Economic Woes to Hit Travel Industry Hard, Study Says November 21, 2008
Corporate America's economic woes are painting a bull's eye on the travel industry, according to a recent survey. It's not about vacationers opting to stay home: It's all about businesses cutting costs—and business travel may very well have been the bread and butter of the travel industry.
"Businesses across the nation are looking for ways to cut expenses and our survey shows the travel industry stands to take the biggest hit," says BackTrack CEO Bob Gandee. "Reductions in business travel will negatively impact all those companies that service the travel industry."
BackTrack, a national pre-employment background screening company, recently surveyed more than 590 companies of every size and type, and from states across the nation. Survey results show 32 percent of the respondents plan to reduce business travel expenses. Related to this category, another 27 percent plan to reduce budgets for meals and entertainment, 25 percent plan to reduce employee perks such as incentive programs and holiday parties, and 23 percent plan a reduction in meetings and conventions.
These percentages add up to very real losses for many companies directly and indirectly associated with the travel industry. While the cutbacks are in categories many human resource managers consider soft, the end result of less travel won't seem very soft to airline and hotel employees, waitresses, bartenders and the owners of companies doing business under the umbrella of the travel industry. In fact, 30 percent say they plan to implement an immediate hiring freeze, and 20 percent are now planning staff reductions.
Overall, 61 percent of the respondents say they plan to implement changes to reduce costs within the next 90 days, indicating a sense of urgency and perhaps an opinion that the economy is not likely to recover anytime soon.
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