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NBTA Reports Travel Spending Decreases to ContinueApril 20, 2009 By: George Dooley
In a March 2009 survey of 119 corporate travel managers, the National Business Travel Association (NBTA) found that nearly 85 percent of respondent companies have decreased travel spending since October 2008, and more than 70 percent expected continued decreases through 2009. In response to cut backs, 53 percent of respondents report that new travel management initiatives have saved companies more than $50,000 since October 2009. The NBTA’s new survey highlights the most recent impacts of the economic crisis on global business travel.
Kevin Maguire, NBTA president and CEO, said, “In a time when corporations are suffering because of a down economy, traveling smarter becomes a top priority. This report shows that, during a recession, an efficient travel management program is key to saving money while still keeping travelers on the road to help bolster revenue. Corporate travel managers are coming to the rescue when corporate cost heroes are needed most.”
According to the NBTA report, the top five travel management initiatives to cut costs are:
1. Overall travel and entertainment budget cuts
2. Encouraging or requiring less air travel
3. Sending fewer employees to conventions/conferences/trade shows
4. Emphasizing advance purchase of air tickets
5. Strengthening travel policy mandates, enforcement of travel policies
The NBTA report reveals a confidence in travel management, as 63 percent of respondents feel secure in their current positions. While half of those respondents believe their companies’ value their positions more than ever in a cost cutting economy, nearly 20 percent have reported reduced travel staff in recent months.
Maguire commented, “The current value placed on travel managers is not surprising given the effective policy changes and savings companies are seeing. It is those companies that do eliminate and reduce travel staff that will risk losing more money in the long run.”
Survey respondents also indicated that both the economy and recent negative perception of corporate meetings and events have been major factors in reduced spending for meetings, conferences, incentives and client events despite the fact that 85 percent report offsite strategy meetings and leadership conferences as an important part of their companies’ business planning and talent-development process.
Maguire added, “The combination of cost-cutting measures due to the economy and perception-driven reductions is devastating the corporate travel and meetings industry. NBTA and other travel industry leaders have been fighting this negative perception of meetings for the very reason survey respondents indicate – meetings and conferences are vital to a company’s strategic planning process and revenue stream. These results only further justify spend on corporate events to not only boost profits, but also to boost the economy.”