The travel industry is reeling from the economic recession, but few segments are as challenged as corporate travel. Amid double-digit declines in traveller demand and revenue, the corporate travel landscape is undergoing a major realignment. Corporations are pulling back across the board and all players – from airlines to hotels to travel management companies – are under pressure.
Recessionary trends are driving a steep contraction in business travel in 2009, resulting in a 15% decline in the U.S. corporate travel market to USD 85 billion according to PhoCusWright’s U.S. Corporate Travel Distribution Fourth Edition. In contrast, the total U.S. travel market is projected to decline only 11% in 2009, dipping below 2006 levels. While corporate travel has historically comprised approximately 40% of the total travel market, this share will decrease as the fall-off in corporate travel demand far outpaces the decline in leisure/unmanaged business travel. Corporate travel share of the total travel market will drop markedly from 39% in 2007 to 35% in 2010.
“Current economic challenges and public scrutiny of travel and entertainment spending has placed corporate travel on the chopping block. Sharply curtailed corporate travel budgets will mean not only less travel in 2009, but stricter policies and tougher policing when spending does occur,” said Susan Steinbrink, PhoCusWright’s senior research and corporate market analyst. “However, the recession will positively affect innovation, as corporations and travel management companies intensify efforts to optimize travel programs. This means bringing more spend under management, accelerating integration efforts across the corporate travel value chain, and leveraging new technologies—from mobile to video conferencing—to bolster the bottom line.”
PhoCusWright’s Corporate Travel Distribution Fourth Edition report is available now at www.phocuswright.com for an introductory price of USD 995 (a USD 1295 value) through 15 August. Report purchases include the recording and presentation deck from the 29 July Webinar, The Changing Face of Corporate Travel. Order today to save USD 300 off the regular report price.
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Source: HSMAI econnect