Canada’s corporate sector will continue to rein in travel spending in the coming year – using discount airlines and relying more heavily on money-saving technology tools, industry executives said last week.
Speakers at the annual Canadian Business Travel Association conference in Calgary predicted modest increases in 2003 for travel-related expenses such as air, hotel, telecommunications and entertainment.
But with many companies still recovering from the economic blow of the September 2001 terrorist attacks, cost-control strategies are becoming much more essential, said Lynn Pawlyshyn, a corporate consultant for American Express Consulting.
“The baseline for measuring where we’re going has been redefined since Sept. 11,” Pawlyshyn told about 160 business travel executives from across Canada.
The company, which operates as the professional services arm of American Express in Canada, researched travel trends and forecasts for its corporate clients and found airfares jumped five to six per cent in 2002 from the previous year. Hotel rates rose by two to three per cent, as did meals/entertainment costs.
Increased government levies such as new security surcharges and airport improvement fees spurred some of the airline ticket hikes, Pawlyshyn said. Supply also dropped as hard-hit North American carriers responded to the travel downturn by cutting the number of flights, restructuring their operations or folding.
This year, the company predicts businesses will implement more cost-control strategies such as outsourcing travel management, increasing their use of automated expense management tools and relying more heavily on online travel bookings and no-frills carriers.
Anthony Grey, director of corporate consulting for American Express Consulting, said many companies that turned to teleconferencing and web strategies after 9-11 are travelling once again.
“We’re now seeing them moving back out to the street,” said Grey, noting that low-cost carriers will equal about 75 per cent of Canada’s airline spending volume within three years. As well, the company estimates 20 per cent of travel transactions will be conducted online this year.
However, Grey and Pawlyshyn said intangibles such as the pace of U.S. economic recovery and instability in the Middle East will have a direct impact on travel spending in 2003 and beyond.
Also at the conference, an official with Calgary-based WestJet said the no-frills carrier intends to spread its wings beyond Canada in the coming years. Bill Lamberton, the firm’s sales and marketing vice-president, said the airline has successfully expanded from a regional to a national carrier due to its low-cost model, innovative marketing strategies and support for under-served niche communities.
In the next few years, he said, the carrier will grow even further as it expands into key cross-border markets, widens its distribution channels and possibly develops alliances with other like-minded low-cost airlines.
“We’re not a follower – we’re not traditional,” Lamberton said.
