Low-Cost Options Continue to Drive Business Travel Decisions
A majority (59 percent) of respondents said they have used low-cost carriers for business trips in the last six months, and two-thirds (65 percent) reported that their use of these carriers will either increase or stay the same (19 percent and 46 percent, respectively) in the next six months. While the majority (75 percent) said they would stay at mid-range hotels, 13 percent indicated they will stay at budget chain hotels (and 4 percent indicated they would choose luxury chain hotels.
Three quarters of business travelers (76 percent) said they expect their business travel to increase or remain at the same level during the next six months, but 41 percent identified budgetary concerns as the most important factor in their business travel planning. This was followed by the economy, selected as the most important factor by 34 percent which is down from 47 percent since Accenture conducted an identical survey in June 2003. Respondents also cited geopolitical issues (13 percent) and health issues (9 percent), including SARS and recent flu warnings, as additional concerns.
"The good news is that we're witnessing a continued recovery in business travel," says Julian Sparkes, a partner in Accenture's Transportation & Travel Services industry group. "However, business travelers are migrating quickly toward hotels and air carriers that provide the best value. Going forward, the focus will be on alternatives that can provide the best value on price and service, particularly as competition intensifies as upstarts strive to upend entrenched brands."
The survey findings reflect a number of changes in business travel:
-- Flying low, but sleeping high: Nearly one quarter (22 percent) of business travelers at companies with more than $1 billion in annual revenue said they plan to increase their use of low-cost carriers - an increase from 15 percent since June - but 7 percent of travelers at those companies said they also plan to use luxury chain hotels - up from 3 percent six months ago.
-- Travel restrictions: Fewer than half (44 percent) of travelers said their companies are not restricting travel. However, teleconference and videoconference continue to be the top alternatives to travel, used by 27 percent of respondents, and nearly one quarter of those surveyed reported that their companies continue to restrict first-class travel (21 percent) and limit airline and hotel choices (22 percent).
-- Price, brand and location: Respondents identified proximity to business activity and price as the top two requirements for choosing a hotel, selected by 73 percent and 71 percent, respectively. Half of respondents (48 percent) said that brand and reputation are critical requirements for choosing a hotel. Nineteen percent of travelers said they expect to fly overseas in the next six months, down from 26 percent in June, while respondents said the top five U.S. destinations for business travel in the next six months are Chicago, New York, Washington, D.C., Los Angeles and Atlanta.
-- Online bookings: More than half (61 percent) of respondents said they book their business travel online. While half (51 percent) of respondents at large companies said they continue to use internal resources to book travel, down from 66 percent six months ago. The use of independent online travel services at large companies has also increased to 15 percent, up from 6 percent from June.
The survey also identified customer relationships as an area of growth and opportunity in the travel industries. That is, 42 percent of respondents said that past negative/positive experience influences their hotel decisions, and a majority (69 percent) reported that hotel reward or frequent flyer programs influence their travel decisions.
The survey, fielded from Nov. 24 to Dec. 2, 2003, entailed querying 549 business travelers at US-based companies. The multiple-choice survey was conducted online and has a margin of error of +/- 3 percent.
Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills, and technologies to help clients improve their performance. With more than 83,000 people in 48 countries, the company generated net revenues of US$11.8 billion for the fiscal year ended Aug. 31, 2003. Its home page is www.accenture.com.
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