Business travel falling out of favor

Jun 18 2008 by Nic Paton Print This Article

Delays, cancellations, airport chaos, spiralling costs and time-consuming security checks have prompted managers in the U.S and Britain to look long and hard at whether they really need to travel. Where possible, they're coming up with the answer 'no'.

American managers avoided going on 12 million business trips in the past 12 months while, for their counterparts in the UK, particularly those in the hard-pressed financial services sector, the days of expensive corporate junkets appear well and truly to be over.

A study by the U.S Travel Industry Association found that delays, cancellations and inefficient security checks were now at the top of travellers' irritations when it came to air travel.

Overall some 41 million trips were avoided over the past 12 months (or around 112,000 per day), of which 12 million were leisure trips, it added.

The total economic impact of all this was $26.5bn, including losses of $9.4bn to the airlines, $5.6bn to hotels and $3.1 billion to restaurants, it added.

The survey also highlighted deep anger among many travellers, particularly frequent flyers, at the state of the U.S airline network.

Nearly eight out of 10 air travellers polled believed the system was either "broken" or in need of "moderate correction".

Nearly two thirds thought it was deteriorating and a third was generally dissatisfied, rising to nearly half of frequent air travellers, or those who did five or more trips a year.

Nearly four out of 10 air travellers felt their time was not respected in the air travel process, a figure that increased to more than half among frequent air travellers.

"Many travellers believe their time is not respected and it is leading them to avoid a significant number of trips," agreed Allan Rivlin, a partner at Peter D Hart Research Associates, one of the polling firms involved in the survey.

The British downturn in corporate travel has been sharply highlighted by latest financial figures from travel group Hogg Robinson.

It warned in its annual results that firms were cutting back on foreign travel, with financial services firms in particular controlling their spending on events and travel, although demand from smaller businesses was also in decline.

The finding adds to a picture of sharp cut-backs within many blue chip British firms, with various reports suggesting that a number of investment banks have even been putting the brakes on taxi travel and corporate entertainment.

"We began to see some changes in the final quarter of the financial year and some of our managed clients, particularly those in financial services, have sought to reduce their overall travel expenditure," said the company.