Road warriors delivered last year, business travel coming back

by Tom Johansmeyer on

Last year is closed, but we’re still sorting out what it all means, especially as the data continues to come in. For business travel, 2010 was expected to be a turning point, as corporations shook off the aguish associated with the global financial crisis and started to send employees back out on the road again. Following a 14.1 percent nosedive in business travel in 2009, 2010 appears to have delivered a small up-tick, as expected.

According to the National Business Travel Association, the corpie folks spent 2.3 percent more on travel last year than they did in 2009, which was a truly dismal year. Spending levels are still below what we saw in 2008, consequently, but there’s more recovery in front of us: the NBTA forecasts a 5 percent increase in business travel spending in 2011.

Michael W. McCormick, NBTA Executive Director and COO said, “Our research is ringing in the new year with reason for cautious optimism. Based on the way 2010 began, the year wrapped up better than expected thanks to a number of factors including higher than expected GDP, stronger exports and very strong corporate profits. These trends are translating into greater business travel spending as companies invest in travel to drive revenues and compete aggressively in a recovering economic environment.”
He added, “International outbound travel in particular remains strong and should continue to grow through 2012 as American companies seek opportunity in robust export markets,” continuing, “2011 should also see a welcome recovery in the group travel market after a number of very difficult years. Companies are once again recognizing the value of face to face meetings with customers, prospects, partners and colleagues to build relationships and set the stage for top-line growth.”

International business spending was the tip of the spear last year, with outbound U.S. business travel spending estimated to have climbed 16.9 percent last year. In 2009, it fell 32.1 percent. Again, last year’s estimated gains weren’t enough to recapture all that was lost 2009, but it is a pretty solid starting point. According to the NBTA statement revealed to Gadling, look for a smaller gain in 2011, only 3.2 percent, because of a weakening dollar.

For the first quarter of 2011, the NBTA expects $58.8 billion to be spent on business travel in the United States, up slightly from $58.7 billion in the fourth quarter of 2010. This is also 6.7 percent above the $55.1 billion spent in the first quarter of last year. Look for business travelers to take 109.9 million trips in the first quarter of this year, up 8.6 percent from 101.2 million in the first quarter of last year.

Business travelers are coming back, which is great news for the airlines. After all, this is where they make their cash. Maybe if these deep pockets start to throw a bit more money at air travel, we’ll have a shot at holding off the introduction of more airline fees!

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Sabre pushes American Airlines down, “all out war” [BREAKING]

by Tom Johansmeyer on

And, the developments just keep coming. The latest in the airline booking battle is that global distribution service Sabre has given American Airlines a bit of a shove nudge. According to a statement from the Business Travel Coalition, “Sabre took steps to protect the interests of an independent travel distribution system from American Airlines’ (AA) attempt to impose a new model that heaps huge new costs on the travel industry and diminishes comparison shopping for consumers.”

Specifically, Sabre has downgraded offerings from American Airlines and elimited booking fee discounts. Also, according to the Business Travel Coalition statement, Sabre has “delivered notice of termination of its agreement with AA.”

With this move, which the BTC says “began with AA’s unprovoked assault on Orbitz late last year,” the situation is not a skirmish “but rather an all out war for the future of both airline and all travel distribution in the U.S. and around the world.”

This is the latest move in a battle over brand and customer ownership, which you read first on Gadling a month ago.”The stakes in this conflict are clear: either an improved airline industry and distribution marketplace centered around the consumer, or one that subordinates consumer interests to the self-serving motivations of individual airlines endeavoring to shift costs and impose their wills on consumers and the other participants in the travel industry,” said BTC Chairman Kevin Mitchell.

He added, “Single-supplier direct connect proposals, like the one advanced by American Airlines, can significantly increase costs for all distribution participants and cause massive fragmentation of airfares and ancillary fees depriving consumers of the ability to compare the total cost of air travel options across all airlines.”

According to a BTC survey of corporate travel managers, 98 percent do not support the American Airlines Direct Connect strategy.

“Since the U.S. global distribution system industry segment was deregulated in late 2003, the strategic interests among GDSs, travel agencies, travel management companies, corporate travel managers and consumers have evolved into near-perfect alignment,” Mitchell explained. “Because the airline industry is one where competitors often follow one another, it is of paramount importance that corporate travel managers, individual supply chain participants, including the associations that represent them, stand up and very clearly communicate to the airlines what their distribution system requirements are.”

A new place to spend euros: Estonia

by Sean McLachlan on

One of the greatest boons to travelers in recent years is the expanding eurozone. Gone are the days when you spent a few days in France, then wasted money getting your francs exchanged into lire in order to visit Italy. There were always a few odd coins left over that ended up sitting useless in the sock drawer.

At the start of 2011, Estonia has become the 17th country to join the eurozone. The kroon will soon become a memory as the old currency is phased out.

While this is good news for travelers carrying euros, it could carry a hint of future trouble. Many countries that adopted the euro saw prices rise as shopkeepers rounded up in the exchange. This is what happened in Spain, and prices never stopped rising. What used to be a budget travel destination soon became almost as expensive as the rest of Europe. Living in Madrid I’m constantly hearing Spaniards complain about how much more expensive things are these days.

Estonia has also become a budget travel destination in recent years. The Baltic republic may be small with only 1.3 million people, but it has an interesting history, some beautiful countryside, and a distinct culture. Hopefully it won’t get too expensive to experience all that.

Lies, discrimination and combat: American Airlines claims sales increase post-Orbitz

by Tom Johansmeyer on

Yesterday, American Airlines announced that it was thanking its customers for their continued loyalty to the airline. It was a fairly predictable move, following the airline’s decision to pull out of Orbitz … which was followed quickly by Expedia’s making it more difficult to find American Airlines fares.

At the same time, the company engaged in a bit of chest-thumping – again, expected in this environment – claiming that overall ticket sales are up year over year since December 21, 2010, when it yanked its flights from Orbitz. Two days later, according to the statement, Expedia.com began discriminating against American’s flights and schedules by listing them lower in the search display than those of other airlines.”

“Our results to date show that consumer choice is alive and well and that our customers continue to have thousands of options to purchase American’s competitive fares and convenient schedules,” said Derek DeCross, American’s Vice President and General Sales Manager. “It is also clear to us that other online travel sites and traditional travel agencies are capitalizing on this market opportunity to gain business. Beyond that, we want to thank our customers and travel partners for their continued loyalty and support. We appreciate your business.”The airline says it’s committed to a wide range of distribution channels, as DeCross added, “Traditionally, airline products have consisted of different flavors of airfares. In the future, however, we envision the world of travel evolving into a much wider variety of products and services beyond fares. Our direct connection will help travel agencies help their own customers by giving them access to customized choices and delivering the best value to travelers. We do not envision a future in which we only sell to our customers through our own branded website. Our goal is to have broad distribution channels and choices for our customers, with our products and services delivered efficiently and without unnecessary costs flowing through the process.”

Okay, so that’s one side of the story. Fortunately, the Business Travel Coalition has weighed in with some comic relief another perspective. In a dramatic statement, written in a style I’ve only seen offered seriously by the Korea Central News Agency, the coalition says, “American Airlines’ (AA) press release distributed this afternoon [referring to December 29, 2010] regarding increased bookings since it pulled its fares out of Orbitz, and had its fares presentation downgraded in Expedia, has a hole in it large enough to fly an Airbus 380 through.”

According to the Business Travel Coalition, the bump in sales is attributed to the fact that American Airlines emailed a special offer to Orbitz customers that included a 20 percent discount on fares purchased before the end of the year on aa.com – which, if nothing else, is a savvy marketing move. Expedia customers received a 15 percent discount with the same timeframe.

Of course, the statement ratchets up the intensity a bit, saying these “targeted sales initiatives [were] instituted just after the combatants’ actions were taken.” Gotta love it: “combatants.”

In fairness, I characterized the struggle using war imagery as far back as December 6, 2010, when it was clear that a significant struggle between the airlines and online travel agencies was brewing.

So, the Business Travel Coalition continues, “In such a price-sensitive environment for consumers, discounts of this magnitude no doubt increased AA’s bookings likely masking the true negative impact of its actions and business predicament. Indeed, these discounts represent the price AA now has to pay to maintain market share.”

And now it’s time for the reality check: everybody’s posturing. And, it’s obvious. American is eager to show that it made the right move in a contentious marketplace that’s only going to become more so. The Business Travel Coalition has made its near-term mission the push for American to return to the online travel agency fold in a manner consistent with the rest of the industry. Both sides want to show that they’re right, and we get to watch.

Five ways holiday travelers annoy business travelers

by Tom Johansmeyer on

On December 23, 1999, I was trying to get from Madison, Wisconsin to Boston Massachusetts. On paper, it didn’t look hard. I had to catch a short fight from Madison to Chicago and another flight from Chicago to Boston. Unsurprisingly, it was snowing in Madison. It was also snowing in Chicago. Flights were canceled quickly and routinely, and crowds backed up in the gate areas. I was starting to wonder if I would make it home in time for Christmas. I finally made it back some time on Christmas Eve, but it was stressful … and yet another taxing holiday experience in what had become a blur of them.

Holiday season travel is rarely enjoyable for anyone, but it can be particularly brutal on business travelers. The pressures of family holiday obligations converge with business demands, and it all comes on the back of a full year of hitting the road, which can mean 40 weeks or more of round trips and enough miles to have nailed platinum status by the end of the second quarter. The one thing business travelers cling to is efficiency. Even if it doesn’t buy much in real impact, it feels better to get through security faster, board the plane smoothly and make a quick exit from the plane and airport upon arrival.

And holiday leisure travelers just make that exponentially more difficult.The folks who travel once or twice a year – or even less frequently than that – tend to throw a monkey wrench into the finely honed travel operations of road warriors. They fumble for documents at airport security checkpoints, take forever to order something as simple as a slice of pizza (how do you choose from both those toppings?!) After a while, the white-collar traveler, perpetually exhausted anyway, begin to hatch conspiracy theories about how leisure travelers are all in cahoots, intent on making his life miserable when all he wants to do is get home and rack open a bottle of holiday cheer.

So, let’s take a look at five ways you can annoy business travelers this holiday season. I’m not suggesting that anyone on either side of this dynamic engage in any behavior modification … because we all know that isn’t going to happen. But if you decide to try – to annoy either less or more – this is how you can go about it:

1. Your kids: I know this is a tough one. If the end-to-end air travel process is difficult for adults on a good day it’s even harder (a) during the holidays, (b) for adults with children and (c) for children. It really does suck. Do what you can, and make an honest effort. Don’t let your kid “cry it out” or practice his first step. You can give up on good parenting for a few hours without causing any lasting damage. Please try to avoid saying, “It’s only for a few hours; we don’t travel often,” to a weary business traveler.

2. Your awareness: is the airport security line moving forward without you? Do you wait until you’re at the x-ray machine to realize you need to remove your coat and shoes? You could turn around to see the eyes rolling, but that would just consume even more time. This also goes for your trip to the food court. Be ready ahead of time, or expect someone to say something.

3. Spread out: take extra seats in the gate area – for your bags or anything else. And then, let your kids play on the floor between seats, so nobody can walk by. The gate area is crowded already, and this is just a heroic way to make a bad situation worse.

4. Camp near a power outlet: it’s hard enough to find a place to plug in, and business travelers are desperate for the short supply. So, be sure to take up this prime real estate … even though you don’t plan to use it at all.

5. Sense of entitlement: assume the same sense of entitlement that road warriors have. And, I’m actually encouraging this one. Nobody really has a right to feel this way, but it is a formula for some incredible street theater!

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