CFO survey shows rising travel costs

May 11, 2006 |

A recent survey of financial executives conducted in February, 2006 indicates that nearly 92 percent of respondents plan to spend the same or more on travel, primarily because they are traveling more often, but also due to higher business travel costs this year.

The findings are from a fourth-annual independent survey conducted for the Association of Corporate Travel Executives (ACTE), an organization dedicated to the science of business travel management, and GetThere(R) and Travelocity Business(SM), leading providers of corporate travel solutions and part of Sabre Holdings Corporation.

While “rising air, car and hotel costs” and “getting good value for the money spent on travel” top the list of concerns for financial executives, nearly 68 percent are also worried about the potential for natural disasters and world events to affect their business and the safety of their travelers. And 77 percent are still concerned about their ability to track and locate travelers while on the road, even though the number has dropped from 86 percent in 2005.

“As more business travelers hit the road this year, companies need to understand that there are a lot of proactive measures they can take to prepare—and even avert—the impact of unexpected events on their travelers,” said Greeley Koch, president of ACTE. “ACTE works closely with companies to provide tools and information that enable them to proactively deal with these pressing issues.”

How Financial Executives Keep a Lid on Company Travel Costs

Survey findings show that executives prefer to use a preventative approach when it comes to keeping company travel costs down. Sixty-five percent of executives require that travelers have their itineraries approved before trips are booked, also known as a “Pre-Trip Approval” process. Limiting travel came in as the second way to control costs at 62 percent, but continued to drop in popularity, down 5 percent from 2005, and dropping nearly 16 percent from 2003 survey data.

Use of corporate online booking tools continued to grow as an effective way to cut travel costs, with nearly 48 percent of executives using online booking within their companies, a 5 percent increase over 2005, and up from 31 percent in 2003.

“Online booking continues to gain momentum, not only due to its cost savings benefits, but also because individual business travelers are embracing the online experience,” said Ellen Keszler, president of Corporate Solutions for Sabre Holdings Corporation. “That’s because corporate booking tools have evolved to include the best features from vacation travel sites—with enhancements like improved search options, more descriptions, and better photos.”

Financial Executives Get Good Grades for Their Business Travel Habits

New questions added to this year’s survey reflect the travel habits of financial executives themselves. Results show that while executives are cost conscious travelers, productivity on the road is equally important, if sometimes even more critical. Results include:

-- 72 percent of executives typically fly coach class when traveling domestically

-- Nearly 47 percent book their trips two weeks to one month in advance of their travel date

-- More than 47 percent would be willing to pay extra for in-flight Internet access, with in-flight meals as a second priority at 36 percent

-- 56 percent would choose a direct flight or a flight option that works best for their business schedule over the cheapest airfare

Additional Corporate Travel Management Trends

Other significant trends gained from the survey in regards to corporate travel management include:

-- Online meeting planning is growing in popularity. More than 84 percent are considering the use of online technology to plan and manage corporate meetings, up from 76 percent in 2005.

-- Online agency service is improving. Nearly 62 percent of executives believe that online agencies effectively support business travelers on the road, up from 49 percent in 2005.

-- Financial executives think online agencies offer better deals. More than 82 percent believe online agencies get the best business travel deals, up from 78 percent in 2005.

-- Mandates for online booking continue to rise. More than 84 percent of executives require that some or all company trips be booked online, in the form of full or partial mandates, up from 81 percent in 2005.

Survey Methodology

The proprietary survey was conducted from February 14 - March 10, 2006 for ACTE (Association of Corporate Travel Executives), by GetThere and Travelocity Business, leading providers of corporate travel solutions and part of Sabre Holdings Corporation. Results are based on a poll of BusinessWeek subscribers and were limited to senior executives with financial and procurement responsibilities (CFOs, senior VPs, executive VPs and presidents) that work for companies with more than 1,000 employees. A total of 385 online surveys were completed on a secure Web site, managed by InsightExpress, Inc., an independent market research firm. Three previous surveys were conducted using the same methodology in January 2005, September 2003 and March 2002 for GetThere, Travelocity Business and ACTE.