Are European companies too conservative when it comes to planning their spending on business trips? Each year we tend to see the same phenomenon: the company plans to reduce the amount of travel undertaken by its employees in order to save money. And yet, they end up doing just the opposite. The figures from the American Express Business Travel Barometer prove it: in 2015, European companies’ travel expenditure saw an increase of 1.4%, when a year earlier it had been forecast at +0.7: spending increased twice as much as predicted!
And in 2016, companies foresee an increase of 1%, however, all the economic indicators point towards a change of +2%. Oh the joys of prudence. And this increase in travel is even more noticeable given that prices fell by 1% over this period in Europe and the Middle East. We spend more, prices fall, so volumes increase even more: it makes sense.
Travelling is good for your company
How can we explain these excellent figures? The answer is simple: the growth of business travel reflects the recovery of the economy and the consequent increase in international development projects. This same travel barometer reveals that 50% of companies surveyed were planning to expand their activities by developing internationally in the next three years, compared with 38% in 2014. Here we have some real optimism at work! More good news follows: 33% of companies who responded (up from 18% in 2014) wished to increase their business travel budget over the next three years. All of these elements reflect a profound shift in mentality, one which can be illustrated with a key statistic: 24% of companies see business travel as an investment (and not just an added cost). This is an increase of 7% since 2014, when only 17% of companies thought of travel as an essential element within their business activity.
If we examine travel expenses in more detail, we find that air travel is the highest costing element (42%), followed by hotel costs (26%), train travel (11%), car hire (8%) and food (6%). Although hotel stays were not the most expensive element, 59% of companies surveyed declared that hotel costs should be “closely monitored”.
According to this same study, two key methods were identified to help with these costs: booking trips earlier and taking advantage of online booking tools. This is why more and more of the major players in the hotel business are investing massively in digital services in order to offer travellers simple, turnkey solutions. Much like Accor and its mobile app.
And if you find yourself with some free time between business trips, why not help your company by pondering the question that 21% of European organisations are asking themselves: how can the return on investment of business trips be measured? If you have the answer, there are plenty of people who will be interested to hear it.