Most European companies opt for no change in travel spend

European companies’ in 2010 are expected to still maintain a wait-and-see attitude on travel in view of the latest effects of the crisis, with only 20% anticipating an increase in their travel budget, 61% no change and 19% predicting a reduction.

The prediction came from American Express as it released its Business Travel 2009 European Barometer study showing that 66% of companies reduced their business travel budgets by at least 31% this year.

There are geographical variations: countries such as Germany (33% of companies) forecast an above-average budget increase, with the Netherlands at 28% and the UK down at 23%.  However, businesses in Belgium or Spain expect an above-average decrease of 22% and 24% respectively with France and the Scandinavian countries’ expectations lying close to the European average.

Almost three quarters of companies opted for using alternative ways to make travel savings, using in particular video conferencing, leading to an 18% fall in budgets reported on average. The study also found that 23% saw no change to their travel budgets while just 11% noted an increase (of +23%).

Amex senior vice-president and general manager business travel EMEA David Herrick said: “We’ve seen travel policies tighten up, purchasing controls increase and employee travel driven by client retention needs where as a focus was on driving new business.

Organisations have placed greater importance on using travel and entertainment spend for maintaining existing clients, the research shows.  57% of European companies’ travel budgets are dedicated to maintaining or acquiring clients and markets, ahead of trips for internal meetings (29%) and meetings with suppliers (8%), on average,.

This is a trend that affects small-to-medium sized enterprises (61%) more than companies with budgets exceeding €20 million (47%).