Business travel groups form international alliance

SALT LAKE CITY -- A group of business travel associations from around the globe announced today the formation of a new international alliance at the site of the National Business Travel Association's (NBTA) 34th Annual Convention and Trade Show.

NBTA, the Institute of Travel Management (ITM), the business travel association of the United Kingdom and Ireland, the Canadian Business Travel Association (CBTA), Verband Deutsches Reismanagement (VDR), the German Business Travel Association, and the Australasian Business Travel Association have joined together in the Paragon Agreement.

The Paragon Agreement will serve to support the travel management profession and the international business travel industry and provide a forum for the exchange of ideas amongst its members. The Alliance Partners will also work to advance the education resources for their members, extend the circle of networking and attendance at joint activities, and to advance the understanding of corporate travel management among corporate organizations, provide a central voice to represent the concerns of corporate travel buyers before government organizations.

"NBTA is proud to be a founding member of the Paragon Agreement," said Kevin Iwamoto, NBTA President. "Business travel is crucial to our world economy. And in the years to come, we hope this alliance will be a powerful voice for the international business travel community." The agreement serves to promote international contact between member organizations, to support the exchange of expertise and information, and to further advance the understanding of travel management by facilitating and supporting international studies and forums. 

"In this time of international uncertainty, it's important to come together for a common cause. Forming this new alliance makes a powerful statement: we are going to do everything we can to ensure that business travel remains a critical aspect of our global economy," Iwamoto said.

New ways to cut costs

Two weeks ago, NBTA released the results of a survey indicating that corporate travel professionals are looking for new ways to keep travel costs down and are redefining their relationships in response to the current economic climate.

Thesurvey of 350 corporate travel industry professionals last month found 56% of respondents said they think it will be 12 months or more before we see healthy levels of business travel again. When asked what must occur for a turnaround in business travel, 56% cited reduction in travel costs and 46% said improved security procedures at transportation gateways. Overwhelmingly, most participants (74%) point to the airline industry as the most significant sector to impact the turnaround in business travel volumes. And while one-third of respondents expect travel prices to remain static, 68% of buyers believe airfares will increase during the rest of 2002.

"Business travel demand is not inelastic, as some in the industry once believed," Iwamoto said. "Due to the current high costs of travel, many corporations are looking for innovative ways to meet their travel objectives while also adhering to the bottom line."

Trimming travel costs and strengthening buyer/supplier relationships are priorities for most respondents. 67% said they have increased contact with preferred partners in the past 12 months, and 53% have seen corporations implement travel cost-cutting measures.

Renegotiate contracts

Most corporate travel managers are reaching out to suppliers, with 78% saying they have sought to renegotiate current contracts and 75% saying they have increased contact with alternative suppliers in the last 12 months. "It is a good for the future of our industry to see suppliers working hand-in-hand with our travel managers to adjust to this new travel landscape, by providing services or renegotiating contracts," said Iwamoto. "Now more than ever before, we all understand how important good relationships are to the success of our travel programs."

In comparison, travel suppliers are implementing more alternatives to normal booking channels in order to reduce their distribution costs, with 50% saying they have implemented more travel contract/compliance procedures in the past 12 months. Yet, 86% of suppliers say they are seeing increased sales as companies began seeking alternative travel suppliers with lower costs. Finally, NBTA asked its members what measures they will implement if the current security measures impede travelers. 

Most buyers (61%) say they will recommend increasing the use of conference calls or webcasts, while some recommend reducing out of town meetings and reducing the number of travelers (32% and 30% respectively). On the supplier side, very few (18%) would institute programs to improve customer care in the security process, indicating carriers willingness to provide efficient travel, but not to assume the government’s role in security concerns.

Corporate travel managers

The National Business Travel Association, established in 1968, represents over 2,400 corporate travel managers and travel service providers. NBTA members manage and direct more than 70% of expenditures within the business travel industry. NBTA is committed to the professional development of its members and offers educational and training opportunities. It is the source for critical information on the business travel industry.

Iwamoto was elected president of NBTA last August. He is a 20 plus year veteran in the airline and travel industry having worked for several airlines including Northwest/KLM, Hawaiian Air and Pan Am. While with the airline industry he worked primarily in the sales and marketing field and was consistently recognized as a top national sales manager.

Iwamoto left the airline industry in 1995 and joined the Walt Disney Company corporate travel management team as an account manager. In 1998, he joined Hewlett-Packard as the global airline and car travel supplier manager. His responsibilities include working with HP and Agilent Technologies management team members and multinational offices, negotiating and creating a worldwide purchasing strategy for airline and car rental suppliers.

The National Business Travel Association, established in 1968, represents 2,400 corporate travel managers and travel service providers. NBTA members manage and direct more than 70% of expenditures within the business travel industry.