Business travel growth expected to slow in 2009

By Mark McSherry - Analysis

NEW YORK (Reuters) - It's not quite the death of the salesman, but growth in business travel will likely slow down significantly in 2009 as cash-strapped U.S. companies cut back on unnecessary trips by executives.

The trend has worrying implications for U.S. airlines, hotel and car hire companies, as well as the other industries that rely on the business traveler.

The National Business Travel Association (NBTA) remains reasonably optimistic, predicting that the number of business trips will continue to expand next year -- but at a slower pace than the annual growth from 2004 through 2007.

"This year we saw a slowdown in the growth of business travel -- in 2009. We will see a continuation of that slowdown," said NBTA CEO Kevin Maguire.

"In some companies, we are already seeing major cutbacks in travel, while other companies have higher travel budgets in place for 2009," said Maguire.

The NBTA said the tough economic conditions are forcing companies to change the way they think about business travel.

One big change is that traveling on behalf of a company will no longer be seen as a perk, Maguire said in an interview.

"Business is business -- do you send people on trips for purposes other than accomplishing business goals? Not any more," said Maguire.

"The economy is tough -- bottom lines are very, very important and the perk issue is really not a factor any more," Maguire said.

MEANER BEAN COUNTERS

The NBTA expects corporate bean counters to become even meaner in 2009.

Its research predicts company travel managers will step up cost-containment strategies by reducing nonessential travel and using data that allows them to access automated hotel information that flags out-of-policy spending.

Other companies will simply stop sending executives to meetings that involve travel costs.

"We are already starting to see companies cancel meetings and cancel participation in conferences," said Maguire. "You will see more companies go to webcasting and teleconferencing and videoconference. You can do a conference for much less than sending bodies to a meeting."

Some companies in the travel industry have already positioned themselves to limit their overall exposure to the slowing domestic economy.