For businesses looking to build relationships, cement alliances and garner new customers, having the ability to travel can be critical. But it’s getting more expensive all the time, according to the second annual travel and entertainment report from Redmond, Wash.-based Concur Technologies Inc., a web-based travel and expense management software firm.
The report analyzed US$50-billion worth of data gleaned from Concur’s 15 million users worldwide, highlighting where they’re spending money, where they’re not and the general state of business travel both in Canada and abroad. Among the more interesting findings are:
— Airfares are on the rise. The average transaction amount of slightly more than US$582 for airfare in 2011 rose about 9% from 2010, compared with an average rise of 5% worldwide. “That has an impact on everyone,” says Concur co-founder Michael Hilton. “And that doesn’t even tease out the ancillary fee component. The average ticket has more costs associated with it because of baggage and meal fees and things that used to be bundled into the ticket price.” Hilton contends the higher fares are a direct result of rising oil and gas prices. He sees companies continuing to monitor costs and finding alternatives to business travel when possible.
— Average spending for a personal car increased more than any other expense, rising more than 17.5% in the past year, followed by lodging, which rose 9.6% and dining, up 7.2%.
— Calgary surpassed Vancouver as a top business travel destination in this country, after Toronto and Montreal. The fifth most popular city for business travel was Mississauga, Ont.
— Five Canadian cities made Concur’s list of the top 25 international destinations. Toronto was fifth; Montreal placed ninth; Calgary, 16; Vancouver, 19; and Mississauga, 25.
— The top three global travel and entertainment expense categories — airfare, lodging and dining — comprised more than 60% of total travel spending. Adding the next two categories — entertainment and ground transportation — brings the total to more than 70%.
— While it may be no surprise London is the most visited international city for business travellers, it was closely followed by Shanghai, Singapore and Beijing.
“The number of cities in the Top 25 in China and the Asia-Pacific in general shows it is clearly becoming a centre for business travel,” Mr. Hilton says. “A lot of those cities would not have even made the list 10 years ago, but now so much of the modern supply chain, from manufacturing to back office activity is in Asia, and in China specifically.”
“If you are an international company and you haven’t spent a lot of time negotiating rates in Australia, you may want to do that,” Mr. Hilton says. You might also adjust per diems somewhat, he suggests. “The cost of entertaining in Tokyo is just off the charts in comparison to everywhere else, but that is part of the culture there.”