These days, any economic instability in the investment market can threaten the financial lives of millions of employees, businessmen and taxpayers. The current global financial crisis, which the whole world is enduring, has caused many financial setbacks for many businesses that have been forced to start saving and cutting expenses.
Thus, many luxury services were cut back to overcome the crisis and the resulting losses. As a result, the travel industry has suffered from travel cuts brought about by the global financial crisis itself and caused by declining travel demands, especially by businessmen and regular travelers.
Current statistics show that one-third of companies have actually taken all of their business travel on hiatus in an attempt to cut down on travel expenses, which is considered high business expense. According to a new survey by the Business Travel Coalition (BTC) that surveyed more than 200 companies, one in four companies have implemented emergency cuts to their overall travel spending in response to the current global financial crisis .
The survey was originally commissioned by BTC in response to members' concerns about the prospect of another recession. About 40% of companies surveyed in 14 different countries said they had implemented a full and total travel freeze, while about 25% said they had only cut air travel. Almost 75% of the companies that established the cuts admitted that the reduction measures will remain in place until further notice or even until some change in the current situation.
Research also found that the cuts in travel budgets were good news for most of the low cost carriers in the United States. BTC spokesperson said we have entered a strange situation similar to the cyclical recession that occurred in the fall of 2000. However, there is an increase in the order magnitude of the importance of the current situation and the reactions of companies regarding travel expenses.
Many companies started cutting their airfare costs earlier this year due to deteriorating financial data points. Surveys conducted in the first quarter of the fiscal year did not recognize a downward trend. However, by the middle of the year the base was wide. BTC wanted to unequivocally capture the reaction of companies to the economic crisis in order to prepare for the next year.
As the need for travel increased with the growth of businesses, travel cuts have certainly brought bad news for big business. As a result, alternatives have been accepted to replace this essential need. Half of the companies surveyed said they were looking for alternatives such as video conferencing, canceling overnight trips, and even train travel.
While other companies have implemented new policies that limit staff travel needs and force them to use no-frills airlines like Easyjet or even Ryanair.
Another survey that supported the BTC's also suggested that around half of the companies surveyed were aiming to cut their travel budgets before the end of the economic year, in March 2009.
A poll also by KDS, a travel management company, said that almost 40% of companies were in fact forced to cancel previously booked business trips, while the other third had to cancel many international meetings and replace them with alternatives such as videoconferencing calls. .
These travel cuts as the current financial crisis have deteriorated the travel industries and resulted in numerous losses for many international airlines. Some airlines have in fact been forced to reduce their annual number of flights, especially from places that have seen lower travel costs. The new policies must remain in place until new studies are done on the coming financial crisis.
The current economic crisis has certainly been bad news for thousands of industries and businesses. While the travel cuts may have helped some low-budget businesses cut spending, they have surely disrupted high-income businesses that rely primarily on travel.
The next exercise will surely indicate the precision of any other response and policy that corporations follow. The current policies will surely remain in effect for some time until the financial crisis begins to prevail.