Business Travel Show Europe Kick Off, 23 February,
Global Travel Risk Summit Europe, April 2023,
3rd Annual Sustainable Business Travel Summit
The number of trips is rising and there are more overnight stays and a growing number of visits to long haul destinations like the United States and China.But the cost of this travel is falling. The number of trips in 2007 is up 5.6% compared to 2006 but the cost per day of each trip is down 7.4%.The picture the new VDR Business Travel Report Germany 2008 paints is one of a confident industry getting increasingly good value for its money.German business travellers made 166.6m trips in 2007 compared with 157.8m in the previous year. The cost of this travel rose by 2.7% from â‚¬47.4bn in 2006 to â‚¬48.7bn in 2007.But the trend in spending is down. The number of trips since 2004 has risen by 14% but the spend has gone up by only 11%. It means the average cost of a trip is falling. It was â‚¬335 in 2005, â‚¬325 in 2006 and â‚¬316 in 2007.The obvious conclusion is that travel managers and executive secretaries which manage the vast bulk of business travel in Germany are doing a good job. But there are other reasons. One is that senior management is taking a much closer interest. "Managing directors are paying much more attention these days to the topic of travel spend than they did just four years ago."Two out of three corporate boards take a hands on approach to framing travel policy and keeping a watch over travel spend."At the same time, travel managers and executive secretaries are being given increasing responsibility for these tasks. Awareness is thus growing that travel costs are anything but 'peanuts'", the report says.Just who is responsible for managing travel in Germany is interesting. It is senior management in 65% of companies (compared with 56% in 2004), travel managers of travel offices in 29% of firms (27%) and executives secretaries in 22% (16%). Finance also has a growing say (up form 12% to 16%. But the role of both human resources and, more surprisingly, purchasing have a declining say.HR is down from 14% in2004 to 13% now and purchasing from 12% to 11%. With security and corporate social responsibility both growing influences on policy it is unexpected that its role should be shrinking.The reduction in the role of purchasing bucks the trend as in many other countries it is playing an increasingly influential role. Incidentally only 3% of corporates outsourced their travel programme.But back to spend. If German companies are getting better deals on travel how or who is helping them achieve this. The report does not make this crucial question very clear. If fewer companies are leaving travel management to purchasing where negotiators are said to be more hard nosed than travel managers, it can not be there.Intriguingly, German companies are also cutting down the use of agents. Three years ago, 18% of businesses and 50% of organisations in the public sector said they booked trips without any agency help.These figures have since grown to 27% businesses and 55% public sector organisation which do not use a travel agency.Companies and organisation also seem, at least in terms of air reservations, to be paying agencies smaller fees. Average fees for booking domestic flights have fallen from â‚¬25 in 2005 to â‚¬24 in 2008, for European flights from â‚¬29 to â‚¬28 and for long haul from â‚¬38 to â‚¬36. While medium sized companies (with up to 251 to1,500 employees) pay about the same as three years ago, small (up to 250 workers) and large (more than 1,500) companies are generally paying a little less.It may be that the growing use of online booking system is the cause of the reduced travel costs. 53% of companies with a travel spend of at least â‚¬250,000 a year use these systems while a further 38% are in the process of deciding whether to or not. Only 6% have decided against them, possibly because they do not travel much, while, astoundingly, 28% have not thought about it.The report remarks: "The trend seen for the years 2004-2006 of companies comparing prices 'more online' and 'less through a travel agency' continues unabated."But the answer to how are the costs being reduced might well be that more travel managers are being employed."More and more businesses are enlisting the services of travel managers. Corporate managers devote much more attention to this topic than was the case four years ago, with executive secretaries hence becoming more involved in travel management, SMEs contribute disproportionately to this trend. "There are positive developments afoot among the SMEs. The share of travel managers there has grown by fourfold since 2004 (2% to 8%)," the report says.This is a report by a travel managers' association so a conclusion like this is expected. But at the same time, experience suggests that properly managed travel by travel experts is likely to save money.