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.”

Tourist returns ancient piece of Jerusalem

by Sean McLachlan on

The Israel Antiquities Authority got an interesting package from the U.S. recently, Archaeology News reported. It contained a piece of early medieval stonework and came with a note.

The note said that the sender, who apparently remained anonymous, had been an archaeology student 12 years ago and stole the stone from the excavation he was on so that he would have a memento with which to “pray for Jerusalem.” Instead, it made him feel guilty and so he decided to return it. Sometimes guilt takes a while to work.

At least this idiot had to pay a lot in postage. The stone weighed 21 kilograms (more than 46 pounds) and appears to be a portion of a marble column from the Umayyid Dynasty, a Muslim dynasty that ruled the region from 661 to 750 A.D. The Umayyids had the first major Muslim empire, ruling over a vast territory from their capital in Damascus. They were responsible for building two of the major Muslim sites in the holy city–The Dome of the Rock (pictured here) and Al-Aksa Mosque.

Israeli archaeologists believe the column came from a large palace complex built near the Temple Mount that served as the local seat of government.

As some travelers set off to volunteer at archaeological excavations this summer, this former archaeologist would like to remind them that stealing antiquities is not only immoral, but illegal, and could land you in jail. It will certainly get you an F in your archaeology class.

Creativity abounds if you live outside your homeland

by Tom Johansmeyer on

Science says expats are more creative, so it must be true. According to research published by the American Psychological Association (five studies in all), living abroad opens minds and leads to new experiences – all of which points to creativity. The research will be published in May in the Journal of Personality and Social Psychology.

Of course, the conclusion is a tad obvious, as the people most likely to choose this lifestyle are probably open-minded and eager to accumulate new experiences. The research team made room for this fact by saying that the project’s results do not prove causation.

As quoted in Reuters, lead author William Maddux, Assistant Professor of Organizational Behavior at European business school INSEAD, says, “This research may have something to say about the increasing impact of globalization on the world, a fact that has been hammered home by the recent financial crisis.”

In perhaps the most interesting component of this project, Kellogg Business School MBA students were presented with the “Duncker candle problem,” which tests creativity. The subject is given a candle, a pack of matches and a box of tacks, and the task is to attach the candle to a wall so that it will burn properly and not drip wax on the table or floor. Students having spent more time living abroad were more likely to come up with the solution.

Think you have the right answer? Test your results after the jump.

Solution to the Duncker candle problem:

  • Use the empty box of tacks as a candle holder
  • Tack the empty box to the wall
  • Light the candle

Yep, it seems so easy this way, but it can be a bear when you’re faced with the problem and have to come up with the answers on your own … especially when you’re being watched!

PhoCusWright releases moronic report

by Tom Johansmeyer on

Travel research firm PhoCusWright is trying to get people to buy its latest report by making some (supposedly) bold predictions about travel industry technology trends. Realistically, most of this stuff falls into the “No Shit” category, but alas, Gadling will not make that one of the official labels from which I can choose.

These are some real gems. In fact, I’d be willing to bet my MBA that a backpacker with three joints and a smile could have come up with most of this.

After the jump, you’ll find 10 pearls of wisdom from this research firm. Please, click the link to continue reading. I dare you. You’ll get in a few hundred words what cost me more than 40 grand. The italicized content is from PhoCusWright. The rest is from me.1. Despite Market Woes, Pockets of Investment Still Exist
Okay, Sami Mahroum, Research Director of Britain’s National Endowment for Science, Technology & the Arts (and believe it or not, I’ve shortened his title) says what I’ve been telling people at De La Concha for months: “During economic downturns, innovation is the single most important condition for transforming the crisis into an opportunity.”

In financial parlance, this is just saying that contracyclical investing occurs all the time. If you put your money into what sucks today but which may not suck tomorrow, you have a shot at some big gains. Investing in the flavor of the month doesn’t afford the same opportunities.

2. The Entire Trip Experience Will be “Informationalized”
I lived through the “dotcom” era (with a CMGi company, even … remember them?), and I heard – and said – some pretty moronic buzzwords. But, how can you use stupid catch-phrases in this sort of economy? All that’s missing is a sock puppet!

What PhoCusWright is trying to say is that online companies that provide booking capabilities are going to need to supply information past the financial transaction. Duh. Have you left a review on Hotwire or TripAdvisor lately? This is what the report is talking about.

3. Software as a Service (SaaS), Cloud Computing and Open Source Spawn a New Flock of Innovators
Ummmm, how? I’m sure open source could make me less bald if I don’t have to prove it.

4. Suppliers (Finally!) Provide Personalized Shopping/Booking Tools
The example provided by PhoCusWright is basically what people called the “My Yahoo! phenomenon long before I entered my thirties.

5. Technologies Will Continue to Converge
Yes, and my refrigerator will continue to keep stuff cold. This is natural trajectory. C’mon, PhoCusWright. All the cool research and consulting firms are tired of talking about convergence. Back when I was in the consulting world (left in 2007), we were disgusted with the word.

6. A Flood of New Mobile Travel and Location-Based Applications Come to Market
I’ve been hearing about this since mobile internet company NetMorf (RIP) tried to convince me it mattered. Mobile has come a long way since 2001, but this is more stuff that just makes sense today. Why would you pay for this?

7. Advertising Technology Transforms Travel Distribution
This one’s just stupid, so I give you travel advertising technology in action.

8. Still Searching … for Better Search
Oh, come on …not this typical gripe again. At the end of the day, it’s the searcher, not the search tool. Unless you commit some reasonable time to searching for what you want, you won’t get it.

9. Democratization of Supply Levels the Playing Field
All I can say is that “democratization” is explained by “oligopoly,” “mashups,” “SaaS,” and “the transparency of the internet.” I call it all … bullshit.

10. Business Intelligence and Analytics Move to the Forefront
The moved to the forefront a long time ago. Everyone uses this stuff now. Catch up.

So, here’s the good news. PhoCusWright will let you download “a full and detailed description of the first two trends” free! Wow! They want you to pay for the other eight … to the tune of $350. But, for the price of a mouse-click, you’ve already gotten more.

Gadling exclusive: Online vaca rental market to hit $4.6bn

by Tom Johansmeyer on

Gadling gets the news first. According to a report that won’t be released for another 10 days, online vacation rental bookings are set to soar over the next two years. Thanks to an anonymous tipster, we’re able to give you an early look at this hot corner of the marketplace.

Online vacation rental bookings are expected to exceed $4.6 billion by 2010, according to a study by travel research firm PhoCusWright, which will be published at the end of January (you heard it here first!). That’s an increase of more than 50 percent from last year’s $3 billion. Travelers are voting with their dollars, it seems, preferring the flexibility of accommodation that comes with the rental market.

Currently, there are 1.26 million rental units (homes and condos) available in the U.S. vacation rental market, and 46 percent of them are on the beach or ocean. Obviously, these destinations are popular. Ten percent of the adult population of the United States (21.5 million people) use vacation rentals instead of hotels and spend an average of $1,300 per stay. The merrymakers who book these spaces account for 22 percent of hotel revenue in the United States.

When you think about it, the cost works out pretty well. Six nights in a hotel at $200 a pop will set you back roughly the same amount as the average vacation rental stay. And, let’s be realistic, when is a $200 hotel room only $200? In this tough economic climate, making the up-market move may actually be cost-effective!

The full report, Vacation Rental Market: Poised for Change, will be available for purchase on January 30, 2009.