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U.S. Corporations Employ New Travel Cost-Saving Measures

Disparities between business and leisure fares noted

PRESS RELEASE - The National Business Travel Association - January 22, 2002

Alexandria, VA (January 22, 2002) - Faced with a slowing economy and rising travel costs, travel managers for U.S. corporations began employing new measures to level out their travel budgets in 2001, and most expect to have to continue these measures this year if the economy does not recover.

In a survey of over 220 travel managers conducted by the National Business Travel Association (NBTA) this month, 74% say they are using new measures to reduce travel expenditures. When asked what areas are targeted for these cost reductions, air expenditures (58%) and hotel purchases (57%) were the two most prevalent areas. Other cost-reduction methods mentioned in the survey included video conferencing, increased use of corporate/charter planes and online booking.

“In these uncertain economic times, American corporations are focused on the bottom line,” said Marianne McInerney, Executive Director of NBTA. “Meeting essential business objectives while keeping travel costs down will be a major priority in 2002.”

In order to trim costs on hotels in 2002, 60% of travel managers said their corporations are reducing non-essential travel, while 52% are reducing the number of meetings held at hotel sites. To reduce air costs, travel managers are booking flights on "discount" airlines (51%), booking flights more than a week ahead (61%), and using alternative airports (43%).

“Last year, we saw many corporations reducing their overall travel,” said McInerney. “In 2002, they are getting back on the road by using more lower-priced travel options. Many corporations are choosing low-fare airlines and discount rather than full-service hotels this year as a way to meet their travel objectives for less money.”

When asked which factors they thought would dramatically increase corporate travel costs in 2002, travel managers listed consolidation in the airline industry (56%), increased disparities in leisure and business fares (46%) and a continued slide in the economy (41%) as trends that would negatively affect travel costs.

Disparities between leisure and business fares are a hot topic for travel managers. 48% noted that discounts introduced by travel suppliers intended to stimulate leisure travel had no visible impact on corporate travel purchases, because continued restrictions make these discounts impractical for business travel. “This is a clear indicator that travel companies' current pricing strategies are not impacting corporate travel decisions,” concluded McInerney.

The National Business Travel Association, established in 1968, represents over 2,400 corporate travel managers and travel service providers. NBTA members manage and direct more than $130 billion of expenditures within the business travel industry. NBTA is committed to the professional development of its members and offers educational and training opportunities. It is the source for critical information on the business travel industry.

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