Cost control remains priority for corporates – study
Business travel is on the rise again, but with a growing emphasis on cost control and efficiency, according to Egencia’s latest Corporate Travel Global Benchmarking Study.
The global survey of more than 300 travel buyers found that 43% of buyers expect their travel volumes (number of trips) to increase during the remainder of 2012, while 46% expect their overall travel spend to increase. The focus on cost control is apparent however, with 62% of travel buyers saying they will negotiate more in 2012, compared to 38% in 2011.
Travel managers identified cost control and reducing expenses (77%) as the greatest challenge facing their travel programmes, followed by traveller compliance and policy enforcement (40%).
Egencia noted however, that even as companies try to control travel spending, they are also mindful of traveller satisfaction. The study found that 45% of business travellers are permitted to travel in front of cabin seats on flights longer than nine hours, compared to just 6% on flights of less than nine hours.
“Allowing for business/first class travel may be emblematic of companies wanting to be seen as supporting their employees, not just cutting costs,” Egencia commented.
The focus on cost control is being driven not only by the gloomy economic outlook but also rising travel costs. Average airfares on intra-Asian routes climbed 3% in Q1 2012, compared to the same period a year ago, while hotel rates surged 6%, led by double-digit growth in cities such as Jakarta (+23.6%), Seoul (+15.4%) and Hong Kong (+12.4%).
Europe saw a 6% rise in airfares and a 3% increase in hotel rates, while in North America airfares and hotel rates both climbed 6%.
“We can see two trends: on the one hand, companies keep slowly investing in business travel. On the other hand, air and hotel pricing environment is increasing. But opportunities for savings can still be found and the TMC has an important role to play,” said Germain Huber, Vice President of Supplier Relations & Consulting for Egencia EMEA.