U.S. organizations are spending more on travel than last year, while continuing to manage costs and support traveler needs, according to a new study released by Runzheimer International. The Runzheimer Business Travel Policies and Costs study represents data collected from more than 70 organizations across the country
The Runzheimer study cites that nearly half (49 percent) of organizations are increasing travel expenses in 2010. Of those respondents, 48 percent report an increase in the number of domestic trips as the primary reason for the rise in costs. Costs related to air travel represent 43 percent of total travel, while lodging expenses are reported at 24 percent of overall business travel expenses.
When asked what actions were being emphasized to control travel costs, the majority of respondents reported encouraging use of preferred vendors (88 percent) to control costs and improve their future negotiation power. Seventy-five percent (75 percent) encourage use of travel alternatives, such as web, telephone or video conferencing.
A drastic increase in respondents reducing attendance at conferences and conventions was seen, as 72 percent reported their use of this tactic to control travel costs versus 27 percent in the past. Another noteworthy increase was seen in the number of respondents (62 percent) currently reporting that they are strengthening expense reporting and expense auditing procedures, Runzheimer said.
The Runzheimer survey cited traveler’s satisfaction with policy as being rated ‘Excellent’ by 20 percent of respondents and an additional 61 percent rated traveler’s satisfaction as ‘Good.’ These ratings have decreased since 2008, which can be significant because traveler satisfaction with policy is often the basis for travel compliance. However, compliance overall is rated at 84 percent when looking at ‘Excellent’ and ‘Good’ ratings (2 percent higher than in 2008) and indicates travel program management has kept compliance high despite the drop in traveler satisfaction.
"Travel is a significant force in business growth and these indicators are essential to monitor,” said Greg Harper, president of Runzheimer International. "Organizations that support business traveler needs, while appropriately using data and policy to manage costs, have an edge in the new economy. The data we offer through our proprietary Travel Management Network includes a wealth of business travel-related information that companies can use to drive business and operational success.”
Other key Runzheimer findings:
* When business travel is required, more organizations are developing cost guidelines for hotels and meals in major destinations (up from only 6 percent in 2008 to 30 percent) to help control trip costs. The average domestic trip cost is now $983, an increase of 5 percent from 2008. The average direct spend per traveler per year is $10,475, up from $9,751 in 2009 but still lower than the 2008 annual direct spend per traveler of $10,740.
* Business trips have decreased in duration, as a two-day trip is the current average length reported by 46 percent of respondents. A three-day business trip follows closely behind at 40 percent.
* Forty-two percent of respondents report that their frequent travelers are on business trips between 31 and 75 days annually, which is up from 29 percent in 2008.
* Vendor negotiation and use of approved agencies continues to be important. Of respondents that mandate specific vendor use 72 percent mandate use of their designated travel agency/in-house travel office and 80 percent require use of corporate-approved car rental firms.
• Thirty-three percent of respondent organizations refuse to reimburse out-of-policy expenses in an effort to enforce travel policy.
Seventy-one organizations from various business classifications, company sizes, and geographic regions participated in the study – a majority from the U.S. Visit www.runzheimer.com.