Business Travel News Procurement Practices 2009 - (Page 16)

Gauging Corporate Travel’s Downturn T to spend less on travel and take fewer trips. In 2007, about half he economic downtur n said their plans wer e to incr ease spurred a dram atic shift in travel spending and trips. These results jibe with other 2009 corporate travel The budgets and for ecasts. recent industry data. Economist Intelligence Unit, in Business T ravel News’ Procurement Practices survey partnership with Amadeus, in shows the gulf in attitudes toward February reported that nearly half corporate travel in 2009 com- of 354 executives surveyed said they were planning fewer trips pared with previous years. Two-thirds of r espondents plan during the next 12 months, and to cut back on travel spending only 11 percent said they expectthis year, and about the same ed to take mor e business trips percentage said their travelers will this year. About that same time, make fewer trips this year than in an Association of Corporate previous years. It’s a complete Travel Executives survey of 176 reversal from 2008, in which only travel buyers showed that 71 pere about 20 per cent were planning cent of r spondents plan to spend BY MICHAEL B. BAKER Percentage companies saved* by applying procurement practices to travel in the previous 12 months Less than 5% 5% to 10% 11% to 15% 16% to 20% More than 20% Average 13% 44% 24% 12% 7% 11% *Of total annual travel spending, including cost avoidance for air, hotel, car, meetings, agency, etc. less on travel in 2009. “A lot of companies ar planning e on traveling less and spending less, so that r eally creates an opportunity for travel and pr ocurement professionals,” said Frank Schnur, American Express Global Advisory Services vice president. “They can go to CFOs and discuss how to make these cuts intelligently instead of just making broad, sweeping cuts.” Patricia Carlin, purchasing manager for global card and travel for Dublin, Calif.-based Sybase, said her goal is a 10 per cent reduction in travel and entertainment spending this year. “We absolutely will reduce spending by reducing trips,” she said. “W e’re still consolidating global locations— we’ve brought in Australia and Singapore, so we’r e bringing in more countries to manage—but we’ve decreased T&E overall.” A 10 percent reduction is no small order, but Sybase’s goals actually are modest by measure of the r esults of the survey . Respondents said they plan to see about a 20 percent decrease on average in both travel spending and actual trips. In the Economist survey, 16 per cent of the executives said they would Percentage companies anticipate saving* by applying procurement practices to travel in the next 12 months 13% 13% 25% 7% 41% 10% 26% 9% 19% 36% Less than 5% 5% to 10% 11% to 15% 16% to 20% More than 20% 2009 2008 BUSINESS TRAVEL NEWS *Of total annual travel spending, including cost avoidance for air, hotel, car, meetings, agency, etc. cut back the number of trips by 30 percent or more. Sybase’s Carlin said demand management would play a large role in her T&E cutbacks. “W e’re really getting into our stride, and we’re having a lot mor e pre-trip approvals than we’ve ever done,” she said. “Ther e are going to be fewer trips and a much gr eater drive to videoconferencing for internal meetings.” While Carlin said shorter trips were not part of her company’ s cost-reduction strategy, some companies will see r eductions in that manner. The Economist survey, for example, showed the number of executives who said one-night stays wer e the par for their business trips incr eased to 16 percent for this year, compared with 11 percent in 2008. These cutbacks generally should not impair negotiating leverage. The minority holding travel steady or incr easing it will be in a great position to renegotiate agr eements, said Bob Brindley, vice president for BCD Travel consulting unit Advito. “Those who have dramatic declines year-over-year will have a more difficult position, as well as those who ar e changing policy, such as bringing travelers out of the premium classes,” he said. The percentage of companies that save money by applying procurement techniques to travel has remained fairly steady in the past few years, albeit at a str ong majority, according to BTN’s survey results. The percentage companies expect to save by using those techniques, however, is higher on average this year than Procurement Practices 16 April 6, 2009 www.BTNonline.com http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News Procurement Practices 2009

Business Travel News Procurement Practices 2009
Contents
Letters To Our Readers
Measures For Maintaining Discipline
Demanding Pre-Trip Management
Expanding The Use Of Travel Metrics
Outsourcing Levels Holding Steady
Gauging Corporate Travel's Downturn
Procurement Practitioners: Managing Change, Demand

Business Travel News Procurement Practices 2009