German companies have become increasingly reluctant to travel in the wake of the Iran war and ongoing Middle East conflict, according to research by German business travel association VDR.
VDR conducted a straw poll of 78 corporate members between 29 April and 15 May and found 44 per cent are now “acting more cautiously” than they were at the beginning of the year, when the association released its annual Business Travel Analysis report.
Heightened awareness of geopolitical and economic risks was highlighted in VDR’s previous analysis, which surveyed some 800 travel managers between January and February. Before the escalation of conflict in Iran, 62 per cent of respondents anticipated an increase in business travel volumes this year, while only 4 per cent expected a decline.
In the most recent survey, however, 32 per cent of corporates now expect to reduce their travel activity. A further 28 per cent expect travel volumes to remain steady and on par with expectations from the beginning of the year, while 33 per cent anticipate travel volumes to increase by between 5 and 10 per cent.
Of those 78 companies recently surveyed, 82 per cent employ more than 1,500 people and more than half generate annual revenues exceeding €1 billion, with travel budgets greater than €50 million.
VDR president Christoph Carnier said: “Companies continue to plan their travel responsibly and with a view to economic necessities. However, feedback clearly shows that uncertainty is growing – not due to a lack of business activity, but because of external factors such as providers' pricing strategies, geopolitical risks and supply bottlenecks in air traffic. These factors… [together with] short-term disruptions such as flight cancellations or strikes, are noticeably making planning more difficult for many companies.”
The research indicated travel managers are most concerned about price increases (59 per cent), geopolitical uncertainty (47 per cent), and managing tighter budgets (44 per cent).
Other factors contributing to a decline in business travel include safety and health concerns (32 per cent), increased adoption of virtual meeting platforms (27 per cent), and the preference for combining several appointments into a single trip (26 per cent).