Business Culls Corporate Frills as Credit Crunch Bites
22nd May 2008
Embargoed: 00:01hrs 22 May 2008
Client entertaining, business travel and even office birthday cakes all face the corporate guillotine this week as 59%* of UK businesses rein in costs. A UK wide survey of 500 PAs released today reveals that bosses are rapidly taking steps to reduce their central costs as the credit crunch begins to bite.
The survey commissioned by budget hotel chain*, Travelodge, shows that business travel is the first major policy to be reviewed with two thirds of companies introducing 'budget only' travel. Flights and rail (45%) was number one on the hit list closely followed by personal expenses (39%) and hotel costs (37%).
Top five corporate expenses reviewed:
1. Flights and rail (45%)
2. Personal expenses taxis, food and drink (39%)
3. Hotels (37%)
4. Client entertainment (20%)
5. Staff benefits (17%)
Travelodge commissioned the survey following a surge in its corporate travel business. The budget chain's chief operating officer, Guy Parsons said: "Its clear that business is taking rapid action to control costs. We have secured more than expected corporate accounts in recent weeks and other major corporates want to discuss budget business travel with us."
These sentiments were supported by BSI the global hotel and meetings management specialist. Its clients include nine FTSE 50 companies including Marks and Spencers, Tescos and British Aerospace.
Its Managing Director Trevor Elswood commented: "We have seen a significant move to budget and economy brands over recent months as businesses look to squeeze more from their travel expenditure. Eleven of our top 15 customers have now included economy brands within their preferred hotel programmes. This a reflects a focus on cost reduction and the heightened quality and consistency of budget hotel offering"
BSI declared that budget operators such as Travelodge had seen the biggest gains so far with the hotel chain generating a bookings increase of 20% on last year. Business travel accounts for around 40% of Travelodge's customer base and its most popular business destination is London.
Notes to editors:
For further information:
Travelodge: Greg Dawson tel: 01844 358644
*Desk Demon online survey of 500 UK PA respondents
The first budget hotel brand to launch in the UK in 1985, Travelodge now operates 333 hotels over (21,000 rooms)- nine in Ireland, three in Spain and the rest in the UK. Travelodge aims to be the biggest hotel operator in London by the 2012 Olympics with over 7,000 rooms in the capital.
Six and a half million people stayed with Travelodge last year and 87% of reservations are currently made online at travelodge.co.uk, where room rates start at £19 a night. The chain employs 5,500 staff and is owned by Dubai International Capital.