Business travel spend expected to rise in 2017

Guest Contributor

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The number of business travel buyers with flourishing budgets is on the increase for the first time in four years, according to the seventh annual Business Travel Show forecast reveal that 32 percent of buyers will have more money to spend in 2017, compared with 29 percent last year.

This follows successive annual drops since 2013. Airline budgets will also rise for 40 percent of buyers, the highest number for the last three years.

The pressure to cut costs while maintaining quality remains the biggest challenge facing buyers for the second year and may explain the significant increases in the use of low cost and budget airlines, Uber and car rental services, and mid-range and budget hotels.

AIRLINE SPEND

85 per cent of buyers will have the same or more to spend on airline travel in 2017, compared to 76 per cent last year. Budgets will increase for 40 per cent of buyers, compared to 33 per cent both in 2016 and 2015. Just 15 per cent expect budgets to shrink, compared to 24 per cent in 2016.

  • The use of low cost carriers remains unchanged for the third year running at 86 per cent.
  • In 2016, 81 per cent of buyers used low cost airlines more, compared to 26 per cent in 2015.
  • 73 per cent used more budget airlines.
  • 38 per cent of buyers booked fewer business class flights, the same as last year.
  • 10 per cent of buyers have switched carriers because of DCC (distribution cost change).
  • 17 per cent have experienced price increases as a direct result of DCC.
  • Just 11 per cent agree/strongly agree that DCC has been a good thing.

ACCOMMODATION SPEND
One third of buyers (32 per cent) will have more to spend on accommodation in 2017, and fewer (14 per cent compared to 21 per cent) will have smaller budgets. The use of budget and mid-range hotels rose sharply, with 60 per cent and 87 per cent of buyers increasing their use of suppliers in these markets. While 77 per cent of buyers still do not use Airbnb, 17 per cent did spend more money with them in 2016.

TOP ISSUES FACING BUYERS IN 2017

38 per cent of buyers expect their total travel costs to rise over the next 12 months and 48 per cent will be planning more trips, which may explain why cutting costs while maintaining quality has retained its spot as the biggest issue facing buyers in 2017. Duty of care has risen moved up the table from fourth to second, while compliance has dropped from second to sixth. Brexit makes its debut at number four, with UK buyers concerned about the impact the strength of sterling will have on prices. Traveller choice and happiness also appear for the first time, and mobile had dropped out completely.

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