Earlier this month the Conference Board of Canada and The Association of Corporate Travel Executives (ACTE) released their annual co-branded Canadian Business Travel Outlook Report, which takes a look at corporate travel expectations.
The study, now in its 5th year takes a cross section of companies within Canada who have an annual travel budget that exceeds one million dollars.
Three key findings jumped out at me and I wanted to try elaborate and share my opinion about what the impact will be on you if they are indeed accurate.
First, overall business travel budgets are expected to grow 2.5 percent in 2012. Frankly this is somewhat anticlimactic given the expected inflation rate in Canada, according to The Bank of Canada, is also set to jump by 2.5 percent. If we presume both are true, then in actual fact travel behavior of corporate Canada is going to be identical to 2011. However, travel and financial managers are under pressure to keep travel expenses in check and there is definitely pressure to save money wherever possible. The impact to you is travel costs will continue to be scrutinized.
Second, cost of airfare is anticipated to increase by 3.1 percent. Canada is already known to be one of the most expensive countries to fly within. There are a number of reasons, including very few competitors and a very spread out, relatively small population. However, as we have discussed in the past, the real reason flights are so expensive is all that tax. Not just the taxes and fees we pay as consumers but the fees and taxes airlines pay to use our Canadian airports. Many suggest that a reduction in fares and taxes could help claw back some of the trans-border air shoppers that continues to grow. Although modest, a 3.1 percent increase will only help drive more people into the U.S. and revenue out of Canada. If you are looking to save your company some money, consider flying from the U.S.
Finally, the cost of lodging is expected to rise by 2.1 percent. As many hotels are still trying to stabilize their average room rates, I have found more of our clients are looking at the overall cost of a night on the road as opposed to just the stated room rate when making hotel decisions. We have all had $100 a night rates at check in turn into double or higher once parking, Internet access, breakfast and local calls are added in. Hotels like Best Western that offer these amenities as part of the core service are attracting more and more business travellers who are under more scrutiny to help mitigate these perceived rising costs. In addition, as I blogged about earlier this month, if you are looking for a rewarding hotel program that offers relevant promotions, extra perks and savings check out Best Western Business Advantage.
How do you feel about the rising costs of business travel? Will these modest changes have any affect your travel behavior?