28 July, 2008: In an effort to reduce costs, travel and procurement managers are focusing on enforcing travel policy - but while they may be driving out costs in some areas, preferred supplier compliance is declining, according to BCD Travel´s 2008 Travel Program Survey.
This year´s survey shows a 23 percentage point increase in companies whose policy enforcement is either ´strict´ or ´moderate to strict,´ from 36 percent in 2007 to 59 percent in 2008. But the number of companies enjoying air program compliance levels of greater than 70 percent decreased by eight percentage points from 2007, from 65 percent to 57 percent. Despite aggressive measures to strengthen policy enforcement, they are still struggling, in the face of increasing fares and decreasing capacity, to secure space on preferred carriers.
"Companies are focused on reducing their total cost of travel - but doing so in a way that balances their other top priorities of improving traveller satisfaction and maintaining traveller safety and security," said Mary Ellen George, general manager of Advito, the independent consulting division of BCD Travel, which provided data analysis and forecasting for the survey. "To help support them in this task, they are reducing processing costs through increased usage of online booking tools; they are enhancing policy communication to travellers; and they are enforcing the use of preferred suppliers and the preferred agency."
BCD Travel released Insight on Corporate Travel, an analysis of and commentary on the survey findings, today at the National Business Travel Association´s 40th Annual Convention & Trade Show in Los Angeles. Conducted in April, the annual Travel Program Survey (formerly known as the Client Benchmark Survey) represents the views of 333 BCD Travel customers from major markets across the globe.
Insight on Corporate Travel examines travel program strategy, travel policy trends and supplier sourcing issues as well as major travel areas such as air, hotel, car, rail and meetings.
Referring to this year´s expanded respondent base, which grew by 56 percent over 2007, Louise Miller, executive vice president, Global Business Solutions, sales and marketing for BCD Travel, said, "We updated the structure and focus of the survey to reflect the profile of our client base. As BCD Travel, we have significantly more global and ultiregional clients now than two years ago; the results reflect the wide business, cultural and geographical diversity of our clients."
Below are some of the survey´s key results:
• Program Objectives: Reducing the total cost of travel is cited as a goal by 97 percent of respondents. Other top objectives include traveller satisfaction and traveller safety and security.
• Travel Policy Enforcement: Fifty-nine percent of companies now saying their policies are either ´strict´ or ´moderate to strict,´ up from 36 percent in 2007.
• Travel Program Responsibility: Seventy-four percent of respondents are reporting into procurement - a jump of 30 percentage points over last year. Sixty percent of buyers, however, believe they have no influence on demand management (the ability to control the number of trips taken).
• Travel Demand: More than half of buyers overall (53 percent) predict their organizations´ demand for travel will increase by the end of 2009. Growth in demand will be strongly fuelled by increases in emerging and growth markets. For example, 27 percent of buyers estimate demand in Asia will grow by more than 10 percent. (These optimistic results reflect the global nature of the BCD Travel survey as well as its first quarter timing. A number of current signals indicate demand in United States is dropping by at least 10 percent this year, including a drop in the growth of airline passenger traffic reported by IATA and a decrease in segments booked by some global distribution systems in the Americas. However, some industry experts also feel that this reduction will be temporary and demand will rebound within the next 12 months, in line with BCD Travel survey respondents.)
• Online Booking: Eleven percent of companies have increased their usage of their online booking tool in the past year. Of those companies who do not already have a tool in place, 47 percent are planning to implement one within the next two years.
• Policy Compliance: Compliance with air policy is high (i.e., greater than 70 percent) in 57 percent of companies surveyed, an eight percentage point dropover figures from 2007. High compliance with hotel policy has fallen by 7 percentage points since last year, from 36 percent to 29 percent.
• Hotel Challenges: Seventeen percent of companies face sourcing and compliance challenges because of high demand for hotels and low capacity in key markets.
• Expense Automation: More than 60 percent of travel buyers now have full responsibility for, influence on or an advisory role in the expense management process. Overall, 27 percent of respondents say they have an automated system in place, and 40 percent of companies say they plan to implement such as system over the next two years.
• Corporate Social Responsibility: Travel programs are beginning to adopt CSR initiatives, but stated intentions (e.g., policy wording) outweigh tangible actions (e.g., sustainability criteria in procurement).
Insight on Corporate Travel is available at www.bcdtravel.com.