Business Travel Still Below Normal One Year After September 11th, Finds NBTA Survey
Economy and High Fares Contribute to Low Travel Spending
ALEXANDRIA, Va.--A year after the terrorist attacks on America, corporate travel is still below normal, according to a new survey by the National Business Travel Association (NBTA). Yet, the economy, not security, is still the main reason for the current low levels of travel, according to survey respondents.
In a survey of 200 corporate travel managers conducted August 29 - September 5, 70% responded that travel in their companies is down from this time last year by up to 20%. 72% said their travel was below 2000 levels, which is the last time travel was considered normal. In fact, 31% of respondents said their travel was down by 20% or more from 2000.
In comparison, fewer respondents (65%) said their spending was below 2000 levels in a March 2002 NBTA survey.
In addition, most travel managers see business travel recovery coming slower than previously expected. 73% said their spending in the next six months would stay the same or increase. The majority of respondents (62%) think that recovery will take more than 12 months, while the majority of respondents (60%) in the March survey expected travel to be back to normal in 6 to 12 months.
In order for business travel to return to normal levels, 72% said that a stable economy was necessary, while 45% referred to the need for airline price reform. "Corporations have been forced to make tough decisions regarding their travel budgets over the past year," said NBTA President Kevin Iwamoto. "While travel is still an essential part of doing business, economic conditions must improve before corporations are willing to return to previous spending levels."
Most respondents agree that airline pricing will play a large role in the recovery of the industry. 63% said that tighter restrictions on non-refundable tickets, like those announced by US Airways and other airlines last month, would dramatically increase their companies' travel costs in 2003. "Most business travel is done on non-refundable tickets, so these restrictions are going to increase corporations' travel costs dramatically," said Iwamoto. "Corporations and airlines need to work together to develop a new, more rational approach to market pricing."
Cost cutting is a major force behind new travel policies being implemented by corporations. Since September 11th, companies have eliminated or cutback on luxury travel (40%), have redefined non-essential travel (39%), and are using more economy hotels, rather than high-end properties (29%). Other changes include processing more car rentals (26%) and increased use of low-cost carriers (22%).