Cost Outstrips Geopolitical, Health Issues for Business Travelers
LONDON; June 17, 2003 – The economy remains a major concern for business travelers and may be limiting the travel industry’s ability to raise prices, but business travel shows signs of growth, according to a survey of U.K. business travelers released today by Accenture.
When asked which factors will have an impact on their business travel plans over the next six months, 43 percent of respondents selected the economy, versus 20 percent who selected geopolitical issues and 16 percent who selected health issues, including SARS. Nevertheless, four out of five respondents (83 percent) report that they expect their business travel to increase or remain at the same level over the next six months.
That travel will bring business people to a variety of locations. Almost three-quarters of the respondents plan to travel within the UK (74 percent), followed by continental Europe, the U.S. and Asia-Pacific (61 percent, 33 percent and 24 percent, respectively). For travel within the UK, 49 percent will use an automobile, 31 percent will use air travel and 19 percent will travel by rail.
When these business travelers make their plans, cost figures prominently:
More than half (57 percent) of respondents said they have used low cost carriers for business trips in the last six months. Of that group, two out of three (63 percent) said that their use of these carriers will either increase or stay the same (21 percent and 42 percent, respectively) in the next six months.
- Two-thirds of all respondents (66 percent) reported that they use mid-range hotels (55 percent) or budget hotels (11 percent) for their business travel
- Only 35 percent of the respondents reported that their companies had placed no restrictions on business travel. The most cited travel restrictions included limiting the choice of airlines and hotels to preferred or low cost options, and restricting reservation options for business or first class air travel (28 percent, 25 percent, respectively).
- Respondents identified proximity to business activity and price as the top two requirements for choosing business accommodations, selected by 73 percent and 72 percent, respectively.
“While it’s good news that we’re going to see an increase in business travel, competition has increased and everyone is vying for the same customers,” says Alex Christou, a partner in Accenture’s Transportation & Travel Services industry group. “Hotels, air and rail carriers must not only keep their prices competitive, but they must differentiate themselves by offering superb customer service based on long-term, personalized relationships.”
Despite the emphasis on price, the survey results indicate that services and reputation are significant factors when it comes to making business travel arrangements:
One-third of respondents (34 percent) cited brand/reputation of the hotel as important.
- Forty-five percent said that past negative/positive experience and 39 percent said service from staff influences their hotel decision.
- More than one in three (37 percent) cited Internet access as a “must have” in their choice of business accommodations.
- Almost one half of respondents (47 percent) said they now book their business travel online.
- Forty-six percent of respondents reported that loyalty program affect their choice of hotel or airline. Of those who said loyalty programs have no influence on their travel decision, 28 percent work for companies that limit the choice of airline and hotel to preferred or low cost options.
The survey, fielded in June 2003, entailed querying 322 business travelers at UK-based companies. The multiple-choice survey was conducted online and has a margin of error of +/- 5 percent.
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.