Business travel set for stability: ACTE

January 27, 2010
by Purchasingb2b Staff

The economy may be in recovery mode and airport security may be at an all-time high, but those factors aren’t causing Canadian companies to quash corporate travel plans.

This is a key takeaway from the third annual Canadian Business Outlook Travel Survey conducted by the Association of Corporate Travel Executives (ACTE), the results of which were recently released.

In collaboration with the Conference Board of Canada, the ACTE surveyed respondents from 44 companies, representing some $400 million in travel expenditures.

A total of 63 percent of respondents indicated that they expect to spend either the same or more on business travel in 2010 than they did in 2009. This represents an improvement over dramatic reductions implemented last year.

Part of the reason for this could be low prices. The survey reveals that it is currently a buyer’s market for purchasers of business travel services. Domestic corporate hotel rates are expected to decrease slightly in 2010, while car rental rates will stay close to 2009 levels.

By contrast, corporate airfares are expected to increase slightly, by two percent for domestic flights, 1.3 percent for trans-border flights and 1.6 percent for international flights.

Still below pre-recession levels

While the outlook is promising, business travel remains far below pre-recession levels. The survey reports that demand has softened substantially since the fall of 2008, and some Canadian companies are still anticipating reductions in travel spend. In particular, many respondents reported concern over the cost of air travel.

Those respondents who plan to decrease their travel spend in 2010 cite two main reasons: the state of the economy and the rise of electronic alternatives to travel, such as videoconferencing.

Annemarie Reininger, director of the BottomLine Group and the ACTE’s Canadian board representative, provided some perspective on the trends revealed in the survey.

“While more than a third of travel managers are looking to make substantial reductions in travel spending for 2010, [it’s] clear that the majority are positioning their companies to take advantage of new opportunities as the economy recovers,” she said.