Canada’s Biz Travel Is Picking Up

An increase in business travel spending last year – and the expectation of larger corporate travel budgets for 2014 – were among key findings of a recent Canadian Business Travel Outlook 2014 report.

Prepared by the Conference Board of Canada and the Association of Corporate Travel Executives, the report surveyed a total of 73 public and private companies and organizations with an estimated aggregate domestic travel budget of more than $820 million.

The majority of corporate travel managers said their companies increased or maintained their travel spend last year, with the largest increase coming from domestic and trans-border air fares, followed closely by hotel spend.

Forty-three percent of respondents said they expected business travel volume to increase in 2014. Nearly half of them predicted growth rates of 5% to 10%, while 17% predicted growth rates of 10% or more.

Projected 2014 budgets
In terms of projected corporate business travel budgets for this year, the respondents’ answers suggested an increase of 2.2%. That’s up from 1.6% budget increase forecast in last year’s survey.

Respondents cited several reasons for the projected increase in travel budgets – more domestic trips, higher travel prices and reduced use of travel alternatives such as videoconferencing.

Loosening up?
That last reason for projected budget increases – reduced use by businesses of travel alternatives – was the report’s biggest surprise to Monica Hailstone, regional director ACTE Canada. “Last year no one chose this as a reason for increased spend.

“With so many restrictions on travel in the past few years, perhaps we are seeing some loosening up. And I feel there’s likely pent-up demand for business people to meet face to face,” she said.

Still, the modest growth expectations of travel budgets indicate that corporate travel executives “will remain under pressure to contain costs and ensure that average spending per trip does not escalate much,” said Greg Hermus, associate director of the Canadian Tourism Research Institute for the Conference Board of Canada.

Price forecast
Business travel prices are expected to rise in several areas, according to those surveyed. Here are the findings:

•    51% expect hotel rates to rise 2% to 4%.
•    21% expect hotel rates to rise 4% to 6%.
•    Domestic air fares will rise 1.9%, on average; trans-border fares, 2.4%; and other international fares, 2.7%
•    70% expect car rental rates to remain unchanged.

Policy compliance improving
When it comes to policy compliance by their company’s travelers, 17% said they were “very satisfied,” 69% “satisfied” and 14% “dissatisfied.” Not one person reported that they were “very dissatisfied.”

Improvement in compliance levels was reported by 55% of those surveyed.

Fully two-thirds (66%) predicted that compliance levels will increase in the future.

Technology trends
The survey found that 38% of respondents’ companies support or provide business travel apps for mobile devices, while another 19% are looking into it.  

The report also found that the use of social media by companies to communicate with their travelers on the road is up seven percentage points, from 9% in 2012 to 16% last year. Another 9% said they were considering using social media for internal communications.
 
“The evolution of technology into the traditional travel program is well underway and creates room for innovation,” said Hailstone.

Smart data
The report’s findings in the realm of technology support what ACTE Canada has been seeing and hearing around the world about business travel, she commented.

She cited what she called the “key trend” of “turning Big Data generated by travelers into ‘smart data’ – data that can be more easily translated by travel managers.”

ACTE Canada is addressing the data issue by making it one of the four pillars of its educational focus in 2014, she said.

Meetings management
In the realm of meetings management, corporate travel managers reported that they have the most influence in the areas of contracting, reporting and payment solutions and data consolidation.

They said they had least influence in the area of meetings management technology.