Economic uncertainty is yet to take travel off the table for businesses. Companies across the globe believe face-to-face meetings are necessary for business, and most CFOs expect travel budgets to hold steady or increase in the next year, a global survey found.
Despite considerations for virtual meetings to replace more than half their company’s travel — a sentiment shared by 43% of CFOs — 93% of travel managers, 90% of CFOs, and 89% of business travellers don’t expect upcoming cuts to their company’s travel budget, according to a report from SAP Concur, a US company with services that include expense management.
Of the 90% of CFOs who are optimistic about future business travel, 53% expect a slight rise in their travel budget and 23% expect a substantial increase over the next year. Currently CFOs (81%) and travel managers (69%) cite budget limitations as a barrier to the success of business-travel outcomes.
The report surveyed 3,750 business travellers across 24 markets, 700 travel managers across seven markets, and 600 CFOs across six markets in April and May.
Technology and travel: Fears and prospects
Artificial intelligence (AI) is expected to change the game for business travel, with concerns around what this means for the future of business travel.
Travel managers in particular fear that technology will continue to push companies toward more virtual meetings, which could erode the prospects of business travel and disrupt their roles.
CFOs are also leaning on the side of caution. While 55% expect AI systems to catch more errors, including potential expense fraud, 45% are concerned that those systems could increase errors and allow fraud to slip through, the report said.
Additionally, cybersecurity is a pressure point for employees’ travelling, with 48% who report increased concerns about cyber threats while travelling abroad.
Safety fears, stretched budgets hold back desire to travel
Companies continue to see value in budgeting for travel, but financial risks are becoming more centred around the cost of employees refusing to travel than the cost to facilitate it.
Overall, 90% of business travellers said they would consider refusing a work trip. The top reason was safety or social concerns (40% vs. 44%, respectively, in 2023) and health concerns related to the destination (38%).
Budget constraints are also affecting the appeal and experience of travel. Most employees (84%) have recently started taking steps to make ends meet at the end of a business trip, and many reported subsidising elements of their trips to maintain a comfortable experience. According to the report:
- 38% have paid to upgrade their accommodation.
- 35% have paid for extra hotel nights to avoid long travel days.
- 30% have paid for better seats on flights.
These factors are creating concerns for CFOs struggling to balance business demands, personal risk, and peace of mind. “While CFOs are under pressure to control costs, they still need staff to travel,” the report said. When asked about top business risks, CFOs ranked employee reluctance to travel on the same level as geopolitical tensions, the report said. The finance leaders believe those factors are the two most likely to have a negative impact on their company’s health in the next year, ahead of new sustainability regulations, reduced corporate spending, and new tariffs.
Consequently, both CFOs and employees believe travel managers could do better in their roles to improve business travel experiences for employees.
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.