NBTA Research Quantifies Impact of Fuel Price Increases on Corporate Travel

The National Business Travel Association (NBTA) last week provided members with the result of research designed to better understand the impact of fuel price increases on travel and quantify the responses of corporate travel managers to that impact. The research has two parts, an analysis of fuel-based airfare increases and a survey of travel managers on the impact of fuel prices on air and ground transportation components of corporate travel programs.

Some key findings of the research include:

General

  • Nearly two-thirds of travel managers report increased fuel prices are impacting their travel purchasing.
  • Two-thirds also indicate budget stakeholders, such as department heads, within their organizations are concerned about how they can maintain 2006 travel budgets and meet business needs in the face of rising airfares and gas prices.

Air

  • The average U.S. domestic airfare rose $12 from March 2005 to March 2006, with changes varying significantly by class of service.
  • 52 percent of NBTA survey respondents indicate fuel price hikes have added $51-$100, on average, to the cost of a domestic business trip. 25 percent report an impact of $50 or less, while 13 percent note increases of $101-$150 and 10 percent indicate per trip increases of $151 or more.
  • Travel Managers report taking the following actions in response to rising airfares:
    • Asking or requiring travelers to consolidate multiple trips into a single trip – 38 percent
    • Encouraging or requiring less air travel – 34 percent
    • driving people to travel alternatives, such as web-based meetings or conference calls – 30 percent
    • Tightening purchase requirements for business or first class tickets/driving more coach tickets – 28 percent
    • Implementing stricter pre-trip approval requirements – 27 percent
    • Opening discussion with preferred airlines – 20 percent
    • Several respondents used an “other” category to indicate they are putting a stronger emphasis on advance purchase of air tickets.

Ground Transportation
Asked about their responses to the impact of rising gas prices on ground transportation, survey participants indicated they took the following actions:

  • Opening discussion with preferred ground transportation providers – 16.3 percent
  • Tightening the mandate to use preferred ground transportation providers - 16.3 percent
  • Changing requirements regarding the purchase of gas for rental cars – 16.3 percent
  • Implementing stricter pre-approval requirements for any form of ground transportation – 15.2 percent
  • Encouraging or requiring greater use of public transportation where available – 14.1 percent
  • Recommending a lower car class – 13.0 percent
    • The NBTA is the source for critical information on the business travel industry.

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