While the vast majority of senior financial executives foresee continuing cuts in business travel budgets, they still plan to invest in revenue-generating travel for their companies, according to a survey of 285 senior finance executives worldwide released today by American Express and CFO Research Services.
The survey reported that 87 percent of the executives said their companies would spend less on business travel this year compared with last year, and 44 percent said their travel budgets would decrease by 10 percent or more. Few said the travel cuts would be across the board, however. About two-thirds of the executives said they would maintain or increase levels of travel for meetings with existing clients, and even more—82 percent—said they would maintain or increase travel for the purpose of winning new clients or business development.
"The bottom line is that people still have to meet with customers," said Wendy Prewitt, vice president of global business development for the global client group at American Express. "Overall spending will go down, but companies right now are investing for the future."
The study detailed a number of methods the executives are using to cut travel and travel costs: reducing the number of travelers and having those who travel update the others when they return, raising the level of management approval required to travel internationally, using data to track return on investment of customer entertainment by sales forces and monthly reporting to senior management on travel spending metrics. However, the executives said travel remained a critical cog in their business.
"Our company is very much a people business, and you occasionally do more than just pick up the phone or send them an e-mail," a CFO of a Canada-based beverage manufacturer said in the report. "When you're talking to somebody face-to-face, giving them encouragement, supporting them and in the face of what can be a very demoralizing situation, we believe that is quite powerful."
Source: Business Travel News