The drop in oil and fuel prices this month has given many hope of leveled costs. Some airlines have even begun to reduce their fuel surcharge fees. However, as the global economy continues to decelerate, corporate travel managers continue to prepare for higher costs and are finding resourceful ways to keep business travelers on the road.

Recent NBTA surveys of 320 travel managers show that the overall cost for a domestic trip has increased by $140 to $175. International trips have increased by $315 to $400. To manage the significant increase and expectation of continued hikes, most travel managers are responding with cost cutting measures across the board.

“Travel managers are getting more creative in today’s volatile economy,” said NBTA President & CEO Kevin Maguire. “They are more than ever reaching out for industry expertise and sharing cost-cutting tactics with colleagues across the globe.”

One survey respondent said, “My management is strongly focused on me staying on top of the latest trends and recognizing what other organizations are doing in this economic downturn.”

NBTA research, which estimates that domestic and international airfares have increased between 11 and 13 percent over the past year, lists the top five measures corporate travel managers are taking to contain air travel costs:

1. Emphasizing advance purchase of air tickets
2. Encouraging or requiring less air travel
3. Sending fewer employees to conferences
4. Strengthening mandates/enforcement of travel policies
5. Driving people to travel alternatives (e.g. web-based meetings) 

Many travel managers are concerned about the reintroduction by airlines of minimum-stay requirements, such as the Saturday-night-stay. Eighty-three percent of survey respondents believe these requirements will have an impact on their travel budgets, and 57 percent consider it to be a major impact. While there are loopholes to circumvent these new requirements, 80 percent of respondents choose not to use them, calling them unethical and too risky. Twenty-two of those 80 percent will encourage travelers to stay over if the fare difference is greater than hotel and meal costs. 

The new airline fees introduced this year are also weighing heavily on travel budgets, and most travel managers feel these fees are misleading. Sixty-six percent are already measuring the impact of the fees on their travel spend, and 70 percent plan to negotiate on the fees during their next RFP process. “We’ve just had to deal with the increase and consider it a cost of doing business,” said one travel manager.

Despite the recent decrease in fuel costs, companies are aware that market and industry fluctuation is very possible in today’s uncertain economy, and therefore ground transportation costs must continue to be contained. NBTA research lists the top five measure corporate travel managers are taking to cut ground transportation costs:

1. Refueling before returning car rental
2. Sharing ground transportation costs with other employees
3. Moving to smaller, less expensive car rentals
4. Renting more fuel efficient cars (non-hybrids)
5. Using more public transportation when traveling

Some companies are looking to the individual business traveler, encouraging them to be more aware of spending. One respondent said, “We are increasing travelers’ awareness of ‘Smart Traveling,’ targeting the right days to travel, the right size hotels and the right car requirements.”

Additional measures travel mangers are taking to contain costs include:

• Moving to more coach-class air travel. Measures may include:
  • Eliminating premium-class on domestic trips
  • Tightening restrictions for premium-class on international trips (for example, increasing the minimum length of a flight for premium-class)
  • Offering cash incentives to those who choose economy over business or first
• Increasing use of online booking tools
• Bidding contracts/reducing #s of preferred suppliers
• Moving to lower-priced hotels
• More day trips (no hotel stay)
• Encouraging travelers to combine multiple trips into one
• Negotiating new airline deals for key city-pairs, sometimes with flat rates (instead of, or in addition to, more traditional network-wide deals with discounts)
• Negotiating rental car fuel surcharges, refueling costs, and other additional fees
• Examining relative costs of various modes of ground transportation, and adjusting policy accordingly (e.g., Is it cheaper for shorter trips to pay for airport parking than roundtrip cab or black car to/from the airport? Is it cheaper for some trips to use cabs locally in destination rather than renting a car? Does hotel offer airport shuttle? Is viable public transportation available?)
• Offering incentives for employees who take travel savings (e.g., cash incentive for taking coach when travel policy allows for business class)
• Implementing strategic meetings management programs