Published on Monday, October 20, 2008
The global economic crisis has forced more than a quarter of companies to introduce urgent cuts in business travel, a survey out today reveals.
More than 34% indicated that they have frozen all corporate travel altogether while almost 19% indicated that a percentage reduction had been put in place.
The poll of almost 200 corporate travel managers from 17 countries including the UK and US found that the cuts being imposed are deeper than in the last financial downturn of 2000.
Of those companies that have imposed emergency travel cutbacks, almost 69% plan to keep them in place until further notice, the study by the Business Travel Coalition discovered.
Half of respondents said their companies were planning to invest in alternatives to air travel such as video conferencing.
More than half (54%) said they will be required by their bosses to track cost avoidance savings used to justify an investment in technological substitutes to flying for meetings.
The report added that the prospects for low cost airlines such as easyJet in Europe and AirTran Airways and Frontier in the US should be buoyed as traditional carriers cut capacity and more firms insist their staff take budget flights.
Action being taken by companies includes imposing stricter travel policies such as insisting executives use a lower class of air travel and cheaper hotels.
Other measures include:
*Trying to do day trips rather than making overnight stays;
*Looking at train travel rather than by air;
*Trying not to travel if a web or conference alternative is available;
*One person travels when two would usually;
*Imposing an automating travel policy enforcement tool;
*Trips have to be approved by more than one superior;
*All long haul flights to be approved at director level and all non-essential travel cancelled;
*Reviewing the reason for trips and analyse costs in advance.
â€œThere is an eerie similarity in the current economic environment compared with the last cyclical downturn in the fall [autumn] of 2000; however, the order of magnitude increase in the seriousness of the current situation and in corporate responses vis-Ã -vis travel policy changes this time round,â€ the report said.
â€œSome 68% of survey respondents in 2008 indicated that their corporations would keep emergency travel cutbacks in place until â€˜further noticeâ€™ underscoring the great uncertainty about the global economy.
â€œMoreover, many corporations are still monitoring the situation and have yet to make travel policy decisions.â€
by Phil Davies
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The recent insolvency of Low Cost Travel Group, one of the large players in the travel industry had a big impact on the travelers, hotels and all related players from both wholesale & retail arms. There were about 27,000 people on a holiday who had booked through the company comprised of a €200 million wholesale arm and €500 million OTA / retail arm.