Business Travel News - December 15, 2008 - (Page 26)

NEWS ’09 Travel Budgets Not Reset Continued from page 25 ry, and domestic transactions decreased 7.9 percent. October was the first month in which international transactions fell by a larger percentage than domestic transactions since both segments began dropping earlier this year. Travelport CEO Jeff Clarke said year-to-date overall segments are down 16 percent through Nov. 11 from 2007 levels, and Americas segments are down 15 percent. “We’re seeing an increasing slowdown. The recent decreases in fuel prices and some of the recent price actions you’re seeing by some of the airlines have yet to show a differential in the trends here,” he said. “These numbers are as much of a decline as we’ve measured in many periods, and they’re quite serious.” Another global distribution system provider is forecasting a 10 percent yearover-year decrease in transactions in early 2009. “The first half of the year is going to be challenging,” said HRG North America president Tom Gleason. “All companies are being prudent on their budgets.” BCD’s Miller said a significant part of travel transaction reductions are coming from replacing internal travel and meetings with videoconferencing, which yields on average a 10 percent to 20 percent trip reduction. Enterprise management software provider Deltek is implementing such technology in some of its locations, which travel manager Karoline Mayr estimates will reduce non-billable travel expenditure by 20 percent next year. The company has set a flat travel budget for next year. In November, non-billable travel has undergone a significant drop from a combination of travel freezes and videoconferencing efforts. In addition, Mayr said there is increased compliance as more employees become more conscious of their spending. “At this time, peo- DELTEK’S KAROLINE MAYR Using tech to offset travel ple don’t want to land on a compliance report, which helps travel buyers save money and show more compliance,” she said. Dublin, Calif.-based Sybase plans to reduce travel spending by 10 percent to 15 percent in 2009, according to purchasing manager for global card and travel Patricia Carlin. The company, which so far has added videoconferencing facilities in several locations, now requires a trip purpose and pre-trip approval with each booking. While Carlin said some of the savings would come from negotiations, the company plans to add more videoconferencing facilities to cut its transactions to meet the savings goal. These cutback efforts are coming from a company whose revenues increased by double-digit percentage points over the past several quarters. “It doesn’t mean we are not being affected by the economy,” Carlin said. “We are making sure we are running as smart as possible in everything that we do, and certainly travel has a lot more visibility than it ever has. This year is when we really started the serious push on that a little earlier in the year, and as the year has gone along it’s gotten stronger and stronger. As we’ve come through the budget cycle, we are absolutely putting a big eye on travel for next year. “Internal trips are being scrutinized, managed and reduced pretty carefully. As a company, we are on such a great path that we don’t want to interfere with our ability to do business, but where we can we’ll use videoconferencing to keep people off of airplanes.” While Philips Electronics’ sales and profits remain relatively strong, it is undergoing its own travel savings push, which will accelerate next year. Philips director of strategic sourcing for airlines and corporate card Peter Sijbers said the company will have videoconferencing in its top 20 locations by year-end and plans to expand the project in 2009. Meanwhile, the downward business travel trend may turn before the economy does, said American Express Business Travel global advisory service vice president of North America Frank Schnur. “Looking at past downturns, travel ramps up in advance of the economy ramping up,” he said. “As people see the beginnings of it hitting the bottom and things are starting to come back, they travel in advance of that to take advantage of the recovery and start bringing in new business.” ■ sharris@btnonline.com ■ WASHINGTON WIRE IRS LOWERS MILEAGE REIMBURSEMENT RATE The U.S. Internal Revenue Service on Jan. 1, 2009, will lower its standard mileage rate to 55 cents per mile—3.5 cents less than the current rate, which the government raised mid-year amid escalating fuel prices. Many businesses rely on the rate to calculate deductible costs for employees who use personal vehicle for business. IRS, in a special mid-year adjustment beginning July 1, raised the rate by 8 cents to 58.5 cents per mile (BTNonline, June 24). AAA this month reported national average prices for regular unleaded gas at significantly lower rates than the $4.07 national average recorded on the day IRS revised the rate earlier this year. The Internal Revenue Service acknowledged that gasoline costs are “a significant factor”in determining the rate, but other costs, including depreciation, are taken into account. The Internal Revenue Service said the standard rate for 2009 factors in a steady decline in oil prices since summer, but also reflect “generally higher transportation costs For on-demand Webcasts, compared to a year see btnonline.com/Webcasts ago.” While not a requirement, most businesses use the IRS rate as a guideline in reimbursing their drivers. In Business Travel News’ 2006 Expense Manager’s Survey, 82.5 percent of 221 responding travel and expense managers said they used the rate to reimburse travelers. AIRLINES BANK ON COURTS TO OVERTURN DOT NEW YORK SLOT AUCTION PLAN The Air Transport Association said it expects a court of appeals in Washington, D.C., to rule on whether the U.S. Department of Transportation can proceed with controversial slot auctions at the three major New York City-area airports before the first auction date on Jan. 12, 2009. In court documents filed late last month, ATA said neither the Federal Aviation Administration nor the public would gain benefits from the auctions, while airlines “will suffer irreparable harm if the Federal Aviation Administration is permitted to auction slots.” DOT has held to its plan to proceed with the auctions as set in a final rule released in October, despite the Air Transport Association-led lawsuit and a ruling by the U.S. Government Accountability Office, Congress’ investigative arm, that DOT does not have the legal authority to auction slots (BTNonline, Oct. 6). DOT plans to gradually auction “up to 10 percent of the landing and takeoff slots these airlines currently operate free of charge today” at John F. Kennedy, LaGuardia and Newark airports. Unless the appeals court intervenes, the auctions, which DOT said would enhance competition and reduce congestion, are slated to begin next year and continue through 2014. —Jay Boehmer 26 Monday, December 15, 2008 www.BTNonline.com Business Travel News http://www.btnonline.com/Webcasts http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - December 15, 2008

Business Travel News - December 15, 2008
Contents
Inside Track
Profiles In Travel Mgmt
Forum
Aviation
Lodging
Ground Transportation
Travel Management
Meetings Today
Washington Wire

Business Travel News - December 15, 2008