Business Travel Professionals Seek to Cut Costs, Strengthen Relationships; NBTA Survey Indicates Recovery is Still 12 Months Away.

Business Editors

With an eye toward the National Business Travel Association's (NBTA) 34th Annual Convention in Salt Lake City, corporate travel professionals are looking for new ways to keep travel costs down and are redefining their relationships in response to the current economic climate, according to a survey released today by NBTA.

In a survey of 350 corporate travel industry professionals last month, 56% of respondents said they think it will be 12 months or more before we see healthy levels of business travel again. When asked what must occur for a turnaround in business travel, 56% cited reduction in travel costs and 46% said improved security procedures at transportation gateways. Overwhelmingly, most participants (74%) point to the airline industry as the most significant sector to impact the turnaround in business travel volumes. And while one-third of respondents expect travel prices to remain static, 68% of buyers believe airfares will increase during the rest of 2002.

"Business travel demand is not inelastic, as some in the industry once believed," said NBTA President Kevin Iwamoto. "Due to the current high costs of travel, many corporations are looking for innovative ways to meet their travel objectives while also adhering to the bottom line."

Trimming travel costs and strengthening buyer/supplier relationships are priorities for most respondents. 67% said they have increased contact with preferred partners in the past 12 months, and 53% have seen corporations implement travel cost-cutting measures.

Most corporate travel managers are reaching out to suppliers, with 78% saying they have sought to renegotiate current contracts and 75% saying they have increased contact with alternative suppliers in the last 12 months. "It is a good for the future of our industry to see suppliers working hand-in-hand with our travel managers to adjust to this new travel landscape, by providing services or renegotiating contracts," said Iwamoto. "Now more than ever before, we all understand how important good relationships are to the success of our travel programs."

In comparison, travel suppliers are implementing more alternatives to normal booking channels in order to reduce their distribution costs, with 50% saying they have implemented more travel contract/compliance procedures in the past 12 months. Yet, 86% of suppliers say they are seeing increased sales as companies began seeking alternative travel suppliers with lower costs.

Finally, NBTA asked its members what measures they will implement if the current security measures impede travelers. Most buyers (61%) say they will recommend increasing the use of conference calls or webcasts, while some recommend reducing out of town meetings and reducing the number of travelers (32% and 30% respectively). On the supplier side, very few (18%) would institute programs to improve customer care in the security process, indicating carriers willingness to provide efficient travel, but not to assume the government's role in security concerns.

The National Business Travel Association, established in 1968, represents over 2,400 corporate travel managers and travel service providers. NBTA members manage and direct more than 70% of expenditures within the business travel industry. NBTA is committed to the professional development of its members and offers educational and training opportunities. It is the source for critical information on the business travel industry.