Over the past several years, business travel has fallen sharply, but according to a new report, small business owners are taking initiative to revive the trend. In Concur’s 2013 Expense IQ Report, the expense report company found that business travel expenses declined significantly toward the end of 2012.
According to the study, travel and entertainment expenses fell 4.5 percent from 2011 to 2012 among businesses, and in fourth quarter 2012, travel expenses fell 21 percent. Although this is hardly surprising news considering the overall state of the economy, the quick drop off in the last months of 2012 came as a shock to economists.
“While 2012 was overall a year of tighter budgets for U.S. travelers, the sudden and extreme decline in quarter four travel and entertainment spend[ing] in particular is a bit of an outlier,” the report stated.
The study attributed the decrease to a series of uncontrollable and unexpected events during the period, such as Hurricane Sandy, the threat of the potential consequences of the congressional “fiscal cliff” debates that continued into 2013, and the then-unknown outcomes of the 2012 U.S. presidential elections.
Small business spending
Officials at Concur found it surprising, however, that small business owners led the way in travel spending. Per traveler in the late months of 2012, small businesses spent more than their corporate counterparts. Small businesses spent more on airfare than large businesses by 13.6 percent, as well as car rentals by 57.6 percent. Even small business spending on lodging and dining out while traveling exceeded larger businesses by 21 and 17.8 percent, respectively.
One explanation for the results is that small business owners are traveling more on business, but also, these smaller organizations tend to be subject to higher travel rates. While many larger corporations are able to negotiate private, lower rates with hotel chains, these discounts are often not made available to small businesses.
Small businesses continue to understand the power of meeting with clients face-to-face. Even still, overall travel statistics are falling, with individuals instead opting to communicate with clients via teleconferences, email interactions, and phone conversations.
When small business owners find themselves in need of traveling to improve client retention, they can come to National Funding for assistance. National Funding can provide guidance on getting a small business loan to cover more essential expenses, as well as a merchant cash advance when in a bind.