B2B Payments

What Business Travel Optimism Means To B2B Companies

Across the globe, more travel buyers are becoming increasingly optimistic about business travel, according to a recent report. This means longer trips and higher travel spend budgets for many firms. But where is all of this optimism coming from, and is it going to last? PYMNTS.com takes a closer look.

When business travel increases, it is likely good news for companies. Recent research shows that across the globe, travel buyers are more optimistic about business travel. The biggest cause of this optimism? Stronger economies. But how optimistic are travel managers, and do they expect this increased business travel spend to be a regular aspect of their organizations? 

According to AirPlus International’s third annual Trend Letter, companies expecting a positive outlook on business travel increased by 5 percent to 17 percent. Additionally, 23 percent expect more frequent business trips, while 18 percent expected that in September.

AirPlus interviewed 1,500 travel managers worldwide for their views on how the current economic situation will affect business travel for their organization. The company first asked this question in September 2013 and repeated in then again in February 2014 before the Crimean Crisis had escalated, according to the report.

In the most recent findings, 45 percent of respondents said they expect longer business trips, compared to 35 percent in September 2013.

“More than one-third of the optimistic travel managers anticipate the relaxing of the travel guidelines in their own organization, as well as higher individual travel budgets,” the report said.

However, the findings also showed that 82 percent of respondents perceived that the economic situation will have a negative impact on business travel. Of those travel managers, 82 percent cited reduced travel activity as a consequence and 68 percent said that tighter travel guidelines would occur.

“Almost half of the surveyed travel managers connect the negative effects with a decline in trip length,” the report said. “Only 3 percent associate the negative effect with an entire discontinuation of travel. A complete termination of travels is generally used in very few companies, and distinctly fewer than in September 2013.”

This same travel optimism can also be seen in the increase in travel spend in developing countries. Earlier this week, PYMNTS.com reported on findings from Carlson Wagonlit Travel (CWT) and the Global Business Travel Association (GBTA) that showed Russia will have the highest percentage increase in business travel spend in 2015 compared with other countries in Europe, the Middle East and Africa.

“Growth will be led by expansion in emerging markets such as China, India, and Brazil,” the report said. “Advanced economies will also strongly contribute as economic growth improves and pent-up demand is released. Meanwhile, muted advances in travel supply will begin to put upward pressure on rates, particularly in high-demand travel markets.”

However, the report also stated that economic issues could have an effect on business travel spend – just like the AirPlus study found. According to the CWT and GBTA research, the high growth potential is offset by the risk of further turmoil in the Ukraine and economic sanctions against Russia, which would be detrimental to travel demand and air prices in the region.

Even so, neither study reported that business travel would stop entirely because of economic issues. With that in mind, global travel buyers need to keep themselves updated on economic situations across the globe so they can make the right spend decisions for their business.

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