In business travel, the frill is gone; Cheap fares, Internet booking push down average trip cost, survey finds
Mar 25, 04 | 11:28 pm
In business travel, the frill is gone; Cheap fares, Internet booking push down average trip cost, survey finds
It may not be much fun anymore, but at least it's cheaper.
Stingy bosses will find cause for cheer in the results of the latest business travel cost survey released by Rochester-based Runzheimer International, which studies such things.
Efforts by corporate travel managers to shave down travel expenses have resulted in tabs that are shrinking faster than a bar of hotel soap.
Last year, the average cost of a domestic business trip was $915, down from $1,027 in 2002 and $958 in 1996, according to Runzheimer's survey of 168 travel professionals.
Some of the purported fun of business travel is being squeezed out along the way.
"Travel seems glamorous to some people, but it can be very punishing," said David Stempler, president of the Air Travelers Association in Washington, D.C. "It used to be that people would pamper themselves a bit while on the road, but that is not acceptable in the tightened economy. The number of people who relish business travel, and of being away from home and family for work purposes, is shrinking."
Runzheimer's client roster includes 60% of the Fortune 500.
Putting the brakes on the cost of travel is no easy feat. Companies have relentlessly pursued lower travel expenses, said Phyllis Schumann, a Runzheimer travel consultant. Increased use of low-cost airlines, greater availability of Internet airfares, and a new breed of price-conscious travelers have helped.
The cost of a domestic trip varied widely in the Runzheimer survey, with 5% of trips costing less than $500 and 13% costing $1,500 or more.
"But the days when you could spend whatever you wanted are long gone," said Fran Kastengren, a Runzheimer marketing specialist. "There are more restrictions and policies to make sure that you save money."
Some of the lowest airfares in years are a prime driver of travel costs, according to Runz-heimer. Hotel rates remain flat and have been down in some cases as hotel managers have struggled to maintain occupancy rates.
Firms are negotiating better deals for business travel rather than pay full market rates. Some companies are shortening trip times and are using travel alternatives like Web conferences, Kastengren said.
Travel expense accounts are being scrutinized more closely, and business travelers are shying away from luxuries like expensive restaurants, Stempler said. "There is also a bit of reverse chic going on in that people are bragging about the low price they paid for their airfare and the great deal they got on their hotel room," he said.
Some employers are requiring employees to book their own trips through the Web, allowing them to get the best combinations of price, schedules and frequent-flier miles.
Businesses are turning to company-sponsored credit cards as a way to both track employee spending and gain additional leverage with airlines, hotels, rental car agencies and even restaurants.
Ninety-three percent of businesses now have company-sponsored credit card programs for their traveling employees, according to the Business Travel Coalition, an advocacy group based in Radnor, Pa.
The flip side of the card programs: It sometimes takes a full-time staffer to keep track of them. And employees don't rack up frequent-flier, frequent-stayer and other frequent-user perks on their personal cards.
That's a small price to pay, said Kevin Mitchell, Business Travel Coalition chairman, because companies can negotiate thousands of dollars in savings just by signing up.
TRAVEL COSTS
Average costs of a domestic business trip, according to Runzheimer International
$958 in 1996.
$1,037 in 1998.
$970 in 2000.
$1,027 in 2002.
$915 in 2003.
