Industry Research

Corporate Travel Buyers Project More Trips, Spending In 2011

LCT Staff
Posted on October 6, 2010

The National Business Travel Association’s Annual Sentiment Report examines travel manager expectations for business travel spending.

WASHINGTON, D.C. — A year after the Great Recession officially ended, corporate travel buyers have confirmed the economy and business travel are in recovery. In its 2010 Industry Pulse: Business Travel Buyers’ Sentiment, the NBTA Foundation, the education and research arm of the NATIONAL BUSINESS TRAVEL ASSOCIATION (NBTA), found that 72% of corporate travel managers surveyed feel the business travel industry is better today compared to one year ago, and 63% believe it will continue to improve during the next 12 months.

Craig Banikowski, President and CEO of the NBTA, said, “Business travel is coming back; there is no doubt about it. Given the difficulties the industry faced during this last recession, corporate travel buyers welcome the improved conditions, and companies are already getting their teams back on the road to help build business. Of course, with economic recovery comes higher costs and budget challenges, and to prepare accordingly, travel managers must have a comprehensive overview of what’s to come.”

The annual report, which surveyed 170 North American corporate travel buyers this month, found that the average corporate travel budget was up 5.5% in 2010 compared to last year, and will expand by another 4.45% in 2011 to $98 million. While buyers reported more travelers (38%) are taking more trips (51%) this year, higher rates and fares (67%) and an increase in airline fees (64%) are the most often cited contributors to increased spending.

With the exception of domestic car rentals, travel buyers expect domestic prices to rise between 3% and 4.5% in 2011.

Increasing outbound international business travel and higher costs are also large driving forces behind the increase in total travel spend. The international share of U.S. business travel spend in 2009 was 28%, and buyers expect this share to continue to increase. Outbound international spend per company is estimated to increase by 13% in 2010 to $28.2 million. Travel buyers expect their international business travel spend to further increase by 11.4% to $31.42 million in 2011.

Banikowski added, “As the economy continues to improve and both domestic and international costs rise, we will see airlines and hotels wield more negotiation power. Many travel buyers are already experiencing more strict market thresholds and expect this to result in smaller corporate discounts going forward.

Now is the time for buyers to work closely with suppliers to strike a fair balance in services, while also keeping in mind that the ‘buyers market’ we’ve been able to take advantage of over the past few years may slowly be turning around. To face these challenges going forward, travel managers should consider tightening policies, implement Strategic Meetings Management Programs, and continue to monitor volume and market share thresholds to ensure proper leverage in negotiations.”

The 2010 Industry Pulse: Business Travel Buyer’s Sentiment is free of charge to all NBTA Members ( Non-members may purchase the reports through the NBTA Foundation at [email protected]

The report is one of two new industry outlook business tools NBTA announced earlier this week. The other is the first-ever quarterly business travel outlook offering a macro-economic analysis of business travel spending over the next two years. The Business Travel Quarterly Outlook — United States will be published in the coming weeks.


LCT Staff LCT Staff
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