Rising hotel and airline costs are main reason why seven in ten European corporate travel buyers expect their travel budgets to rise in 2019

    Corporate travel decision makers in Europe are facing increasing challenges when it comes to how they spend those budgets from rising hotel and airline costs and increased pressure to maximise the value of their travel investments. A recent study from Cvent highlights that almost seven in ten of them anticipate their travel budget will increase in 2019, with 16% of respondents saying they expect their budget to significantly increase.

    The research brief from the software-as-a-service company, entitled ‘The European Travel Manager in 2019’ reveals that just one in four European travel buyers expects their budget to remain unchanged this year, with just 6% foreseeing a year-over-year decline. German buyers are especially optimistic about their budgets, with 21% expecting a significant increase in 2019.

    The study found that more than seven in ten (73%) of travel buyers across Europe say they source accommodation at least once a year, with 16% of that total doing it more than once annually. One in five (20%) source accommodation once very two years, with around 5% sourcing once every three years or longer.

    Chain hotels are the most commonly booked accommodation type for travel programmes, selected by more than half (53%) of managers surveyed. Together, mid-scale (24%) and boutique or independent hotels (12%) are the preference for just over one third of respondents, with the remainder citing shared apartments (7%) or sharing economy accommodation (4%).

    We are seeing clear changes in traveller habits, but generational changes are also appearing to influence travel buyer habits too. The Cvent research shows that younger travel buyers are more likely to book their employees into shared service apartments than their more seasoned peers as perhaps their own travel habits start to influence business activity.

    Travel managers are citing location (69%) as the most important consideration for hotel selection, followed by price (59%), amenities such as complimentary breakfast and WiFi (53%). Hotel star rating (30%) and loyalty programmes (25%) appear much further down the criteria listing and not nearly as significant when managers choose hotels for travellers.

    Rising hotel costs (27%) are the biggest challenge for any accommodation travel buyer. But, the research results also highlights a lack of transparency from hotels in the negotiation process (17%), submissions failing to meet with bid requirements (16%), slow or incomplete responses to request for proposals (13%), and chain account managers failing to provide crucial information from the company to individual hotels (11%), as other areas of concern.

    The findings, which were based on a Dec-2018 survey of 500 travel buyers from across France, Germany, Italy, Spain and the United Kingdom, shows that while travel buyers may have larger budgets, pressure from rising hotel and air costs and high organisation expectations for return on investment with travel programmes, means they are under increasing pressure to deliver.

    The report suggests that hotels that are “responsive to these concerns” and work “to build and maintain trust” throughout the bid and negotiation process will be “better positioned to sustain existing relationships” with buyers and “build new ones during the next sourcing season”.

    While the results show that chain hotels are particularly well positioned to meet travel buyers’ needs, the survey responses display a “pre-eminence of location” as a hotel selection criterion, and the “relative insignificance” of loyalty programmes, opens the door of opportunity for mid-scale and independent boutique hotels.

    “Hotels that respond quickly, completely and transparently to corporate travel decision maker invitations may have the opportunity to distinguish themselves and achieve growth in a highly competitive business travel market.” says the report.

    More Like this