New initiatives to manage travel spending reduce costs
Results of new NBTA survey reinforce value of travel buyers
By Susan Avery -- Purchasing, 4/21/2009 11:07:00 AM
While companies continue to reduce spending on travel, results of new research by the National Business Travel Association (NBTA) show that new initiatives travel buyers put in place are helping to lower costs. It also points out that companies value the efforts of their travel buying team.
For its research, NBTA conducted a survey of 119 corporate travel managers in March 2009.
Eighty-five percent of respondents say their companies have decreased travel spending since October 2008 and more than 70% expect continued decreases through 2009.
In response to cutbacks, 53% of respondents report that new travel management initiatives have saved companies more than $50,000 since October.
According to the NBTA research, the top five travel management initiatives to cut costs are:
1. Overall travel and entertainment (T&E) budget cuts.
2. Encouraging or requiring less air travel.
3. Sending fewer employees to conventions/conferences/trade shows.
4. Emphasizing advance purchase of air tickets.
5. Strengthening travel policy mandates, enforcement of travel policies.
“In a time when corporations are suffering because of a down economy, traveling smarter becomes a top priority,” says Kevin Maguire, president and CEO at NBTA in Alexandria, Va. “This research shows that during a recession, an efficient travel management program is key to saving money while still keeping travelers on the road to help bolster revenue. Corporate travel managers are coming to the rescue when corporate cost heroes are needed most.”
The NBTA research also shows a confidence in travel management, as 63% of respondents say they feel secure in their current positions. While half of those respondents say their companies seem to value their positions more than ever in a cost cutting economy, nearly 20% report reduced travel staff in recent months.
“The current value placed on travel managers is not surprising given the effective policy changes and savings companies are seeing,” says Maguire. “It is those companies that do eliminate and reduce travel staff that will risk losing more money in the long run.”
According to results of a survey by Purchasing reported in February in Today’s travel procurement professional knows how to manage supplier relationships, travel buyer skill and expertise at negotiating relationships with travel services suppliers is especially important to management now. Survey respondents are using such strategies as consolidating the supply base, negotiating global agreements with providers and adopting technology to reduce costs associated with travel spending.
Respondents to the NBTA survey also indicate that both the economy and recent negative perception of corporate meetings and events have been major factors in reduced spend for meetings, conferences, incentives and client events despite the fact that 85% report offsite strategy meetings and leadership conferences as an important part of their companies’ business planning and talent-development process.
“The combination of cost-cutting measures due to the economy and perception-driven reductions is devastating the corporate travel and meetings industry,” says Maguire.
See also: Purchasing uses cards to analyze spend, seize cost-savings opportunities in travel
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