Economic Concerns Weigh On Travel Spending


Aggregated data in the eMarketer eStat Database indicates that even as the economy moves towards recovery, corporations remain cautious on the travel-spending front. A survey of more than 200 US corporate travel managers conducted in mid-2003 by the National Business Travel Association found widespread declines in travel spending compared to the same period in 2002. On the positive side, nearly one-third of the survey respondents indicated that their companies had increased travel spend, and 40% stated they expect to be taking more hotel rooms in 2003 than in 2002. On the other hand, close to 30% of the surveyed travel managers expected hotel room usage to remain flat. Not surprisingly, economic concerns remain the major sticking point, with 74% of respondents citing the need for improvements in their companies' balance sheets before business travel can rebound. A study carried out by Runzheimer International and the Association of Corporate Travel Executives reached a similar conclusion, pointing to "corporate belt-tightening to improve profitability" as the principal reason behind restrictions in travel spending. In spite of these restrictions, however, companies are not standing still. Rather, many are taking measures to wring the most value out of their corporate travel budgets, including requiring senior-level executives to fly coach, booking flights on discount airlines and booking more employees into mid-priced hotel brands.

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