Corporate travel spending reductions continue to broaden, according to a survey released yesterday by the National Business Travel Association. Eighty-four percent of 119 travel buyer respondents reported travel budget cuts since October 2008, and 36 percent said expenditures decreased more than 15 percent.
Although some reports show a slight rebound in March (BTNonline, April 9), buyers don't see their companies' travel spending picking up any time soon, as 60 percent said they expect their business travel budgets to decrease from 1 percent to 15 percent for the full year. Ten percent expect decreases of more than 15 percent.
The top methods reported in the survey of reducing such spending were encouraging or requiring less air travel, sending fewer employees to industry meetings and events, emphasizing advance air ticket purchases and strengthening the mandate and enforcement of travel policies.
As business travel demand dropped off considerably in the fourth quarter of last year and in the first months of 2009, some travel buyers have set out to renegotiate with their suppliers. While less than half of survey respondents said they are confident most or all of their supplier agreements will be met in 2009, 10 percent said they are likely to miss their targets on a majority.
With the economic downturn has come more scrutiny from management over travel dollars, as well as a growing number of companies now measuring travel's return on investment. According to the survey, 32 percent of respondents measure business travel return on investment and 13 percent said they plan to. Meetings return on investment is measured by 31.5 percent of buyers. An additional 15 percent said they expect to.
Respondents reported a variety of metrics used to calculate that ROI. The most common, used by one-third of respondents, is travel cost versus the percentage of overall expenses. Nineteen percent use travel cost as a percentage of sales revenues. Meanwhile, 18 percent do not measure business travel ROI.
U.S.-based travel managers comprised 85 percent of the survey. The largest group of respondents—24.3 percent—spent $10 million to $25 million on travel annually. The second largest group at 20.5 percent spent less than $5 million annually.
Source: Business Travel News