The number of business travel buyers with flourishing budgets is on the increase for the first time in four years. The results of the seventh annual Business Travel Show forecast reveal that 32% of buyers will have more money to spend in 2017, compared with 29% last year. This follows successive annual drops since 2013. Airline budgets will also rise for 40% of buyers, the highest number for the last three years.
The pressure to cut costs while maintaining quality remains the biggest challenge facing buyers for the second year and may explain the significant increases in the use of low cost and budget airlines, Uber and car rental services, and mid-range and budget hotels (see chart below).
How budgets will compare between 2016 and 2017 including historical research data:
| 17 vs 16 | 16 v 15 | ’15 v ‘14 | 14 v 13 | 13 v 12 | 12 v 11 | |
| Budgets | 32% bigger
21% smaller 47% same |
29% | 32% | 37% | 39% | 39% |
| Airline budgets | 40% greater
15% smaller 45% same |
33% greater
24% smaller 43% same |
33% greater
21% smaller 46% same |
39% greater
37% same 24% same |
||
| Accommodation budgets | 32% greater
14% smaller 54% same |
38% greater
21% smaller 41% the same |
30% greater
27% smaller 43% the same |
30% greater
43% same |
||
| Number of trips managed | More – 48%
Same – 37% Fewer – 15% |
More – 44%
Same – 37% Fewer – 19% |
More – 45%
Same – 41% Fewer – 14% |
More – 48%
Same – 31% Fewer – 22% |
More – 57%
Same – 22% Fewer – 22% |
Airline spend
85% of buyers will have the same or more to spend on airline travel in 2017, compared to 76% last year. Budgets will increase for 40% of buyers, compared to 33% both in 2016 and 2015. Just 15% expect budgets to shrink, compared to 24% in 2016.
- The use of low-cost carriers remains unchanged for the third year running at 86%.
- In 2016, 81% of buyers used low-cost airlines more, compared to 26% in 2015.
- 73% used more budget airlines.
- 38% of buyers booked fewer business class flights, the same as last year.
- 10% have switched carriers because of DCC (distribution cost change).
- 17% have experienced price increases as a direct result of DCC.
- Just 11% agree/strongly agree that DCC has been a good thing.
Accommodation spend
One third of buyers (32%) will have more to spend on accommodation in 2017, and fewer (14% compared to 21%) will have smaller budgets. The use of budget and mid-range hotels rose sharply, with 60% and 87% of buyers increasing their use of suppliers in these markets. While 77% of buyers still do not use Airbnb, 17% did spend more money with them in 2016.
Top issues facing buyers in 2017
38% of buyers expect their total travel costs to rise over the next 12 months and 48% will be planning more trips, which may explain why cutting costs while maintaining quality has retained its spot as the biggest issue facing buyers in 2017. Duty of care has risen moved up the table from fourth to second, while compliance has dropped from second to sixth. Brexit makes its debut at number four, with UK buyers concerned about the impact the strength of sterling will have on prices. Traveller choice and happiness also appear for the first time, and mobile had dropped out completely.
To register to attend the Business Travel Show, which takes place 22-23 February at Olympia London, visit businesstravelshow.com.
