Study Stresses Travel's Link to Economic Recovery

ALEXANDRIA, Va. --- Business travel spending is down compared to last year, but there's room for optimism, according to a study by the National Business Travel Association (NBTA).

As security concerns decrease, corporations' financial well-being remains the major factor determining how soon business travel will rebound to healthy levels, the study concluded. In the meantime, travel managers are implementing policies to control travel spending.

In a survey of 204 travel managers conducted June 19-26, about 58% reported some decrease in travel spending compared to the same time last year. However, about 31% of respondents indicated that their travel spending has increased.

In addition, 40% of surveyed travel managers reported that they expect to use more hotel rooms for 2003 than 2002, while almost 30% said their hotel room use will remain flat compared to last year.

"Over the last couple of years, the business travel industry has been hit by major economic, political and health crises," said NBTA President and CEO Kevin Iwamoto. "But travel is an essential part of doing business, and we will start to see a return to healthy spending as companies gradually return to normal commerce and business activity."

On a positive note, security concerns and inconveniences seem to be decreasing. The majority of travel managers (61%) said they have not been hearing complaints from their travelers regarding security inconveniences or inconsistencies.

In 2002, for example, 45% of respondents pointed to improving security as the second most important factor in turning around travel levels. This year, security ranks second-to-last, with a mere 8.6%. Economic concerns remain the major factor hindering the turnaround, as 74% of respondents believe that the healthy financial well-being of their company is essential for the rebound of business travel.

"Security hassles are less of a concern as security measures improve and business travelers become more familiar with the procedures," said Iwamoto. "As this and past NBTA surveys have shown, economic conditions must improve before business travel will return to normal levels."

In response to the current economic environment, travel managers have implemented new policies to save on travel spending. About 44% of responding corporations are requiring senior-level executives to fly coach class. Roughly 60% have been using alternative airports in order to save on airfare, while 73% have been booking flights on discount airlines -- the largest percentage since NBTA first reported this trend in 2000. In addition, 78% report using more mid-priced hotel brands instead of luxury properties.

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