|Photo by Freeimages.com/Ben Ullman|
Business travel in Europe grew twice as fast as expected in 2015, according to the new 2015 EVP Barometer by American Express Global Business Travel. According to the report, which was announced at the 25th annual EVP, held in Paris, business travel spending in Europe increased by 1.42 percent in 2015, more than twice the rise anticipated in the 2014 Barometer (0.7%).
In addition, "safety and security" has overtaken "cost control" to be the number one priority of company executives when considering business travel. "Traveler satisfaction" is ranked the number three priority. When it comes to cost control and optimizing costs, this year efforts appear to be more focused on improving processes than on the direct costs themselves, American Express said. Process improvements include: online and expense management tools, and more consideration to the nature and purpose of travel before booking trips.
Key findings from the Barometer include:
Growth in Business Travel Reflecting International Expansion Plans
According to the Barometer, half of the companies surveyed aim to grow their businesses by expanding abroad over the next year, compared to 38 percent in 2014. Furthermore, the study shows that one third of respondents plan to increase their business travel budgets within the next three years, compared to 18 percent in 2014.
However, 76 percent of respondents still view business travel as a necessary cost, compared with 24 percent who see it as an investment. Further, 21 percent of the participants said they would be interested in being more informed on how they can measure the return-on-investment of their business travel.
Evolving Company Priorities
The Barometer points to the following as the top priorities for the companies surveyed:
1. Safety - This key concern has soared in importance over the past five years: while safety was the number two priority for companies in 2013, it has risen by 24 percent in two years, to become the prime concern.
96 percent of companies surveyed have implemented safety procedures (follow-up and tracking). Nonetheless, they seem to favor a curative rather than a preventive approach, American Express said, as only 24 percent of companies provide training to travelers.
2. Cost Control - After having been the leading priority for companies for a number of years, "cost control" fell back to second place in the ranking of priorities this year.
52 percent of respondents believe that they can still optimize management costs to a certain degree. However, 50 percent of the respondents cited efforts have already been undertaken to improve processes. These include: more thorough evaluation of the cost and the importance of the trip prior to booking, implementing online tools, and the use of payment and expense management tools.
This year, spending on airfares accounted for 40 percent of the average business travel expenditure, while hotel accommodation expenditure was 28 percent. However, 59 percent of respondents reported hotel accommodation expenditure will be a key consideration for them this year. This implies travel managers feel there are further opportunities to potentially drive costs down or maximize their overall hotel programs by focusing on supplier negotiation or driving the adoption of corporate negotiated rates, for example.
3. Increasing Importance of Traveler Satisfaction - The Barometer points to a considerable boost in the importance of traveller satisfaction, which leapt up to third place among companies' priorities from sixth place last year.
50 percent of respondents now measure the satisfaction of their business travelers, compared to 45 percent last year; and 22 percent use this feedback to improve their travel policies. Travel managers appear to be mindful that the adoption of tools and processes which positively affect the travel experience, such as itinerary management, incorporation of mobile technologies and new means of payment or expense reconciliation, has a direct impact on travelers' satisfaction and productivity.
Trends for 2016
According to the Barometer, the upswing in business travel spending witnessed this year is likely to continue in 2016, with respondents expecting a 1 to 3 percent rise in total travel spending over the coming year.
When asked about the aspects which will grow in importance over the coming year, the top four elements cited by respondents were: price optimization (50%), security solutions (41%), reliability of data (41%) and quality of overall travel program management (40).