PhoCusWright Survey: 30 Percent Of Business Travelers Managed

Seventy percent of surveyed U.S. business travelers work for companies that had no policies on booking channels or supplier usage, according to PhoCusWright research.

The firm surveyed 2,053 people who in the 12 months prior to September 2011 took at least one business trip including a flight and/or paid lodging. Based on data from the U.S. Census Bureau and Pew Research, PhoCusWright estimated that 30.7 million Americans, roughly 13 percent of the adult population, took at least one business trip in that timeframe.

PhoCusWright and Business Travel News share a parent company, Northstar Travel Media.

Thirty percent of business travelers surveyed in an online poll fielded Sept. 2-10, 2011, work for companies had policies on travel brand usage and booking channels, criteria the report used to define managed travel. Managed travel programs were found most often (67 percent) at companies with 5,000 or more employees. Researchers noted that managed travel programs are less common at smaller companies, including those that employed 500 to 4,999 people (41 percent), those with 50 to 499 employees (33 percent) and those with fewer than 50 (12 percent). Slightly more than half (52 percent) of survey respondents said they worked at companies with fewer than 500 full-time employees. The remaining 48 percent said they worked for companies with at least 500 workers, including 17 percent who said their companies employed more than 10,000 people.

Nine percent of surveyed executive leaders said their companies had managed travel programs versus 24 percent who identified themselves as upper management, 40 percent of managers and directors and 52 percent of associates and specialists.

Travelers Question Value 

About three-quarters of surveyed travelers in managed programs said their companies' travel policies were easy to adhere to, while 61 percent said they understood the benefits and 57 percent agreed that travel brands used in the managed program are the same they would use for personal travel. However, less than half, 46 percent, of surveyed managed travelers agreed that their companies' travel policies or agencies could "offer them equal or better pricing on travel components in comparison to" what they could find on their own.

"Considering the important role of price in rogue behavior, addressing this perception is important for travel managers who aim to improve compliance," according to study authors Marcello Gasdia and Carroll Rheem.

Nearly 60 percent of the 773 respondents within managed travel programs said they always complied with booking channel policies at their companies, but only 45 percent said they always complied with hotel policies.

While the total number of managed travel respondents produced a ratio of 38 percent to 62 percent unmanaged, PhoCusWright established a quota to ensure sufficient data from managed travelers "because the natural incidence of managed travel is low relative to the unmanaged group. The study results are weighted to reflect the ratio that would have occurred had the quota not been implemented."

About half of managed travelers surveyed said they were encouraged or strongly encouraged to use specific air, car rental or hotel suppliers. Penalties for noncompliance were cited by 10 percent of respondents for airline selection, 12 percent for hotels and 13 percent for car rentals. Nearly one-third of managed business travelers surveyed said they could book any air, hotel or rental car supplier they wanted for business travel.

"Booking channels are more tightly managed than travel brands," according to the study. Thirty-one percent of respondents said there were required to use a specific channel and faced penalties for noncompliance, while 27 percent said they were encouraged or "strongly encouraged" to use specified travel agency or website channels, and 20 percent were encouraged or "strongly encouraged" to book directly with suppliers. About 22 percent said they could use any booking channel they wanted.

Of survey respondents who said they didn't always comply with their company's managed travel policies, 47 percent cited convenience as the "reason for going rogue." But "rogue travelers often aim to be fiscally conscientious for their company (and their own travel budgets)," according to the study. "Three in 10 noncompliant travelers break with policy" to book the best price.

As for travel shopping channels, 61 percent of managed travelers said they use websites via a computer to book, but 85 percent of unmanaged travelers rely on this mode. Fourteen percent of managed travelers said they called travel agents while 17 percent said they phoned travel providers. Shopping with mobile devices was cited by 17 percent of managed travelers and 24 percent of unmanaged travelers.

On average, one in five business trips taken in the past year by respondents relied on ground transportation instead of air travel. About 45 percent of business trips typically included a car rental and 3 percent involved rail travel of more than 75 miles.

Infrequent Travelers 

Nearly half of all respondents surveyed took fewer than three trips a year, and 28 percent of all respondents took a single trip. A quarter said they made six or more business trips in the prior 12 months.

Not surprisingly, such professional services as consulting spurred 22 percent of trips while sales and client relations were responsible for 20 percent, according to the survey. Conferences and trade shows generated 16 percent of all business trips, followed by training (12 percent), meetings for strategic reviews or planning (11 percent), internal conferences (8 percent), reviews or evaluations of a location (4 percent) and incentive rewards programs (1 percent). Five percent of respondents noted other reasons for business trips.

Web-based presentations and videoconferencing have had some degree of impact on business travel, according to 70 percent of all 2,053 surveyed, but only 15 percent described the impact as "substantial" or "dramatic." More than half of all business travel respondents characterized the impact as "somewhat" or "very little," and 30 percent said "not at all." Web-based technologies that replaced business travel did so most often for training sessions, internal conferences and strategic reviews, planning or collaboration, according to respondents.

Booking Travel Easy, Expense Not So Much 

Nearly half of managed travelers surveyed said they must submit pre-trip travel requests. More than half (54 percent) of managed travelers and 47 percent of unmanaged travelers said they had fixed individual budgets for business travel. Expense management tools were more than twice as common at companies with managed programs (63 percent of respondents) than those with unmanaged travelers. The use of corporate credit cards was cited by 58 percent of managed travelers and 49 percent of unmanaged.

While booking travel was described as somewhat or very easy by 74 percent of managed travelers, 23 percent said they were frustrated by the expense reimbursement submission process.

The study found that managed travelers on average annually spent $5,349 on business travel including airfares, hotel stays and car rental expenditures, but excluding meals and incidentals. Unmanaged travelers cited annual average expenditures of $5,725. Among all respondents, those 45 to 54 years old had the highest annual average spending at $6,733, while the 18-to-24 age range had the lowest at $3,299. Males on average annually spent $6,958 on business travel versus $3,850 by females. Annual business travel spend for executive leadership types averaged $8,131 versus $7,675 for upper management, $6,098 for managers and directors and $3,140 for associates and specialists.