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Business travel buyers’ budgets see ‘first increase in four years’

The number of business travel buyers with higher budgets is on the increase for the first time in four years, according to new research.

Almost a third (32%) of buyers will have more money to spend in 2017, compared with 29% last year.

This follows successive annual falls since 2013, results of the seventh annual Business Travel Show forecast reveal.

Airline budgets will also rise for 40% of buyers, the highest number for the last three years.

The pressure to cut costs while maintaining quality remains the biggest challenge for the second year in succession, according to the poll of 178 travel buyers, including 61% from the UK.

This may explain significant increases in the use of budget airlines, Uber and car rental services, and mid-range and budget hotels.

The research found that 85% of buyers will have the same or more to spend on airline travel in 2017, compared to 76% last year.

Budgets will increase for 40% of buyers, compared to 33% both in 2016 and 2015. Just 15% expect budgets to shrink, compared to 24% in 2016.

Looking forward, 38% of buyers expect their total travel costs to rise over the next 12 months and 48% will be planning more trips.

Duty of care has risen moved up the table from fourth to second, while compliance has dropped from second to sixth. Brexit makes its debut at number four, with

UK buyers concerned about the impact the strength of sterling will have on prices following the Brexit vote. Other important issues include traveller duty of care, rising air fares, enforcing travel policy compliance and price variations between booking channels.

The use of low-cost carriers remains unchanged for the third year running at 86%.

As many as 81% of buyers used low-cost airlines more last year, against just 26% in 2015.

At the same time, 38% of buyers booked fewer business class flights and 10% switched carriers because of distribution cost changes.

A total of 17% have experienced price increases as a direct result of distribution cost changes and only 11% agree or strongly agree that such changes have been a good thing.

Just under a third of buyers (32%) will have more to spend on accommodation in 2017, and fewer (14% compared to 21%) will have smaller budgets.

The use of budget and mid-range hotels rose sharply, with 60% and 87% of buyers increasing their use of suppliers.

Although 77% of buyers still do not use Airbnb, 17% did spend more money with the accommodation sharing site in 2016.

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