rate of increase in the consumer price index, which is expected to rise 2.1 percent in 2004. "Furthermore, 48 percent of travel managers cited their current 2004 spending outlook as improving, compared to only 10 percent who described it as deteriorating," he said.

Travel managers' outlook has grown more positive since the firm conducted a similar survey in January. "At that time, about 12 percent of respondents indicated that their 2004 spending outlook was deteriorating," Rietbrock said.

Regarding hotel rates, 52 percent of survey respondents said that hotels were becoming tougher on pricing and terms in anticipation of the bid season for 2005 negotiations this fall.