Over three quarters (78%) of staff are more conscious of their own business travel costs than before the recession, according to a new study from American Express Business Travel’s aXcent service, a bespoke local service for mid-sized companies helping to control and drive savings in travel spend.
The study, of over 500 business executives at mid-sized UK companies, reveals the latest ‘New Normal’ in UK business travel spend and will be included in the aXcent UK Business Travel Best Practice Report released later this month.
Along with a heightened awareness of costs, six out of 10 staff (62%) stated they are motivated to cut their own business travel expenses as a result of the travel habits of their peers, and this isn’t just colleagues but many bosses are leading by example too. 46% of staff saying their bosses practice what they preach when it comes to cutting business travel costs. Examples include bosses downgrading flights from business class, taking the train rather than flying, and even publishing their expenses to employees.
More than four out of ten firms (45%) have asked staff for their ideas on how they could save business travel costs and improve efficiencies.
Tightened policies to continue
When asked how long UK plc’s see the tightened ‘age of austerity’ of business travel policies continuing, the majority (33%) of Managing Director’s, financial decision-makers and procurement teams believe it will be for the next two years. Nearly one quarter (24%) of respondents believe the measures now in place will continue to be the blueprint for the future.
Only 12% of respondents believe the age of austerity business travel policies will come to an end in a year and 19% see it continuing for 3 years.
“Many UK employees and employers are clearly working together to achieve return on investment for their travel, and have developed a much more frugal mindset to help them through the downturn. However, with nearly one third of firms (32%) allowing their employees to book their own travel and hotels in an unmanaged manner, potentially resulting in a lack of visibility and control over the spend, and only 11% of those surveyed using a travel management company, many UK companies are still missing out on potential savings.” said Michael Rouse, Vice President & General Manager, Head of Client Acquisitions, American Express Business Travel EMEA.
A Business Essential for UK plc’s
Austerity measures have not resulted in blanket travel bans for UK firms. In fact, over half (54%) are still travelling the same amount as in the boom times (2002 – 2007) while 4% are now travelling more. Business Travellers reported that they increasingly used public transport (31%), flights in premium economy (25%) and on high speed rail (18%) to keep on the road while keeping down. According to respondents, the reasons for travelling more frequently include new business, meeting existing clients and an increase in mergers and acquisitions, resulting in senior staff travelling more.
Of firms that changed their business travel to save costs, nearly half (47%) have saved up to 20% of their annual travel budget, over a fifth (22%) have saved between 21% and 30%. When asked about how this translates to financial savings, over a third (36%) of firms have saved up to £50,000 per annum.
The top five business travel cost cutting measures firms have implemented include:
- Offering staff more video conference (eg. Telepresence) and telephone conference facilities (62%)
- Asking staff to take public transport rather than taxis (46%)
- Removing business and first-class travel for flights under a certain number of hours (42%)
- Downgrading hotel choices eg. From four to three star (38%)
- Flying one way in economy but the other in business so employees are refreshed and ready for meetings (14%)
Michael adds, ‘Taking advantage of best practice advice through services such as aXcent, ensuring there is rigorous policy and control of the program, and leveraging negotiated rates, will help UK companies to continue to drive the best value from their travel programs even when there are. Companies should not forget that as the economy recovers so prices on core travel commodities such as air and hotel rates are likely to rise.’