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May 10, 2013

Italy: American Express Report - Business Travel is the New Business

Europe’s senior managers continue to travel, albeit with greater awareness of the costs involved, and in 75% of cases, even do it more than they did three years ago. The heightened focus on costs has put the sector under pressure, however, with half of Europe’s executives having a lower travel budget at this disposal than three years ago.

These were the findings of the American Express “Business on the move” survey, produced by the Economist Intelligence Unit. The report, which interviewed 320 corporate executives, shows that the general downturn in western European countries has changed companies’ travel plans, although they now authorise more trips than they did three years ago.

The reason, says the report, is simple: at a difficult time like this, business trips may represent a much-needed opportunity to acquire new customers and consequently boost sales. The tendency to stay rooted in the office is now increasingly part of a corporate model in decline, and almost all the companies surveyed think that business travel is also fundamental to maintaining their existing core customers.

The current environment clearly requires increasingly efficient and effective cost controls, a trend that, according to the study, looks set to increase, to the point that it will represent a company’s real competitive advantage in the new global economy.

"Business travel will continue to be as important as it is now, whatever the destination or prevailing economic conditions" says Piotr Pogorzelski, Vice President & General Manager Global Corporate Payments of American Express Italia. "This is because the vast majority of senior managers see a crucial link between business travel and company success".

But where do companies go to seek new business opportunities? Inevitably to markets with the greatest growth potential, namely BRIC countries. So the key destinations on the new business travel map are Brazil, Russia, India and China, which are today the most frequent destinations for 10% of European business travellers, ahead of more mature markets like the US: in particular, trips to China has tripled in the last three years. Nevertheless, despite a slight decline, western European countries are still the most popular destinations for 66% of company managers.

Business travel to emerging markets is set to increase significantly: it is now easier for travellers to obtain a visa for developing countries than for their more developed counterparts.

American Express points out, however, that European business travel often does not manage to achieve the results expected, owing to the adverse economic climate and the lack of definite objectives to be achieved on the trip. As regards new technologies, Europe's senior managers tend to see them as a support to business travel rather than an alternative; telepresence is becoming increasingly widespread, but for now is mainly used for internal company meetings.

The crucial link that senior managers perceive between business travel and company success remains fundamental, however: "Companies in western Europe", Pogorzelski concludes "have identified business travel as an important driver for economic growth".


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