Thursday, 27 September 2012

Growth of Business Trips Stable But Early Signs of a Possible Slowdown

-  71% respondents claim that their air travel for domestic & international business trips has stayed unchanged or increased in 2012

 -    59% respondents acknowledged that their company has introduced some form of travel cost reduction measures

Resonating the global sentiment, the annual India Business Travel Survey by TripAdvisor®, the world's largest travel site, reports a mixed outlook for business travel for 2012. The survey was taken by over 1300 respondents with a cross section working in government, public sector, private companies, multinationals as well as self employed.  While the survey results suggest that growth in business travel in 2012 has been confident in the face of softening economic growth, it also reveals that companies are slowly but surely becoming conscientious and watchful of their travel expenses, which could be symptomatic of an imminent slowdown.

Domestic business trips in 2012 have increased or stayed the same for 67% respondents with a decline for 33%. Even international business trips have increased for 40% respondents and remained unchanged for 28% with a fall in foreign travel for 32%. While both these numbers show that for majority of respondents, work related travel has been stable or shown an increase, but close to one-third of travellers who have witnessed a fall in their business trips from 2011 cannot be ignored.

“While overall business travel has been strong and stable despite the current economic environment, there are signs of a potential impact on travel frequency and cost.  Survey results show over one-third of respondents confirming a decline in work trips this year from 2011, along with organizations growing careful and vigilant of their travel spends” said Nikhil Ganju, Country Manager, TripAdvisor India.

He further added, “59% respondents acknowledged that their company has introduced some form of travel cost reduction measures like lowering grade of airline travel or fall in the average room night allowance. In fact 35% respondents among those who saw a drop in business trips in 2012 attributed it to cost cutting travel policies put in place by their organization.”

Cost Cutting Plays Spoilsport!

Travel privileges/allowances see a downgrade for a sizeable number of business travellers.

  • 21% respondents who were flying business/first class for most trips in 2011 had to fly economy on most or some work trips in 2012; only 3% saw an upgrade in class of travel this year compared to 2011
  • 24% confirmed that their number of nights per work trip have reduced compared to 2011 and  16% cited increase in number of times they avoid staying overnight in a city and instead fly back same day, both owing to company travel policy cost cutting.
  • Over 70% saw no change in class of hotel stay whereas 18% had to stay in a lower star rated hotel or even switched from a hotel to a guest-house for some or most  work trips in 2012, as compared to 2011 due to company’s cost cutting policies
  • 51% respondents revealed a change in their company’s internal offsite plan for 2012 due to cost cutting by:  
                                    o     Taking lesser employees - 13%
o    Reducing duration of offsite - 11%
o    Cancelling an offsite – 10%
o    Changing international offsite to domestic  destination - 9%
         o    Opting for lower star rated hotel/resort  - 8%        
  • 59% respondents acknowledged that their company  introduced some form of travel cost reduction measures, such as: 
         o    Recommending use of remote meeting tools – 42%
o    Lowered grade of airline travel – 17%
o    Lowered average room night allowance – 15%
o    Recommending use of public transport instead of cabs – 14%
o    Reduce daily cash allowance – 9%

Emergence of remote meeting tools
Remote meeting tools seem to be gaining widespread acceptance in India. Among those who saw a decline in      their business travel between 2011 and 2012, a good 46% respondents said that their business travel requirements have been reducing in general due to remote meeting tools. In another question, 42% respondents said their company has been recommending more use of remote meeting tools as a measure of travel cost reduction.

Extra Work but Still Welcome

Despite half of the respondents agreeing that travelling for work means longer working hours, 65% respondents said that business travel is a break from usual office grind. 31% respondents even called it ‘fun’. Surprisingly, a higher percentage of male respondents said they found travel stressful or disrupting compared to female respondents.

Business Travellers’ Favourites & Wish list 

  • Jet Airways emerged as the Numero Uno choice for business travellers with 46% respondents voting for it as their favourite domestic airline, followed by Indigo (30%). Kingfisher Airlines, Spice Jet and Air India were all tied for 3rd spot at 7% each.
  • Emirates surpassed all other carriers by a large margin with 20% respondents claiming it to be their preferred international airline for business travel, followed by Singapore Airlines (9%) and Lufthansa (8%).
  •  When quizzed on their favourite business hotel, 32% respondents did not show a preference for any hotel chain, while 11% said they have to stay mandatorily in hotels their company has a loyalty tie up with. Among the remaining respondents, 11% voted for Taj as a favourite followed by ITC Hotels (5%) and JW Marriot (4%).
  • When travelling for work, the three  factors most important to travellers in choosing a hotel  are: 
         o    Location near business meeting/conference venue -  70%
o    Room rate - 52%
o    Free breakfast – 49%
  • 45% respondents also claimed high speed internet/Wi-Fi to be an important factor when choosing a business hotel. In fact, 99% respondents voted in favour of business hotels offering free hi speed internet/Wi-Fi to guests.

Other Travel Nuggets

  • Online catches up  - 38% respondents said they book their flight and hotel tickets online followed by 37% who use company travel desk/agent for making bookings
  • Breaking the stereotype , only 38% women said they miss family on a work trip as compared to 63% men 

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