63% of European companies maintained travel budgets in 2012 says American Express
- Category: Agency & Association
- Created on Thursday, 06 December 2012 15:53
Majority of business travel budgets to stay the same in year aheadAccording to the American Express Global Business Travel 2012 EVP Barometer (“the Barometer”), the majority of companies (63%) in Europe maintained their business travel budgets in the last year and 73% will allocate the same budget for business travel in 2013.
Almost one quarter (23%) of companies said they increased business travel spending this year and just 14% of companies cut business travel budgets – compared to a decrease of 21% in 2011, 40% in 2010 and 66% in 2009.
“Companies across Europe recognise that business travel is an important investment that adds value and drives business growth,” said Anthony Drury, Vice President and General Manager, American Express Global Business Travel, UK and Nordics. “Our Barometer helps companies understand how to maximise their business travel spend by providing an overview of trends and best practices in Europe.”
Increased control but opportunity to improve ROI measurement
The Barometer – a survey conducted among more than 500 companies across Europe –shows that the practice of implementing a travel policy is now widespread in companies across the region, with more than 90% of large companies citing that they have a policy in place.
This practice is also being adopted in smaller businesses, with 74% of small businesses and 50% of micro businesses citing they have a policy in place. Centralised budget control continues to be a focus, with 6 in ten companies saying that travel budgets are controlled by a centralised executive such as a CFO or CPO.
However, when it comes to reporting, only 30% of companies measure the return on investment of travel spending, making it hard to analyse the bottom line benefits that travel expenditure can offer.
TMC essential for maximising ROI
As companies maintain a focus on cost control and seek ways to better capture ROI, they are increasingly turning to their travel management company (TMC) for support with reporting, with 59% saying that they use a TMC as their main source of reporting.
“Partnering with a TMC can provide great value to a company – from a reporting perspective and beyond. At American Express Global Business Travel, we form strategic partnerships with our clients to deliver the solutions they need to be successful, productive and effective. This includes providing insight and knowledge to help demonstrate the return on business travel investment,” said Mr Drury. “Beyond reporting benefits, our technology, tools and partnerships provide travellers with a connected travel experience, improving control and compliance and helping them to return home safely.”
Focus on hotels
Hotels is a new concern for procurement teams and 54% of companies are monitoring spend within this category. As a result, 88% of companies include this as the first item on their travel policy, following categories such as air, meetings and events, rail and car rental.
Evolution of business travel practices
In the current economic environment, companies are opting for strategies to maximise their travel budgets.
Examples mentioned by survey participants include:
- Advanced ticket purchases
- Booking best available fares
- Utilisation of online tools
- Use of preferred suppliers
- Use of rail rather than air travel
- Renegotiation of supplier agreements
- Greater enforcement of travel policies
- Development of virtual meetings
- Use of low-cost options
- Increase in centralised payment methods
Mobility and traveller security
According to the findings of the Barometer, mobile technology has now become a booking channel in its own right. Mobile tools can provide travellers with greater flexibility, and offer new services such as travel alerts (according to 67% of travel managers surveyed), mobile check in (60%), security alerts (58%) and notifications of reservation changes (56%). Traveller security is increasingly important, with companies citing it as one of the top items for inclusion in a travel policy.
2013 priorities: control and optimisation
Looking to the year ahead, the majority (72%) of European companies said they will maintain the same business travel budget and 16% will increase their travel budget – largely due to an increase in European travel (49%) and international travel (52%). Their priorities will include:
- Cost control (80%)
- Optimisation of travel expenses to (49%)
- Traveller Safety (45%)
- Having an overview of travel expenses (41%)
- Enforcement of travel policy (38%)
- Increased traveller satisfaction (30%)
- Development of the travel team’s contribution to the overall success of the company (23%)
The 10 most purchased services by survey respondents for 2013 also meet five of the above priorities:
- 24/7 support
- Online booking solutions
- Rerouting travelers
- Air fare sourcing
- Hotel room sourcing
- Improved buying strategy
- Creation and review of travel policies
- Integration of travel policies into IT systems
- Workflow audits and recommendations