Up to two thirds of business in the UK are reviewing corporate travel expenditure as the credit crunch begins to affect profit margins.
According to a survey commissioned by UK budget hotel chain Travelodge, 59 percent of UK businesses are seeking to rein in costs.
The survey results show business travel is the first major policy to be reviewed, with two thirds of companies introducing ‘budget only’ travel.
Flights and rail (45 percent) was number one on the hit list, closely followed by personal expenses (39 percent) and hotel costs (37 percent).
The crunch is also being felt in the US, with hotel operators Marriott International and Starwood Hotels & Resorts Worldwide reporting lower quarterly profits.
Marriott Chairman J W Marriott says “businesses are cutting back” on corporate travel and he expects that tough negotiations lie ahead with corporate customers over rates.
Travelodge Chief Operating Officer Guy Parsons says the downturn in spending has led to increased business for the chain.
“We have secured more than expected corporate accounts in recent weeks and other major corporates want to discuss budget business travel with us,” he says.
By Elizabeth Clifford-Marsh