The economic crisis is pressuring companies to avoid business travel. But the current discussion is often very near-sighted – after all, developing and maintaining business contacts is crucial to the global economy.   

One could easily get the impression that the media are often linking various activities that are not really related. Business travel, for example, sometimes comes under attack in economic circles as well as general news media.  At least, this is the tone of the article “Bankers: by all means take my tax and spend it on business travel”, which was published in the online edition of the London Times on February 17, 2009. According to this article, discussion on business travel will not only increase, but demands from politics and the media could lead to further underestimation of the significance of business travel – to the detriment of the desired economic recovery. Author Mark Frary names two arguments that underscore the importance of business travel for the hoped-for economic upswing:

1) Radical limitation of business travel will damage airlines as well as the hotel branch, both of which realize a great part of their profits from just this type of travel.

2) It endangers business relationships that are essential for business because personal contact is decisive for nearly all fundamental business decisions.

As a matter of fact, the Association of German Travel Management (VDR) is reporting that the financial crisis is “massively” affecting business travel behavior. While a German survey held in October 2008 showed that only 14% of respondees said that they were cutting all travel that was not absolutely necessary, this figure jumped to 32% in January.  The cuts are particularly dramatic when one analyzes international developments: According to a current AirPlus study, circa 40% of all travel departments of European companies and over 60% of all US American companies confirm that the crisis is negatively affecting travel management. However, a current survey by the AirPlus US team shows that over 80% have already reacted and changed their travel programs

The International Air Transport Association (IATA), whose members number 230 airlines worldwide (93% of all air traffic), has announced that the “abrupt decline” of business activities and international trade has caused a “massive drop in bookings”. The German news magazine DER SPIEGEL has now published current figures. According to the article, bookings in December dropped 13% in comparison to the previous month. Asia showed the greatest losses with a reduction in demand by one quarter; premium traffic in Europe plunged by 16%.

But apparently, savings measures that are too rigid overshoot the mark. “Business travelers are an indispensable component of the success of modern companies,” declares Michael Kirnberger, President of the VDR. Limiting direct customer contact could affect business just as disastrously as the credit crunch. In addition, at a higher economic level, business travel makes a significant contribution to added value, according to Kirnberger. A 10% drop in business travel would remove some five billion euros from the German economy alone. With an 11% market share of all international business trips, Germany is considered to be the market leader in the business travel area.   

Currently – or so it appears – companies throughout the world are looking for “new equilibrium” in the area of business travel. But in doing so, they should let themselves be influenced neither by politics nor the media. If so, they could end up making the same mistakes of those managers who contributed to the economic crisis: orientation solely to balance sheets, short-term profits and savings potential. The significance of business travel is seen only in the long term.

London Times: Bankers: by all means take my tax and spend it on business travel
DER SPIEGEL: current figures (German)
Current survey by the AirPlus US team