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Travel Notes: Companies cut travel expenses
Sunday, August 29, 2010

In response to tough economic times, large corporations have ordered severe cuts to travel spending over the past two years or so, a move that has staggered the hotel and airline industries.

Sixty-seven percent of the business travel managers responding to a survey said they changed corporate policies to restrict business-class air travel to cut costs.

Only 9 percent said they allowed travelers to upgrade to first or business class on flights within North America. On international flights, the survey shows, travel managers are more likely to allow for upgrades.

The survey of more than 600 business travel managers for large corporations, conducted by the National Business Travel Association and travel management agency Egencia, shows that such managers rely on several policies to control travel expenses. The topic is significant because U.S. businesses spent nearly $50 billion on air travel in 2009.

To save money, most business managers encourage travelers to buy airline tickets in advance and to use "preferred" carriers, hotels and car rental agencies that have negotiated discounts with businesses, according to the survey.

"Companies have made significant strides in the last two years to tighten travel spending," said Christophe Peymirat, vice president of global marketing for Egencia.

Despite such cost-cutting polices, the survey found that 67 percent of the travel managers said consequences for violating the travel guidelines were limited or nonexistent.

What's more, only 58 percent of the managers surveyed require business travelers to get approval for any travel spending before the trip.

Hotel rates vary

Another new survey shows that travel costs vary widely by city.

A global hotel survey by Hogg Robinson Group, a corporate travel company in Britain, found that overall, hotel rates in North America remained flat or rose slightly in the first half of this year from the same period in 2009. But rates in several cities took sharp increases or decreases.

For example, hotel rates in San Francisco dropped 9 percent to an average of $220 a night. In Los Angeles, rates rose 5 percent to $246, while rates in Montreal jumped 9 percent to $155, according to the survey.

Moscow held its place for the sixth straight year as the city with the world's most expensive rooms, averaging $396 a night.


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First published on August 29, 2010 at 12:00 am
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