Business travel to U.S. from overseas spikes

by Tom Johansmeyer on

Suits and ties are no longer in short supply on visits to the United States from overseas. The latest data from the U.S. Department of Commerce shows 11 percent growth year over year for the first six months of 2010 … for total travel. Business travel led the way, with a 19 percent year-over-year gain for the same period. Leisure travel was up 9 percent.

Of course, this follows the staggering losses of 2009, in which business travel to the United States from overseas plunged 40 percent year over year, thanks in large part to the effects of the global financial crisis and the collapse of Lehman Brothers in September 2008. So, this year’s double-digit gains aren’t nearly enough to recover for the business activity that has been lost.

We’re headed in the right direction with business travel exports, but we still have a long way to go. The Department of Commerce notes in a statement, “[T]he double digit gains in business travel that most of the top overseas countries registered in the first half of 2010 are a welcome change.”

For the top 20 countries in travel to the United States, all posted gains for business-related travel, but only six showed leisure travel growth.

The suits are back, and they’re probably bringing some cash with them!

Hotels and spas use corporate retreats for sweet financial revenge

by Tom Johansmeyer on

It’s hard to tell who wants a business travel rebound: business travelers or the hospitality companies that cater to them. Routine road warrior jaunts suck, but there are executive retreats, training programs and other opportunities that do appeal even to the most jaded of the white collar folks.

So, the hotels are fighting to get business travelers back, according to Business Insider, and they’re getting creative. Luxury properties, including spas, were nailed by the financial crisis and ensuing recession. They have a lot of ground to make up. To do this, they’re coming up with new programs to get the corporate folks to open their wallets. Some of them are pretty bizarre, even retaliatory. Business Insider reports:

Their new approach is luring clients back to their bedrooms for “must-have” bonding and training sessions that put execs in compromising positions.

Retreats that specialize in corporate getaways have been cooking up programs that encourage extremely awkward and potentially dangerous bonding activities, like fake-trying to kill each other.

Call it the, “You’re putting us out of business? We’re going to push you off tall objects, hike mountains naked with 50 pounds on your back, try to kill each other and make you beg for more” – strategy.

Even with these implications, the response from the business world still seems to be a resounding, “Thank you, sir! May I have another!”

Bank of America, Google and Toyota are among the companies that have gotten on board with these programs. Some of them do get pretty weird, such as:

The icing on the cake is The Death Race, where co-workers sit for 45 minutes in an ice-broken pond, gulp a gallon of milk (even if you’re lactose intolerant), crawl under barbed wire and sprint up a greased-up ramp.

Don’t you remember when the corporate people were just interested in making money? It was all so much easier back then …

[photo by Boss Tweed via Flickr]

Business travel increasing, but with caution

by Tom Johansmeyer on

The Association of Corporate Travel Executives found in a survey last month that a lot of business travelers will be open their wallets a little wider. Seventy percent of respondents say they expect to shell out more on business travel next year, with 60 percent indicating that their employees would travel more next year. Meanwhile, the National Business Travel Association found that travel spending is up 5.5 percent over last year and is likely to inch 4.5 percent higher next year.

According to USA Today:

“In recent months, soaring corporate profits and strong cash reserves have meant that companies have begun to relax their travel restrictions and allow their existing employees to get out on the road more,” says Suzanne Cook, senior adviser with the U.S. Travel Association. “It shows that companies are realizing the value of face-to-face travel to not only preserve current relationships but to build future business.”

With hotel and airline prices going up, which is part of the reason for the increase in spending, many businesses are looking at alternatives. Fifty-four percent of corporate travel executives are pushing videoconferencing and other ways to stay in touch.

Nonetheless, it looks like business travel is back in style. So, how will you adjust to it? Will you take this approach, or this one?

Five indicators of the airline industry’s future: start with first and business class

by Tom Johansmeyer on

Airlines are getting a little lucky. The big bucks and wider margins that come from first- and business-class fares are coming in faster than the nickels and dimes from economy class. This will delight the various airline industry employees who think that passengers aren’t paying enough, and it’s also a growth indicator.

According to the International Air Transport Association, an industry trade group, year-over-year growth slowed down in August relative to previous months, though this is due in part to the fact that August 2009 was the first month of the industry’s recovery, setting a higher bar for year-over-year growth than in the few months prior.

Nonetheless, airline sector growth is slowing down a bit, and not just because of the higher base in August for relative measurement. The total number of passengers traveling fell a little over 1 percent from July to August this year.

In August, first- and business-class passenger traffic surged 9.1 percent, following a 13.8 percent jump in July. Behind the special curtain that separates the elite from the proletariat, passenger traffic climbed 6.2 percent in August, following 8.8 percent in July.

So, where is the airline industry going this year? Here are five indicators to watch:

1. According to IATA‘s 230 members, demand for premium travel is up 17 percent relative to 2009 … but 99 percent of that hit in the first quarter of 2010.

2. Premium-class travel has leveled off since the end of Q1, but it’s uncertain if this is only a temporary state.

3. Business confidence is still positive, but it is inching downward. Premium markets remain 11 percent below the early 2008 peak, MSNBC reports.

4. Leisure travelers are even trying to help, with total economy travel up 11 percent from the depths it hit in 2009.

5. Month-over-month stagnation now may not say much about the future, according to IATA. Leading indicators point to growth of 5 percent to 6 percent a year.

[photo by Let Ideas Compete via Flickr]

Business travel picks up again – but not for the reasons you think

by Tom Johansmeyer on

Did you see more suits at the gate this year? You probably didn’t, but that doesn’t mean businesses aren’t spending more on travel.

The latest data from the National Business Travel Association, in a survey of 170 corporate travel managers in North America, indicates that corporate travel budgets climbed 5.5 percent in 2010, and they’re set to gain another 4.5 percent next year.

But, it’s not for the reasons you think.

Sure, there are a few more people in seats, according to Craig Banikowski, the NBTA’s chief executive. He says that “companies are already getting their teams back on the road to help build business.” But, the underlying driver of the increase in business travel spending is that airlines and hotels are discounting less and kicking their prices higher.

Nonetheless, the NBTA report is optimistic. It finds that 72 percent of corporate travel managers believe that the business travel industry has improved over the past year. And, 63 percent believe it will continue to do so over the coming year.

Notes Banikowski, “As the economy continues to improve and both domestic and international costs rise, we will see airlines and hotels wield more negotiation power.” He adds, “Many travel buyers are already experiencing more strict market thresholds and expect this to result in smaller corporate discounts going forward.”

[photo by Mobile Edge Laptop Cases via Flickr]