Home | Business News | Browse by Publication | B | Business Travel News

2008 Budget Planner: Buyers To Tighten Belts.

Article Excerpt
Published airfares are expected to rise next year by up to 10 percent, though a growing number of travel managers said their companies are curtailing air spending, supporting concerns of weakening domestic demand. Likewise, buyers with managed car rental programs could hold pricing fairly steady. The hotel seller's market, however, remains strong. Buyers again face difficult negotiations, particularly in key cities and with higher-tiered properties.

"We sense a modest tightening of the corporate travel belt," said UBS analyst Kevin Crissey in a report issued last month. "It's not widespread, but the trend is negative. We surveyed travel managers just prior to the subprime crisis and found a higher percentage of firms are starting to restrict air spend."

Of 107 corporate travel buyer respondents, 43 percent said they have taken "significant steps to curtail spending on air travel." While more than half indicated no intentions to do so, Crissey said the number has increased from last October, when a similar survey showed 27 percent of respondents cutting air expenses.

Crissey said travel managers in the midst of limiting spending either were reducing the number of flights or limiting per-flight spending through business class restrictions or advance purchase policies.

Although International Monetary Fund transportation chief Caro Cook expects airfares to grow in 2008, the organization is trying to further rein in travel spending. "We're not expecting more travel, we're expecting the same," Cook said. "It's an indication that we're under more restrictive policy and therefore indiscriminate travel is not appropriate."

The UBS analysis pegged financial services firms as the likeliest to begin scaling back, "as the subprime impact causes increased scrutiny of discretionary spend. Should this occur, we believe the negative impact would be skewed toward legacy...

View this article FREE - Now for a Limited Time, try Goliath Business News
Free for 3 Days!