Business Travel: What’s ahead for the next one to three years
A recent poll of pundits, senior travel executives and veteran road warriors produced a laundry list of opinions on what’s ahead for the estimated 38 million travelers who take 210 million business trips and how their world will change in the next one to three years.
The futurist view
Ken Harris, a vice president of the World Future Society in Washington, D.C., who spent 25 years in top posts with the Federal Aviation Administration, sees the continued need for face-to-face contact with customers. “You need to look the person square in the eye and press the flesh,” he says. But after that first or second encounter, businesspeople can “build and nurture the relationship through telecommunications.” Harris isn’t just betting on teleconferencing and e-mail. He says an experimental technology called Haptics, which its creators claim can transmit emotions and feelings from your fingers over the Internet to a recipient, can build long-distance relationships.
He has more grim predictions for airlines, hotels and car rental companies. The futurist forecasts a slowing in the growth rate of travel, but not a falloff. As the baby boomers retire, the Gen X, Gen Y and Gen Zers will become increasingly comfortable with cyber meetings and will “look to technology for travel substitutions.” Meanwhile, Harris says, tightly scheduled senior executives who have to visit plants, processing centers, customers or prospects in smaller towns will opt for using private jet companies like Flex Jet and Net Jet.
On the rebound
But travel executives and analysts aren’t so pessimistic—at least over the next 12 months. Business travel, they say, is on the rebound and the demand is pushing prices up. Hotel occupancy grew 2 percent nationwide last year, and Smith Travel Research predicts another 2 percent growth this year. “But we expect [hotel] rates will grow faster than occupancy this year,” says Brian Ferguson, vice president of marketing and strategy.
Carole Devine, president and CEO of the National Business Travel Association (NBTA), sees 5 percent price increases across the board; airline tickets, hotel rooms, car rentals and restaurant prices will all be going up. That’s still lower than some forecasts of 6 percent to 17 percent rate hikes in hotel rates, made by respected analysts, including PricewatershouseCoopers. Devine, who is corporate travel director for BNSF Railway Co. of Fort Worth, Texas, says large companies will still be able to hammer out travel discounts for their employees. But individual business travelers who don’t have the negotiating leverage of a big company behind them will have to be canny consumers. Many already are. The NBTA says 86 percent of business travelers flew on low-cost airlines in 2004, more than double the 40 percent who flew discounters in 2000.
Bottom line: If money counts and you can afford the time, step up your online shopping and sleuth out deals and steals. One of many good examples for international travelers is Lan Chile’s automatic free upgrade to business class for travelers buying a full-fare coach seat.
Aside from Delta and American’s widely publicized simplified and discounted fares, the biggest change in travel continues to be hotels, which are becoming real homes away from home. Triggered by Westin Hotels’ Heavenly Bed, greater attention to travelers’ comfort is happening everywhere in the hospitality world, from roadside motels to luxury hotels.
The hottest growth is in the so-called “midmarket limited-service” sector, which has always been industry code for something between a hotel and a motel that’s priced around $100 a night but can be a lot costlier. Choice Hotels International, best known for budget lodgings, raised the bar in January by announcing a new hotel brand called Cambria Suites. For around $100 a night, it sounds like it a business traveler’s wish come true. All Cambria Suites have a living room-workroom with a separate bedroom, two plasma televisions, nicer bedding, ergonomic desk and chair, fridge, microwave, free wired and wireless Internet access in the room and in the lobby and gratis local calls. The “clubby” lobby will have a cocktail bar, a coffee bar, hot and cold buffet breakfast, fitness center, indoor pool, convenience store, faxing, copying, printing services and power and Internet ports.