Survey Forecasts Corporate Travel to Remain Flat

ATLANTA -- Although the economy is slowly rebounding, it appears that U.S. corporations remain cautious with their 2004 travel budgets. WorldTravel BTI's annual client survey conducted in August 2003 shows 62% of 127 respondents plan no significant travel budget changes for 2004. The remaining 38% plan changes of only -10% to +10%.

Survey results indicate that in 2004, the car rental sector will remain moderately flat with a 1% to 2% increase in rates.

"Travelers have been driving the four- to five- hour destinations over the past two years as an alternative to flying," noted Danny Hood, president of WorldTravel BTI. "They were accurate in stating that the total time was the same when the commute to the airport, the security time and the airport downtime was factored in. However, the frequent traveler express lines, the TSA learning curve and the short haul deals have decreased the driving time decision by at least an hour. Other than Monday morning for 8-9 a.m. flights, the security lines have improved dramatically."

In 2003, the top travel alternatives for those companies indicating a decrease in travel budget are telephone and video conferencing, foregoing the trip, Web meetings and driving.

In 2003, almost half of the respondents (42%) adjusted their company travel policies. Security procedure changes led the policy changes, followed by the emphasis on travel options, enforcement of preferred vendors and implementing a pre-trip approval process.

In 2004, two out of three respondents (68%) expect no change to their company travel program. The remaining third plan significant changes, the most popular of which include mandated and increased use of online booking tools, required use of preferred vendors and implementing online expense management tools.

Increasing employee adoption of corporate online reservation tools is a goal for almost half of the respondents (48%). Companies with annual air volume between $5.1 million and $10 million had an adoption rate of 45% for 2003.

Companies with annual air volume between $10.1 million and $20 million had an adoption rate of 43% for 2003, with 2004 adoption goals targeted at 62%. Companies with annual air volume below $5 million had a 43% adoption rate, with 2004 goals targeted at 56%.

Nearly three out of four respondents (70%) reported no change to the company's air carrier negotiation strategy for 2003. However, nearly a third of the respondents (30%) cited some changes, including evaluating low-cost carriers as preferred vendors, seeking a joint contract within new alliances, mandating preferred carriers, implementing an airline performance tool and consolidating suppliers.

WorldTravel is seeing a slight shift in the use of low-cost carriers in their clients' corporate travel program. While the majority of respondents still support the major network carriers, 30% report the use of low-cost carriers as preferred suppliers. The top four low-cost carriers are (in order of respondent ranking) Southwest Airlines, JetBlue, America West and AirTran.

Managing the preferred vendor program within the company continues to be a challenge in today's environment of Web-based offerings to business travelers. Half of the respondents indicated that driving traveler behavior is a concern in their program. Actions taken to encourage travelers to participate in the company's preferred supplier program are pre-trip approval, non-reimbursement of expenses, and mandated use of the corporate travel agency.

The corporate travel industry dealt with numerous incidents in 2003 that strongly affected the industry: the war in Iraq, SARs outbreak, terrorist threats and a weak economy. WorldTravel said it believes that the corporate travel industry will see an upswing in 2004.

An increasingly stable economy indicates an increase in consumer spending, WorldTravel reported. Corporations will want their "road warriors" on the move to leverage the upswing. Face-to-face meetings will reclaim their status as the preferred way of doing business.

"Economic forecasts are showing that the economy will improve in 2004 and with this positive news companies will be eager to get back on the road," Hood said. "While we will see an increase in passenger traffic, companies will be smart and cautious about their travel spending."

WorldTravel forecasts that global passenger traffic will increase by 4% with domestic traffic increasing by 5% and United States international passenger traffic increasing by 9%. Barring the advent of another health or diplomatic crisis in 2004, WorldTravel said it believes the origination of international flights from the United States will also increase.

The WorldTravel BTI Benchmark Survey was conducted using an online survey in Aug. 2003. The survey received a 36% response rate with 127 respondents. Additional information on the WorldTravel BTI 2003 Benchmark Survey is available on the Consulting page of

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