Corporate travel budgets to increase for 2013; Hotel industry to benefit

A survey of senior corporate travel buyers commissioned by the Business Travel Show has revealed that budgets are on the increase as we head into 2013 and the hotel sector will be among those benefiting from the cash injection despite buyers continuing to be challenged by the cost of accommodation.

178 industry buyers from across Europe took part in the research, 80 per cent of whom look after £1m+ budgets and 67 per cent of whom have responsibility for more than 500 travellers. The Business Travel Show is Europe’s main exhibition and conference for corporate travel buyers, managers and bookers to source, learn and network. It takes place in London on 5-6 February 2013.

Almost four in ten of the buyers surveyed –37 per cent- expect their corporate travel budgets to increase in 2013 and 38 per cent enjoyed bigger budgets in 2012 compared to 2011. In 2013, nearly half (47 per cent) are expecting to arrange more trips. This year, 45 per cent arranged more trips than in 2011.

When it comes to hotel bookings, just 17 per cent of those buyers will be booking more travellers into lower class hotel rooms in 2013, compared to one quarter in 2012. 12 per cent will be booking fewer travellers into lower class hotels and 63 per cent of buyers’ plans will remain static.

However, accommodation remains a problem category for many corporate travel managers thanks to increasing costs and rogue travellers. The solution is to ‘work strategically with the hotel chains that fit your needs best,’ claims Mette Christensen, Global Head of Travel, A.P. Moller – Morsk A/S.

“Do not jump between different chains just because someone offers you a small discount. Concentrate on your focus destinations where you have sufficient volumes, sign a BAR agreement for the rest and/or buy on your TMC’s corporate rates,” she added.

Jafles Pacheko, Head of Global Travel and Global Commodity Manager for HR and Professional Services, Oerlikon, stressed the importance of monitoring: “We monitor the availability of hotel rates frequently and challenge the hotels with our findings. We also audit the rates in order to check if our so called ‘hotel partners’ are offering us competitive prices. If our contracted rates in a certain property are continuously showing higher than those on Expedia, for example, we will go to the hotel and challenge the value of our business relationship.”

Over 200 corporate travel suppliers will be exhibiting at the Business Travel Show in 2013, including the following companies from the hotel and serviced apartment sector:

The survey responses in full:

Compared to 2011, were your budgets:
Greater 38%
Smaller 28%
The same 30%
Don’t know 3%
In 2013, will your budgets be:
Greater 37%
Smaller 19%
The same 37%
Don’t know 7%
Compared to 2011, how many business trips did you manage?
More 45%
Fewer 30%
The same 23%
Don’t know 2%
In 2013, how many trips will you manage?
More 47%
Fewer 23%
The same 22%
Don’t know 8%
The Business Travel Show takes place on 5-6 February 2013.