Ask a simple question and get a complicated answer.  That’s what AirPlus International did in a recent joint survey of 99 travel management professionals by asking whether travel budgets in 2010 would increase, decrease or stay the same when compared to 2009. On the surface, the answers were simple: 23.4 percent of respondents looked forward to budget increases, while 19.5 percent felt sure their budgets would take a turn for the worse. The majority, just over 57 percent, were confident that budgets would hold steady at current amounts. Dig a little deeper, however, and the numbers show a more complex situation.

Corporate travel budget cuts were all over the map in 2009. This year, 7 percent of respondents worked with travel budgets that were reduced by less than 5 percent; 14 percent of respondents’ budgets were subject to 5 to 10 percent decreases; and 13 percent of respondents’ budgets were cut by 10 to 15 percent. Larger groups of corporate travel pros were subject to even greater budget reductions: 18 percent saw budget reductions of 15 to 20 percent, while more than one-quarter of respondents were hit with budgets decreased by more than 20 percent.

A lucky few-6 percent of survey respondents-actually saw travel budget increases in 2009, while about 15 percent enjoyed budgets that were on par with 2008 levels. More than 80 percent of the programs with budgetary stability in 2009 will hold steady or even increase further for 2010.

For the 80 percent of survey respondents who cited budget cuts in 2009, the future is more volatile. Those with the smallest budgets cuts in 2009 (less than 5 percent, but more than zero) are the most likely to experience additional cuts in 2010. Indeed, nearly 43 percent of these respondents anticipate additional cuts. In contrast, those companies that cut budgets by 5 percent to 10 percent are the most likely to hold budgets steady. Nearly 86 percent of this category indicated unchanged budgets for 2010, but none indicated budget increases.

To be sure, the corporate travel industry and the professionals managing programs and travelers in this environment are likely to have an interesting ride as 2010 unfolds. The after-effects of 2009 are clearly rippling into 2010 even as the economy begins to improve and corporations take cautious steps to return to a focus on investment and growth. Click on the PDF to read the full study results.

Download the full report for complete results:
AirPlus..The Wire December 2009 (PDF, 263 KB)

In the most recent survey conducted by AirPlus International, more than 190 travel professionals weighed in on their company’s current use of travel alternatives, from virtual conference technology to increased conference calls. While many companies have ancillary motives for offering technology solutions to reduce overall corporate travel – such as employee quality of life and CSR initiatives – the resounding message was that steep budget cuts are forcing travelers to find new modes of connecting to colleagues and clients.

When the economy began its dramatic decline in last quarter of 2008, the idea of demand management had already made headway in many corporate travel departments. An ACTE survey conducted in June 2008 indicated that corporations were already researching opportunities to reduce travel by offering technology alternatives. The current survey shows that many have implemented changes since then.

When asked to rate the rationale behind their travel alternative strategies, more than 63 percent cited budget cuts. Nearly 44 percent indicated that increased travel costs were their most pressing concern. Only slightly more than 9 percent of respondents submitted employee quality of life as their top rationale for the change. In addition, corporate social responsibility – i.e. the effort to reduce the company’s carbon footprint—was cited by more than 22 percent as “urgent.”

The ultimate question, of course, is how effective virtual travel is when compared to actual face-to-face meetings, and the jury may still be out on this issue. Only about 6 percent of respondents characterized virtual travel as “almost always” as effective as meeting in person. And almost 4 times that, at nearly 25 percent of respondents wrote off travel alternatives as rarely or almost never as effective as face-to-face meetings. Over half at 67.4 percent stated only “sometimes.” This could depend on the priority status of a meeting. It may be higher priority if it’s a new business contact or where necessary to finalize a contract. Whereas video conferencing might be an alternative for meetings internally or with well-established partners. However, as the data clearly shows, these are not overall substitutes for face-to-face contact. Business travel is still relevant even in today’s economic climate.

How well the technology enables corporations to forward their business relationships, while cutting costs today, will determine its long-term viability. Ultimately, it’s the economics.

For more results, click here:

AirPlus…The Wire June 2009 (PDF, 225KB)

Additional Resource:

Autodesk Pulling Demand Management Levers to Optimize Global Travel Program