ACTE Sees 09 Cutbacks in Business Travel

Tighter purse strings and reduced spending in 2009 are the conclusions of a business travel spending survey conducted by the Association of Corporate Travel Executives (ACTE). ACTE Executive Director Susan Gurley said 131 respondents to an association survey are in a nearly three-way dead heat as to how their corporations will fund business travel in 2009; two of the response categories clearly indicate “less spending” and “less frequent travel.”

“Thirty-six percent said they’d be spending more on business travel next year,” said Gurley, “while 33 percent indicated they’d be spending less, and 31 percent said they’d be spending the same.” While a third of the respondents were openly spending less, those spending the same would ultimately be traveling less as the cost of travel has climbed significantly. “Even those who stated they are spending more may find they are barely keeping up with cost increases,” said Gurley.

The number one cause of the cutbacks in travel spending, according to 47 percent of the survey’s respondents, is a combination of economic uncertainty and rising fuel costs (Fifteen percent cited the economy alone as did 12 percent for fuel costs). Twenty-six percent cited other reasons such as internal changes and a restructuring of business focus.

“Equally significant is the manner in which corporate travel managers are directing the cutbacks,” said Gurley. “Thirty-one percent are cutting back on travel straight across the board. Thirty-nine percent are cutting back on internal meetings, while 16 percent are reducing international travel. Nine percent have eliminated training trips as part of their agenda.” An additional 14 percent cited “other means.”

“Many international travel markets thought the economic downturn was restricted to the United States,” said Gurley. “Yet the fuel crisis hit everyone at the same time. Furthermore, the credit crisis has leapfrogged to a number of European financial institutions. And the recent developments on Wall Street are casting a pall of uncertainty on future investment.” Gurley added that ACTE has been anticipating these developments— and preparing for them— for more than a year. “ACTE has been focusing on three techniques: value management, strategic meetings management and demand management, to discourage the deleterious decision to simply cut travel across the board,” she said.

ACTE said it will be monitoring the business travel financial picture throughout 2009. The association will re-poll the same 131 corporations that responded to the initial survey to analyze how the government’s response to Wall Street is impacting the outlook for the business travel industry.