BUSINESS TRAVEL - It's good to talk - face to face
Technophiles have been arguing for years that technology will eliminate the need for business travel. However, all the signs are that despite innovations such as teleconferencing, videoconferecing and e-mail, there is no substitute for face-to-face negotiations.
In fact, the demand for business class travel and accommodation is growing.
Over half of UK corporate travellers (57%) predict an increase in the volume of business travel in future, according to a survey by Travel Research Centre.
This demand is continuing to drive up the cost of business travel. According to the latest American Express European Business Travel Index, business class air fares in Europe are up by 7% over the previous year, rising faster than economy and excursion fares. The news is even worse for long-haul flights. If you’re flying to North America, the Far East or Australia you can expect to pay at least 10% more than you might have last year.
This trend is reflected in accommodation, too. Of all the cities monitored, hotels in Bombay and Chicago have raised their rates the most, growing by 25% year-on-year. Staying in Hong Kong, Edinburgh and Milan is also becoming more expensive, with rates increasing by 17%, 16% and 13% respectively.
All of this makes grim reading for financial directors who are under pressure to control costs. In this review, we look at developments in business travel that aim to relieve that pressure – or at least manage it. The four sectors covered are: travel management, corporate cards, air travel and hotels.
In the travel management section, Financial Director talks to Jonathan Stobart, director of finance for global travel management at Seagram, tells how he’s saving $15m by reigning in control over business travel expenditure.
The second section looks at how corporate cards are being used to pay for business travel, enabling companies to control expenditure and reduce administration.
Finally, we examine how airlines and hotels are offering more services aimed at business travellers. Whether they are worth it is another question altogether. The benefits of using no frills carriers and business class apartments are also debated.
With air fares and hotel rates spiralling ever upwards, it is not good enough to leave all arrangements to a business travel agent. Cost-conscious UK companies are implementing travel policies specifically designed to streamline their business travel budgets.