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European Corporate Travel Spend Expected to Rise by 2.5% in 2017

European Corporate Travel Spend Expected to Rise by 2.5% in 2017

American Express Global Business Travel announced the findings of its European Business Travel Barometer during the 26th annual EVP in Paris. The results of the Barometer – a survey of 982 travel, HR and procurement professionals across Europe – show that travel budgets in Europe grew 1% in 2016. Respondents said they expected to see continued, stronger growth in 2017, with a 2.5% increase in spend anticipated. Growth in travel spend in 2016 was driven by small and mid-size companies, which saw budget increases of 1.8% and 2.1% respectively.

Growth expectations found among survey respondents offer cause for optimism, and indicate that European businesses are generally upbeat about prospects for the year ahead. Geopolitical developments have not dented overall confidence and 67% predicted that Brexit would have no impact on the European business travel market.

Key Findings

  1. Companies increasingly see business travel as a force for growth

The Barometer captures a shifting corporate perception of business travel; most now believe business travel plays a vital role in fulfilling business objectives. Instead of viewing it as a cost, almost half of companies consider travel as a form of investment; this proportion has increased by 28 percentage points in three years.

The trend is strongest in the UK, Germany and Scandinavia: more than three-quarters (76%) of UK companies reported that business travel plays an essential role in facilitating growth. The figure was 54% in Germany and 53% in Scandinavia.

When asked about specific business activities underpinned by business travel, 32% of companies said budgets fund travel to existing marketplaces and retaining customers, while 22% said budgets were allocated against winning new business in new marketplaces. Small companies allocate the largest proportion of their budgets (69%) to developing their customer base.

  1. Traveller safety remains the greatest priority for companies

Last year’s Barometer highlighted a shift towards prioritising traveller safety over cost. Following this year’s survey, traveller safety is again the main concern. In addition, for the first time, productivity and employee satisfaction were rated more important than cost, albeit by a slim margin.

Focus on traveller safety is reflected by the proportion of companies using traveller-locating technology, which now stands at almost two-thirds (64%), up 5% on 2015.

  1. Cost control continues to be an important factor

Although companies are placing greater emphasis on safety, productivity, and employee satisfaction when developing travel programmes, cost control remains a fundamental pillar of managed travel. However, when asked if they still had room to optimise travel expense, almost half (48%) said there was either no scope, or very limited scope, to make savings. This number rises to 56% among small businesses. Consequently, companies are looking at indirect costs – organisational structures and automation – to make savings.

Large companies place greatest emphasis on reducing indirect costs (46% versus 40% of mid-sized companies and 36% of small companies), while a greater proportion of small and mid-size companies believe costs can be optimised by improving traveller comfort and efficiency (20% of small companies and mid-size companies versus 12% of large companies).

Elyes Mrad, American Express GBT’s Managing Director for EMEA, said: “The findings of this year’s Barometer reflect the positivity we are seeing in the marketplace. Businesses are now looking to corporate travel as an investment to support growth objectives rather than treating it as a cost, with small and mid-sized businesses (SMEs) in particular leading the way. This SME sector is the backbone of all European economies; their optimism is good news for entire marketplace.

“Priorities are changing: duty of care and traveller satisfaction are now at the heart of travel programmes. Working together with a travel management company, a company can identify areas for cost-optimisation within their programme, while employing a traveller-centric approach to policy.”

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NEIL STEEDMAN has been a trade journalist, copywriter, editor and proofreader for 50 years, and News & Features Editor for ‘Irish Travel Trade News’ for the past 40 years.

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