International Business Travellers Sacrificing comfort for low prices new American Express Survey Shows

What is wrong with this picture? Inside an airplane, a man in a tailored suit, gold cufflinks gleaming and leather briefcase at his side, readies himself for a long international flight. But the impressive image ends there. On this flight, he travels in economy, where he'll likely sit with a row of tourists and drink wine from a plastic cup.

It may not fit with the perception many have of a comfort-loving, time zone-crossing business traveler, but a new American Express poll of 800 business travelers from eight markets reveals that travelers are more interested in saving money than seeking comfort while on the road doing company business.

In the survey, a majority of respondents indicated that, in 2004, they will book more economy fares than at present. At the same time, a majority indicated they will not book more travel in first- or business-class. Significant numbers of travelers around the world also plan to book further in advance of their trips and use leisure-style nonrefundable airfares to pare costs.

Nonetheless, international business travelers are set to travel more in the coming year as they aim to balance thrift with convenience.

"Our new survey reveals that international business travelers are firmly behind their companies' cost-control efforts," said Pam Arway, Executive Vice President and General Manager, American Express Corporate Travel, North America. "Because of the long hours they spend traveling, international business travelers have traditionally been more focused than other travelers on comfort, for example, first-class airplane seats. But, with the economic slump, business travelers have become more price-sensitive, and that focus is likely to continue even as they increase their travel."

More Travel in 2004 

The American Express International Business Traveler Survey polled 100 business travelers each from eight markets: Australia, Mainland China, France, Germany, Hong Kong, Mexico, the UK and the US.

In the survey, respondents indicated that they expect their business travel volume to pick up next year.

Compared to this year, more than 37% of travelers expect the number of trips to increase in the coming year. Of that total, over 10% think their travel will jump significantly. Meanwhile, nearly half (47%) predict trip levels will remain the same. Only about 12% think travel will decrease by varying degrees, and a smaller number (4%) are unsure.

Over half of Chinese (53%) respondents, the highest proportion of all polled, see higher levels of travel ahead next year, most likely reflecting a recovery in travel levels from a drop-off this year due to the Severe Acute Respiratory Syndrome (SARS) health crisis. In contrast, the British are more apt to keep travel levels even with this year: with only 27% saying they foresee increased trips.

Further, about 55% are planning more international trips next year, while nearly 41% said there will be no increase. Fewer than 5% were unsure.  Business travelers' upbeat travel predictions for 2004 contrast with many respondents' current travel patterns. More than 27% polled said the number of trips they took during the past 12 months declined from the previous year - prompted largely by global crises.

Among those who traveled less, about 35% cited "fewer business reasons to travel." However, collectively, an equal proportion said that the SARS health crisis and the combined effects of terrorism and the war in Iraq were the primary reasons for the drop-off in air travel. More than others, travel levels of residents of Hong Kong, Mainland China, as well as the U.S., were negatively affected by SARS, according to 67%, 55% and 52%, respectively.

Still, about one in five business travelers (21%) polled said that their business travel increased either slightly or significantly over the year-earlier period. Meanwhile, the majority (more than 51%) reported no change.

Cost-Control: The Global Goal

While there will be more trips next year, travelers plan to spend company funds wisely, the new American Express survey indicates.

"Business travelers of every stripe, whether they are senior executives or rank-and-file employees, are under increasing pressure from CFOs and shareholders to save money," said Arway. "To ensure that they will continue to be able to meet with clients, prospects and colleagues, international business travelers realize that they have to cut costs and make travel pay off even more."

Nearly 60% of frequent business travelers around the globe say that in the coming year they'll book more economy-class air tickets than at present, while over 35% will not. About 5% are undecided.

About 31% plan more trips in premium class - either first- or business-class. More significantly, nearly two-thirds (about 64%) of respondents do not expect to book more seats in the front of the plane. A bit over 5% aren't sure.

Additionally, more than one in four business travelers (26.4%) expect to fly more frequently next year on low-cost airlines, while nearly 68% do not and 6% are unsure. Forty percent of Mexicans say they'll travel more on these carriers, followed by significant proportions of respondents from several countries in Europe, where low-cost airlines have grown significantly over the past several years.

Just over one-third of business travelers polled from Britain and Germany plan to fly more on low-cost airlines.

Today's business travelers also see value in booking trips in advance - which, in many markets, can significantly pare the price of a ticket.

About 54% say they expect to book air tickets further in advance of their trips than is their current practice. Meanwhile, nearly 43% said they do not expect to change booking habits. More than 3% are undecided.

Over the past several years, many companies have turned to airlines' nonrefundable airfares, which are leisure-type airfares generally cheaper than business fares, as a way to reduce corporate travel bills. They typically feature advance-booking restrictions and may require minimum stays.

Global business travelers polled were split on whether they'd pursue such fares in the coming year in order to economize - with about 47% saying they would and an equal proportion indicating they would not. About 6% were unsure.

A majority of travelers from Mexico, the UK and the US, 56%, 55% and 53%, respectively, say they will use nonrefundables next year. "Companies in North America continue to take advantage of nonrefundable fares to pare travel bills, especially since major airlines have recently relaxed 'use-it-or-lose-it' rules on those tickets," added Arway. "The savings are just too great to ignore, as business fares there are almost six times the level of leisure fares."

'Oui' to Thrift, 'Nein' to Impracticality

While global business travelers want to save money for their firms, they're not willing to suffer to achieve that end, the survey indicates.

For instance, respondents aren't eager to spend additional time away from home to economize, as 59% said they don't plan to travel on weekends next year in order to save on airfares. Nearly 39% said they would, and 2% were undecided.

Business travelers also want to keep trip times short, the survey says. Almost three-quarters of respondents, 73%, said that, compared to now, they won't book more flights with connections in 2004, often another way to reduce air ticket costs in many markets. About 25% said they would, while 3% were unsure.

Americans were split on the issue of whether to sacrifice weekend time to pare travel bills. However, among all respondents, they (48%) were most willing, while the British (27%) were least in favor of the idea.

 Meanwhile, 77% plan to fly more non-stops than currently, while 20% said there would be no increase, and 3% were undecided.

The Value of Being There

Another finding reveals that travelers value business travel as a tool to maintain and develop customer relationships: asked if business travel is essential to growing a business, more than 89% of respondents agreed, either strongly or slightly. A majority of respondents from each country agreed on some level. 

Only about 6% disagreed to some extent, while about 5% were neutral.

The American Express survey also shows that some business travelers use Web meetings and teleconferencing in place of travel, but the majority clearly consider in-person meetings with clients or business associates superior.

More than 35% say that this year they have used such technology-either frequently or occasionally-instead of traveling. However, a combined 65% say they do not do virtual meetings very much or at all.

Further, asked if teleconferencing or Web facilities offer an adequate substitute to face-to-face meetings, nearly two-thirds (65%) said no, while about 35% differed. Mexican respondents were the only majority (51%) to consider teleconferencing and webcasts equal to being there in person, with those from Hong Kong following closely, at 50%. Meanwhile, Germans were least inclined (16%) to favor technology over personal contact.

Even among those who give equal consideration to virtual meetings and in-person meetings, 75% said that telecommunication is only appropriate for conferring for an hour or less.

Online Booking Helps Keep Costs Down

According to the survey, many international business travelers are booking travel online, including via corporate online booking tools, at least to some extent.

In the survey, 37%, the largest proportion, said that, at least occasionally, they book travel directly via a website-either that of a travel agency, airline or independent booking site. Just over one-third, 35%, said they never book online, while 28% said another person books travel for them.

On a market-by-market basis, a surprisingly high number of travelers said they book online, with 49% of the British, 48% of Germans and 42% of Americans noting they use booking tools at least some of the time. On the opposite end of the spectrum, only 21% from France, 26% of Hong Kong respondents and 28% of other Chinese book travel online, when completing these tasks directly for themselves.

In the survey, respondents said they are attracted to online booking mainly for convenience. About 59% cited this reason - with the French most enthusiastic about this benefit (more than 90%), and Germans least convinced (just over 37%).

Travelers also cite the savings benefit as another enticement. Over 27% polled cited cheaper fares as a benefit. Again, the French, at almost 43%, are the most appreciative of this benefit. But only 14% of Chinese could cite the savings benefit of interactive travel.

When their interactive booking systems offer a low fare, international business travelers grab the savings, the survey says. Over three-quarters (76%) of travelers said they are likely-whether always, often or sometimes-to choose the lowest fare presented by an online tool rather than an itinerary with the most convenient routing. Just over 23% said they'd never make that choice.

According to the survey, respondents from Hong Kong and Australia are the most likely to choose savings over convenience when using an online tool, with about 92% and 85%, respectively, indicating so in the survey. Conversely, 38% of the French and 36% of respondents from other parts of China, were most likely to never choose the lowest online fare over the fare with the best route.

The American Express Survey

The American Express International Business Traveler Survey was conducted by The Practice, an independent market research firm based in London. In the survey, 800 business travelers representing Australia, Mainland China, France, Germany, Hong Kong, Mexico, the UK and the US were interviewed via telephone in August 2003.

In the survey, 100 business travelers from each country participated. On average, participants took about seven business trips during the last 12 months.