Two thirds of corporates cut travel budget

19.11.2009   (ABTN)

by Stanley Slaughter

Average spend drops 18% – Amex

Two thirds of European corporates have cut their travel budget in 2009, American
Express said today (November 18).

The TMC’s European Business Travel Baromter for 2009 said the 366 companies quizzed
had cut their budgets average by 18%.

The survey of buyers in ten European countries found that while 66% had cut their
budgets, 23% had spent the same and only 11% saw their spend rise.

But Amex said that the average cut of those who did reduce their budget was 31%.

The figures, released today at the Espace Voyages Professionnels (EVP) in Paris,
showed that corporate were placing greater importance on T&E spend.  

A good majority (517%) said their budgets were now dedicated to maintaining existing

Only 27% said the budget was used for internal meetings a while 8% said it was
to keep in contact with suppliers.

Amex said companies had introduced a variety of methods to make savings.

The top way was a “best buy” strategy followed by use of a preferred TMC, re-negotiation
with suppliers and use of alternatives to travel, like video conferencing.

Companies with an annual spend of under €5m tended to favour best buy strategies,
use of the preferred TMC, and controlling seminar and conference expenditure.

Larger companies with a spend of more than €20m favoured renegotiation of supplier
agreements, the increased use of preferred TMC with ‘best buy’ and the increase
of restricted fares.

David Herrick, Amex’s senior vp and general manager for business travel in EMEA,
said a “new normal” was emerging in corporates’ behaviour.

He added: “We’ve seen travel policies tighten up, purchasing controls increase
and employee travel driven by client retention needs where as a focus was on driving
new business.”

The TMC said companies were adopting a “wait and see” approach to 2010.

While 20% expected to increase their travel budget, 61% said there would be no
change with 19% expecting a cut.

Optimism varied from country to country with Germany (33% of companies), the
Netherlands (28%) and Britain (23%) the most upbeat.

Mr Herrick said: “Undoubtedly, the economic crisis has placed a significant strain
on companies, who are having to think about their travel spend in a much smarter
way and will continue to do so as we move into 2010.”‘two-thirds-corporates-cut-travel-budget