Businesses cut back on non-essential trips, hurt travel market

The economic downturn is hammering business travel as companies continue belt-tightening efforts.

The economic downturn is hammering business travel as companies continue belt-tightening efforts.

Businesses are having fewer meetings, sending fewer employees on trips and choosing no-frills options for essential travel, said Kevin Maguire, president and CEO of the National Business Travel Association.

Non-essential travel, in better times a perk for employees, is becoming a thing of the past; cutting it topped an industry survey’s Top 10 list of economy measures planned in 2009.

Maguire, 57, who arranges travel for 20-plus athletic teams at the University of Texas, Austin, said the 2009 Business Travel Overview and Cost Forecast projected business travel costs would be up 5 to 8 percent overall in 2009.

The forecast projected costs would be up 7 to 10 percent for airfare, 1 to 4 percent for hotels and 1 to 3 percent for car rentals.

Maguire spoke at a monthly luncheon of the Mid-South Business Travel Association at The Peabody.

Association president Graves Goforth, a hotel general manager, said the subject was sobering.

“It’s bad news, obviously. Travel’s going to be hit as much as any other sector of the economy.”

The association also named members of the year: Kathy Kennedy, travel manager for First Tennessee/First Horizon Bank, was named direct member of the year; Amy Marek, of Omega World Travel, was named allied member of the year.

Maguire said the industry survey indicated business travel would continue to grow in 2009, but at a much slower rate than 2008. It found mixed opinions about the future among corporate travel buyers:

51 percent see continuous growth, but slower than last year;

8 percent are hopeful the economy will recover between 2009 and 2010 and help business travel;

2 percent expect it to grow rapidly because of a growing global economy;

39 percent expect business travel to decline with the economy.

Maguire said attitudes could have worsened since the survey was done in September and October.

Maguire railed against the airline industry’s move to a la carte pricing and said 76 percent of travel managers believe the fees mislead the public.

“I think it’s the stupidest move the airlines ever made. It has confused corporations and infuriated passengers. I think it’s a bad scenario. If the airlines need to (raise more revenues), put it in the fares.”

Top 10 Business Travel Cost Controls

1. Reducing non-essential travel

2. Reducing number of meetings/events

3. Ramping up policy mandates

4. Reducing number of employees traveling to conferences/events

5. Implementing e-folio hotel data, making hotel data available electronically to managers

6. Renegotiating corporate rates

7. Bidding master travel management center contracts

8. Reducing number of individual travelers

9. Centralize meetings management/implement strategic meetings management policy

10. Reducing luxury hotel bookings in favor of mid-priced hotels

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Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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