With multi-billion dollar losses from their exposure to sub-prime mortgages and other effects of the credit crunch, you would expect to see the banks and other companies in the financial sector to start tightening their belts. This has certainly been seen in terms of recruitment freezes but what about in one of the other biggest areas of corporate spend? Business travel.

At the annual conference of the Institute of Travel Management earlier this year, the organisation’s executive director Paul Tilstone said a number of firms, mainly US companies in the financial sector, had stopped all travel in a bid to cut their costs None will talk about it publicly, worried about the effect that talk of a travel ban might have on a bank’s already deflated share price, but in private they admit to near-total travel bans or, at least, a clampdown on who can and cannot fly business class and on what types of journey.

One insurance company in the City at the end of last year started using all business carriers Eos and Silverjet as well as BA and Virgin to bring down fares but the bankruptcy of the first two has now led it to change tack. It has now launched a competition among its employees to find the cheapest business class air fare between London and New York and will give the traveller who pays the lowest fare a crate of champagne. Not cheaper cava you’ll note.

But it’s clear that not everyone is doing the same. One frequent traveller at a large US bank says travel policy had not changed in the slightest, despite his firm posting multi-billion dollar losses as a result of exposure to the sub-prime market earlier this year.

Lee Whiteing, UK travel manager at HSBC, says the firm has not amended any of its travel policies but "continues to be vigilant where travel expense is concerned".

Andrew Solum of Travel Industry Associates, which handles corporate travel management on an outsourced basis for a number of companies, says: “The banks are a real mixed bag these days. Some have implemented travel curbs allowing travel only if really necessary. That makes me laugh as lines like this imply that before the statement, lots of unnecessary, and thus uncontrolled, travel was being undertaken.”

“Others are reducing their class of travel in Europe," he says. "Some previously only allowed business class for trips over 2.5 hours and now this has been extended to four hours. Some other banks have not made one change to their policy as business is still busy and staff need to travel for meetings. No travel sometimes means no deal, and the deals can be where banks make their big money.”

Andy Hibbert, managing director of travel management company Reed & Mackay, which has a number of companies in the finance sector says his clients are still travelling. “Our financial sector clients are typically in specialist finance markets e.g. private equity, hedge funds, and these are quite different from the large banks,” he says. “What we are finding is that there are a lot of markets where people are actively searching for assets. While some markets are going down that presets an opportunity for others. Our clients are still raising money and travel is still being supported. It’s very different from the bigger retail banks or financial companies where some parts have been closed down, for example Bear Stearns, who have to be seen to be acting publicly. In such companies, some travel is being reduced, spend being cut or policies are being changed.”

“Even in that position, companies like Reed & Mackay are in the best position to effect a much more efficient value for money proposition. Our job is to save time and money if they still want to travel in business class.”

A recent survey of hotel rates from business travel agency Hogg Robinson Group makes interesting reading too. This regular survey looks at the average rates paid by the company’s client in various cities around the world. It found significant shifts in travel patterns within the banking and finance sector. While there was still a focus on the traditional finance hubs, there was increasing traffic to cities such as Dubai, Abu Dhabi, Moscow, Geneva and the Indian cities of New Delhi, Bangalore, Hyderabad and Pune.

The growth in traffic to the United Arab Emirates may well be down to the increasing number of banks which have been burned by the credit crunch. The ‘toxic debt’ many banks have been exposed to has forced them to seek fresh capital from new sources, with many turning to the sovereign wealth funds and other investment vehicles of the Middle East, currently awash with money because of the rising high price of oil.

One company that will be keen to know whether banks have banned travel or not is British Airways. In autumn 2009, it plans to launch a business-class only service between London City Airport and New York. The American banks at Canary Wharf and their counterparts in Wall Street are the target. If the banks really do clamp down, BA may have empty planes flying across the Atlantic.