Operations

Travel Managers Containing Costs While Continuing to Travel

Posted on October 22, 2008 by LCT Staff - Also by this author - About the author

ALEXANDRIA, Va. – The National Business Travel Association (NBTA) released the findings of a comprehensive study that reveal the significant impact the global crisis is having on business travel. The research shows corporate travel managers are finding creative ways to contain rising travel costs while fulfilling businesses' strategic need to travel.

NBTA surveyed corporate business travel managers from various companies to learn how they are implementing new travel management measures to cope with sizable travel cost increases. With 320 survey responses, the findings show that travel managers are implementing policy and process adjustments to manage additional fees, increased fares, and reduced budgets for travel. Highlights from the research findings include:

— More than 50% of travel managers say new airline fees are having an impact on their planning and they are encouraging less air travel and eliminating all non-essential corporate travel.

— 76% of survey respondents believe that airlines are in fact misleading the public with their "low" and "advertised" fares by adding substantial fees.

— 83% of respondents indicate that re-introduction by airlines of minimum stay requirements — such as Saturday-night-stay — will increase business travel airfares. A significant percentage of travel managers encourage travelers to consider staying over a Saturday night if the difference in airfares is greater than the hotel and meal costs.

— Travel managers are promoting travel methods like ride-sharing, using public transportation, and suggesting alternatives like Internet-based meetings for business dealings.

NBTA's research shows that there have been increases this year in the average costs of both domestic and international business trips:

— Respondents indicate domestic trips now cost $140 to $175 more than at the end of 2007.

— International business travel costs have increased $315 to $400 per trip since December of last year.

"Travel managers are coping with the unpredictability of fuel costs, weak financial markets, and the global credit crisis, and assessing the impact on their companies," said NBTA President and CEO Kevin Maguire, CCTE, GLP. "NBTA plays an integral role in helping travel managers and their employees understand how to better manage corporate travel needs. Through this research, we are providing timely insight on how the business travel industry is dealing with the challenging economic landscape."

NBTA's research, Maguire said, is a tool for travel managers to help modify corporate travel programs and policies while also shedding additional light on how factors such as ticketing restrictions and increases in travel pricing relate to corporate budgeting.

NBTA Executive Director and COO Bill Connors, CTC, added, "As we approach 2009 with a sober economic outlook, NBTA is doing its part to help business travel consumers understand the importance of streamlining travel needs and implementing clear cost-cutting techniques. Businesses that strategically manage their travel during these challenging times will be better positioned for success." NBTA conducted two surveys over a four-month period in 2008. For more information or a copy of the full report, visit http://www.nbta.org/Research/Surveys.

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

Source: National Business Travel Association

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