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CFOs Say Firms Will Spend On Business Travel

May 15, 2012 By: Newswire Travel Agent

Senior finance executives worldwide are expressing moderate optimism about the prospects for economic growth over the next twelve months, according to the fifth annual American Express/CFO Research Global Business & Spending Monitor, and are holding the line on travel spending. 

A majority of respondents (58 percent) will spend the same or more on business travel over the next twelve months. However, that’s down from 2011, when 64 percent of respondents planned to spend the same or more over the same period of time, AmEx says.

To make the most of their travel budgets, companies will focus their resources on travel that is closely connected with revenue expansion. Almost nine in ten (88 percent) will spend the same or more on travel to meet with current or prospective customers — with 38 percent likely to spend more.

“Finance executives are looking for ways to stimulate growth, in part by deploying some of the cash that has built up on corporate balance sheets in recent years,” said Janey Whiteside, senior vice president, global corporate payments, American Express.

“Frequently, business travel is a key factor that enables companies to win on a national and global scale,” Whiteside said. “Our research suggests that when companies see a positive return on investment from travel, they will continue to spend on it.”

The survey of 541 senior finance managers reports that investments in expanded operating capacity, research and development, and mergers and acquisitions are on the table as finance executives dip into their companies’ cash stockpiles.

Hiring is also on the rise, with a majority of finance executives planning to increase headcount over the next twelve months, the study notes.

“Finance executives also report they’ll be keeping a sharp eye on the bottom line, while spending selectively on activities that will drive revenue like sales and marketing and new product development,” Whiteside said.

Finance executives continue to be optimistic about the economy. This year, 64 percent report expectations for modest to substantial expansion over the next twelve months, but that’s lower than in 2011 and 2010 (when 75 percent and 71 percent of all respondents anticipated economic expansion, respectively).

Worldwide, the outlook for economic expansion among the countries covered by this study was brightest in India (86 percent), followed by the U.S. (78 percent), Germany (74 percent), Mexico (73 percent), Argentina (70 percent), Australia (69 percent) and Canada (67 percent).

In terms of when the global economy will gain greater strength, nearly half of the world’s finance executives (46 percent) believe that “robust” economic growth will return in their countries by the end of 2012, AmEx says.

Countries where finance executives are most bullish include Hong Kong, where 83 percent of respondents expect their local economy to return to robust growth by the fourth quarter of 2012, followed by Mexico (77 percent), and Germany (66 percent).

Respondents in the U.S. and the U.K. report a more extended growth horizon. Three-quarters of U.S. finance executives (75 percent) and 58 percent of U.K. finance executives see robust growth returning at some point after the close of 2012.  

Companies are likely to take a conservative approach to spending and investment over the coming year, AmEx says. Nearly half of all respondents (49 percent) report that “modest spending and investment to support top-line growth while improving profitability” will characterize their approach to spending and investment. In contrast, only 14 percent of respondents say they plan to “spend and invest aggressively to boost top-line revenue.”


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By Newswire | May 15, 2012
Companies will spend the same or more on business travel over the next twelve months.
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