DESTINATIONS BUSINESS TRAVEL
The price
has to be
be right
With costs under the microscope, corporates
are seeking value for money from their
business trips. Nick Easen reports
The global economic slump
means that corporate
expenditure on travel is
now being scrutinised
more than ever. Business
trips – their frequency, length and
levels of comfort – are all aff ected by
the downturn.
Expectations are changing, with
executives caring less about luxury;
instead they are concentrating on
whether a trip delivers the basics for
business overseas – fast internet
connections in hotels, meals in
rooms rather than restaurants, and
public transport from the airport
rather than limousine services.
Since travel is one of the top
fi ve components of corporate
expenditure, it has been a natural
target for cuts. This has implications
for the travel industry, where there
will be new winners and losers, as
well as new ways of thinking.
Eurostar marketing director for
the UK Emma Harris said: “There
is almost an empathetic austerity
going on now, where it’s seen as not
okay to be staying in fi ve-star hotels.
It’s because of the message it sends
out – it’s about showing your client
that times are tough and you are
adapting accordingly.”
Executives are now making
fewer, shorter and cheaper business
trips, according to research
commissioned recently by travel
technology fi rm Amadeus. Internal
meetings have been hit the hardest;
there’s a shift from business to
economy class, budget and midscale
hotels are faring better, there
are fewer trips for junior executives
and only travel that is billed to
clients is surviving scrutiny.
66 | Travel Weekly | March 6 2009
Premier Inn operations director
Nic Brown said: “Business travellers
are looking for value for money.
We’ve moved away from the need
for the trouser press, the mini-bar
and the Jacuzzi in the room.”
Pricing has become a crucial
tool in managing travel from all
sides – the corporate, the travel
management company and the
industry. The major diff erence
between this downturn and
previous ones is that now it is a
much more complex marketplace.
As the general manager at the
Radisson SAS Portman Hotel in
London Tim Cordon explained:
“Where a hotel used to have four or
fi ve diff erent rates, it is not unusual
for a hotel to now have 40 to 50
diff erent rates.”
With real-time technology
solutions from the global
distribution systems, airlines,
hotels and other travel suppliers are
now able to vary their fares rapidly –
and in a volatile market this is
making the booking process for
travel buyers highly variable.
But as Emirates commercial
manager UK David Parker
explained: “If we weren’t changing
our fares quickly, we wouldn’t
be competitive.” TW
Executives are
increasingly
booking
economy class
rather than
business class
LOSERS IN THE
DOWNTURN
● Four and fi ve-star properties that
are not fl exible with their rates
or those who are not able to off er
variable prices to business
travellers – it is all about
eff ective yield management.
● Business travellers in this era
of austerity are more likely to
resent extra charges – especially
unplanned, signifi cant ones –
whether it is for internet usage,
water in the room or disguised
taxes and charges. Upfront,
all-inclusive costs may be easier
to manage than modular ones
depending on what clients use.
● Corporations that are not able
to rein in business travel costs
by enforcing travel policies,
especially for senior executives.
● Corporates who don’t look
to TMCs and travel suppliers
for savings.
● Those in the travel industry who
are not responsive to the needs
of the austere business traveller.
Moving quickly in this new
environment will be crucial.
International travel meetings
have been slashed but domestic
UK travel is still fairly strong.
● Overseas destinations, airlines
and hotels that rely heavily on
British business travellers.
8For more
information
on business
travel go to
www.travelweekly.co.uk
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