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How U.S. Businesses Are Cutting Travel Costs

How U.S. Businesses Are Cutting Travel Costs, September 2012U.S. business travel will grow by almost 4 percent annually through 2016, according to The Global Business Travel Association (GBTA) Foundation’s 4th annual business travel report, entitled “GBTA BTI™ Outlook — Annual Global Report and Forecast, Prospects for Global Business Travel 2012-2016.”

But with travel costs almost back to pre-recession prices, companies are focusing on cutting costs and controlling spending. The way in which companies are cutting travel costs was addressed in another GBTA Foundation study — the Global Business Traveler Study 2012.

The study sponsored by Concur, a leading provider of integrated travel and expense management services, surveyed 1788 business travelers in the U.S., Canada, Australia and India. The results of the survey published in May showed:

  • More than one third of business travelers surveyed said that fewer colleagues are allowed to travel to meetings than a year ago.

  • About a quarter of those surveyed said more of their business trips have spending limits than a year ago.

  • More than 40 percent surveyed said their business-travel expenses are scrutinized more closely.

  • About one fifth surveyed operate under mandated travel programs, which require them to use company-approved airlines, hotels and car rental companies.

  • Roughly one third work for a company that has no preferred travel vendors, while almost half fall in between — their employer encourages them to use specific airlines, hotels and car rental companies, but do not require it.

  • Companies are also reducing travel costs with the use of videoconferencing equipment, reserving rooms at less expensive hotels and reducing the number of employees sent to meetings.

  • To keep a closer eye on spending, some companies have created individual profiles in their online booking systems.

  • Many companies negotiate discounted rates for airline tickets, hotel rooms and rental cars through a corporate travel agency or directly with travel companies by promising them a certain amount of business.

Aviation Industry Take Note

According to Michael W. McCormick, GBTA executive director and COO, the purpose of the Global Business Traveler Study 2012 is to understand the individual needs of business travelers to help companies keep travelers productive and motivated.  The GBTA hopes that the study will be used by the travel industry and guide marketing strategies and new product development to meet the needs of road warriors.

Aviation companies, including FBOs, pilots and aircraft manufacturers should take note, and consider adapting their marketing tactics to appeal to the new way that corporations are handling their business travel. For example, becoming a preferred travel vendor on corporate lists.

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