Near-Term Growth in Business Travel Expected, Despite Global Health, Economic and Political Issues, Accenture Survey Finds

Price Dominates Travel Decisions, but Brand and Reputation are Critical Factors

ATLANTA; June 4, 2003 – Despite global health, economic and geopolitical concerns, business travel shows signs of growth in the United States, according to a survey of more than 1,600 U.S. business travelers released today by Accenture.

Four out of five respondents (81 percent) said they expect their business travel to increase or remain at the same level over the next six months. The survey findings also indicate that the economy is having a greater impact on business travel than are geopolitical or health issues. For instance, when asked which factors will have an impact on their business travel plans over the next six months, 47 percent of respondents selected the economy, versus 16 percent who selected geopolitical issues and 15 percent who selected health issues, including SARS.

Yet, the survey indicates that price remains a major concern for business travelers:

• Low-cost carriers: More than half (60 percent) the respondents said they have used low-cost carriers for business trips in the last six months. Of that group, the vast majority (94 percent) said that their use of these carriers will either increase or stay the same (27 percent and 67 percent, respectively) in the next six months.
• Mid-range/budget hotels: Almost all respondents (93 percent) reported that they will use mid-range hotels (82 percent) or budget hotels (11 percent) for their business travel in the next six months, while only 5 percent said they expect to stay at luxury chain or boutique hotels.
• Travel restrictions: Only 37 percent of the respondents reported that their companies had no restrictions on business travel. The most cited travel restrictions included restricting business or first class air travel options, limiting the use of some luxury hotels, and limiting the choice of airlines and hotels in favor of preferred or low cost options (22 percent, 18 percent and 23 percent, respectively).
• Price and location: Respondents identified proximity to business activity and price as the top two, selected by 76 percent and 74 percent, respectively.

“In a slow economy and an extremely competitive market, everyone is vying for the same customers,” says Julian Sparkes, a partner in Accenture’s Transportation & Travel Services industry group. “Hotels and air carriers must not only keep their prices competitive, but differentiate themselves by offering superb customer service. The survey clearly indicates that the travel industry must better identify high value customers to build personalized relationships.”

Despite the emphasis on price, survey results indicate that brand and reputation, as well as a traveler’s experience, are significant factors when it comes to making business travel arrangements:

• Almost half (49 percent) of respondents cited brand/reputation of the hotel as important.
• Forty-three percent said that past negative/positive experience influences their hotel decisions.
• Four out of five (80 percent) respondents said they consider hotel reward or frequent flyer programs when making their travel decisions

Among other influences, respondents also identified technology as an area of growth and opportunity in the travel industries. For example, more than half (58 percent) of respondents said they book their business travel online, and 44 percent cited Internet access as a “must have” in their choice of business accommodations.

“The choices for business travel are blurring as price, brand and loyalty begin to intersect,” said Sparkes. “Airlines and hotels must make sure their loyalty programs are fully integrated in the way they do business on a daily basis. They should rethink their business models because the future leaders of the travel industry will ultimately be those who are investing today to meet future customer needs.”

Methodology
The survey, fielded in May 2003, entailed querying more than 1,600 business travelers at US-based companies. The multiple-choice survey was conducted online and has a margin of error of +/- 3 percent.

About Accenture
Accenture is the world’s leading management consulting and technology services company. Committed to delivering innovation, Accenture collaborates with its clients to help them realize their visions and create tangible value. With deep industry expertise, broad global resources and proven experience in consulting and outsourcing, Accenture can mobilize the right people, skills, alliances and technologies. With more than 75,000 people in 47 countries, the company generated net revenues of $11.6 billion for the fiscal year ended August 31, 2002. Its home page is www.accenture.com.

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