What Travel Managers Are Doing to Handle Recessionary Times

Posted on October 20, 2008 by LCT Magazine

As the business community navigates a global credit crisis, uncertainty in major financial markets, and record spikes in fuel costs, many companies have implemented cost-saving initiatives at all levels. While cost containment has for many years been a major focus of travel managers, the recent developments have both highlighted the importance of effective travel management and prompted adjustments in some corporate travel programs.

To help the business travel industry understand those changes, the National Business Travel Association (NBTA) – the industry’s leading association – conducted two surveys of U.S.-based travel buyers in the middle part of 2008. The first survey ran July through September and garnered responses from more than 230 companies. The second survey ran mid-September through October 10, 2008 and garnered responses from more than 90 companies. The findings are presented below as a benefit to NBTA members.

Survey respondents noted sizable increases in business travel costs. A domestic business trip costs $140-175 more than last year, while international trips are ranging from $315 to $400 more per trip. In response to these increases, travel managers are implementing new cost-containment measures or ramping-up existing initiatives:

Top five things corporate travel managers are doing to contain air travel costs
1. Emphasizing advance purchase of air tickets
2. Encouraging or requiring less air travel
3. Sending fewer employees to conferences
4. Strengthening mandates/enforcement of travel policies
5. Driving people to travel alternatives (e.g. web-based meetings)

Top five things corporate travel managers are doing to contain ground transportation costs
1. Refueling before returning car rental
2. Sharing ground transportation costs with other employees
3. Moving to smaller, less expensive car rentals
4. Renting more fuel efficient cars (non-hybrids)
5. Using more public transportation when traveling

Additional travel cost-containment measures companies are implementing in today’s challenging
• Moving to more coach-class air travel. Measures may include:
     o Eliminating premium-class on domestic trips
     o Tightening restrictions for premium-class on international trips (for example, increasing the minimum length of a flight for premium-class)
     o Offering cash incentives to those who choose economy over business or first
• Increasing use of online booking tools
• Bidding contracts/reducing #s of preferred suppliers
• Moving to lower-priced hotels
• More day trips (no hotel stay)
• Encouraging travelers to combine multiple trips into one
• Negotiating new airline deals for key city-pairs, sometimes with flat rates (instead of, or in addition to, more traditional network-wide deals with discounts)
• Negotiating rental car fuel surcharges, refueling costs, and other additional fees
• Examining relative costs of various modes of ground transportation, and adjusting policy accordingly (e.g., Is it cheaper for shorter trips to pay for airport parking than roundtrip cab or black car to/from the airport? Is it cheaper for some trips to use cabs locally in destination rather than renting a car? Does hotel offer airport shuttle? Is viable public transportation available?)
• Offering incentives for employees who take travel savings (e.g., cash incentive for taking coach when travel policy allows for business class)
• Implementing strategic meetings management programs (enterprise-wide meeting policies and practices)

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