Status seekers pulling back

by Tom Johansmeyer on

It’s not just the travel companies’ bank accounts getting hit in this market – loyalty programs are getting spanked, too. The management consultants, investment bankers and attorneys – now fewer in number than a year ago – who accumulate elite status quickly aren’t spending as much time on the road. With considerably less travel time being logged, the folks who used to have platinum status on multiple airlines and in multiple hotels aren’t hitting the same levels they have for the past several years.

A study by Colloquy, which conducts marketing research for loyalty programs, showed that loyalty program membership dropped 28 percent in the travel industry. In 2007, the average traveler belonged to 2.8 of these programs. Now, it’s down to merely two. Lower- and middle-income men are being cited as the source of the decline, as they’ve been hit harder by layoffs.

Additionally, active participation in loyalty programs is down almost a third. This year, the average traveler is participating actively in 1.5 programs – a year ago, it was 2.2. Among the wealthy, this type of engagement fell 13 percent – from 2.3 programs down to two.

According to Colloquy, travelers are focusing on fewer programs and looking to get as much as they can out of them, rather than spread around their travel with the knowledge that they’ll have enough to reach and maintain high statuses with several travel companies.

Corporate travel off 15%: ouch!

by Tom Johansmeyer on

This sucks: corporate travel is expected to fall 15 percent this year. As much as you like to think you’re doing your part by buying a heavily discounted ticket and going on vacation, the individual traveler’s contribution to the industry pales when compared to that of the corporate road warrior. If the airline industry is going to recover, it will come on the backs – and corporate cards – of those suited crusaders who wield laptops, demand pill water and pay full fare.

Hotels and airlines – and rental agencies and restaurants and just about everyone else – relies on corporate travel. In addition to spending more, this segment of the traveling population tends to hit the road more frequently, so they spend more per trip and per year than the rest of the world. Without their full “commitment,” the tourism and travel industry will have a hell of a time recovering.

A new report from travel industry research firm PhoCusWright dives into the 15 percent plunge for the $85 billion sector, which involves budget-cutting measures by the businesses on which travel service providers have typically relied. Meanwhile, the U.S. travel industry as a whole is only expected to drop 11 percent, making it smaller than it was in 2006.

How important is business travel? Historically, it’s accounted for around 40 percent of the travel market, but shrinking demand brought it down to 39 percent of the travel business in 2007 and could push it all the way to 35 percent by the end of 2010.

“Current economic challenges and public scrutiny of travel and entertainment spending has placed corporate travel on the chopping block. Sharply curtailed corporate travel budgets will mean not only less travel in 2009, but stricter policies and tougher policing when spending does occur,” said Susan Steinbrink, PhoCusWright‘s senior research and corporate market analyst. “However, the recession will positively affect innovation, as corporations and travel management companies intensify efforts to optimize travel programs. This means bringing more spend under management, accelerating integration efforts across the corporate travel value chain, and leveraging new technologies-from mobile to video conferencing-to bolster the bottom line.”

Ritz-Carlton wants to host your meeting

by Annie Scott on

“It’s not extravagant if it produces results” is the mantra of Ritz-Carlton’s new offer for groups.

Ritz-Carlton is looking to host conferences and off-site meetings for groups of 10 or more (booking a minimum of 10 rooms), and they have a lot to offer:

  • Daily continental breakfast
  • General session meeting room with high speed internet access
  • 20 per cent savings on audio visual needs
  • Select suite upgrades

The “Meetings Within Reach” promotion is available all over the world, so why not convince your boss to take you all somewhere exotic? You know, to bond. Trust exercises are so lame.

Meetings must be booked by September 30 and held by December 31, 2009, so get on it. The rates start at $159 per room per night (different prices in different locations). Whether your meeting is a conference, an educational seminar, a customer service appreciation or incentive trip, or an annual retreat, holding it in the lap of luxury is a pretty good idea.

“We are encouraging organizations to realize the value of a truly results-oriented meeting,” says sales and marketing corporate senior vice president Bruce Himelstein.

And like the mantra says, it’s worth it if it works!

Business travelers: five pre-flight rituals

by Tom Johansmeyer on

When you take that early Monday morning flight, you know you’re kicking off a marathon. If you’re a business traveler, you’ll have five days of meetings, late nights and team dinners that deprive you of sleep, push your personal relationships to the periphery and generally dominate every ounce of your life. This is the path the business traveler has chosen. So, any measures that reduce anxiety and otherwise make life easier are priceless.

For me, this meant developing a pre-flight ritual that brought me a little more sleep-time, helped me remember to pack everything and ensured that I’d have nothing to worry about once I stepped out the door.

1. Pack to run: Don’t put off packing your bags. Get everything ready the night before, and leave your luggage by the door. Put your wallet, keys and cash in a place where you’ll remember them. I used to put them on my laptop keyboard. Since I checked my e-mail before leaving, I knew I’d see these important items.

2. Check in the day before: You’ll probably get a better seat, and you’ll save time at the airport. Print your boarding pass at home, and put it with your keys and wallet.

3. Get your cables together: Laptop power supply, iPod cable, Blackberry or cell phone charger … bundle them all up in advance. Forgetting this stuff isn’t a disaster, but it is a colossal annoyance.

4. Develop a path: Retrace your steps every Monday morning. For example: bed to coffee maker (turn it on) to shower. Grab coffee after shower, and take it to living room. Get dressed, drink coffee, check e-mail. Pack laptop, and pick up bags by the door. Leave.

5. Stick to your usual transportation: Find one town car company and learn to love it. Use it every week. The company will get to know you, leading to the predictability you crave. And, as it develops a track record with you, you’ll trust it more. That’s one less thing to worry about!

Traveler sentiment up … reality not told about it

by Tom Johansmeyer on

In February, the U.S. Traveler Sentiment IndexTM climbed to 90.2 from 78.2 in October 2008. An increased in the perceived “affordability of travel” is the driver of this trend. Since travel companies are desperate to fill seats and guestrooms, potential travelers are showing a bit more optimism.

The index, which is part of the travelhorizonsTM survey conducted by Ypartnership gauges traveler sentiment and is benchmarked at 100 with a starting date of March 2007. It is derived from six statistical measures.

“We are very encouraged that more people are signaling a willingness to travel for leisure purposes,” said Peter C. Yesawich, chairman of Ypartnership. “This is the first increase we have observed in the Index since January 2008, which indicates that the discounts travel providers and destinations are offering are working to attract more travelers, even in this down economy. As it turns out, this is actually a terrific time to travel because some of these great deals are sure to disappear once the industry begins to recover.”

Yet, the outlook is far from positive. The U.S. Travel Association expects a 5.6 percent drop in business travel this year – revised downward from an initial estimate of 3.5 percent. And, the reason for the increase in traveler sentiment – aggressive price-cutting – isn’t sustainable.