Business Travel Tips

Despite softness in the economy and rising costs for both domestic and international trips, companies say that travel is a crucial element for their business.
According to the American Express Business Travel’s second annual Strategic Sourcery procurement practices survey, released today, 83 percent of companies expect their travelers to take the same or increase the number of trips this year as compared to last year.

- Companies continuously searching for ways for cost savings

62 percent of companies are looking to procurement activities to produce savings of five to 15 percent this year with another 19 percent expecting even greater savings. Over the past year, 67 percent of the companies surveyed credited procurement activities with creating savings for their travel budgets.

According to the survey data, meetings management continues to be a focus for savings opportunities. Nearly half of the surveyed companies reported the use of procurement practices in meeting planning with a four percentage point increase over last year’s results.

Frank Schnur, Vice President of Consulting for American Express Business Travel’s Advisory Services, says: “Along with the traditional areas of travel spend – air, hotel and car – companies are also scrutinizing their meetings programs for potential new areas for cost savings. Applying many of the same practices and strategies, companies are achieving meeting savings through strategic sourcing and other procurement best practices,”. (source)

American Express Business Travel announced it will be launching its Intelligent Online Marketplace (AXIOM) for travel and related business services in the UK later this year.

This Web-based marketplace, launched in January 2007 in the United States, brings together inventory from more than 135,000 suppliers to provide an industry leading one-stop-shop, where employees can find, purchase and manage both traditional travel, flights, hotel stays and car rentals, and other services, such as airport parking, dining, ground transportation, package shipping and audio conferencing.

AXIOM aims to give companies the control over unmanaged expenses which, according to American Express, can account for 49 percent of all travel and entertainment costs, the other half being from managed expenses such as air, hotel and car. (source)

By aggregating thousands of suppliers in one online shopping environment, AXIOM helps travel managers and procurement managers strategically source secondary corporate services in addition to the traditional sourcing of fares, room nights and rentals.
Business services suppliers through AXIOM will be able to directly offer their services to clients of American Express Business Travel.

According to a report just released by flight data company Official Airline Guide (OAG), not all airlines seem to be cutting flights and seats.

OAG’s statistics reveal domestic flights in the United States dropped by 3 percent this May compared with the same month last year.
However the report also shows discount airlines increased their domestic flights by 4 percent in the same period. That means 6,661 more flights and 752,392 more seats.

For international flights, OAG statistics for the same period show a rise in the number of flights to and from the United States by 3 percent with 5 percent increase in seating capacity.

A new survey sponsored by the UBS investment bank shows a downward trend in spending on corporate travel. Industry analysts expect the trend to worsen in the next few months.

(photo by mamamusings – CC license).

The combined effect of a weakened economy and increasing travel costs leads most of companies to adopt travel policies increasingly tighter.

Hotel rates have risen 15 percent in the past three years.
Business-class airfares are up 12.4 percent from February last year, as economy fares increased 6.2 percent over the same period. You also have to add surcharges and fees for items — that were previously free, such as checking a second bag.

In the effort to limit travel costs increases, many employers are negotiating agreements with airlines and hotels, so considerably reducing the travelers choices.
In order to adapt their offer to these new travel policies, some hotel chains — such as Hyatt and Hilton, are launching subsidiaries in the mid-priced range.
On the airline side, many carriers report increasing demand for a class segment that is a hybrid of economy and business cabins, from customers who were used to travel in business-class only.

Lufthansa announced the five-times-per-week service from Orlando to Frankfurt will become a daily service beginning October 26.

The German carrier currently flies five times a week from Orlando International Airport to Frankfurt (Germany) — six times a week between November and March.

Lufthansa launched this service in October 2007, offering the only First-Class cabin.