Buyers Expect Direct Connect to Push Biz Air Costs

Buyers Expect Direct Connect to Push Air Costs
Corporate travel buyers expect moves by American and other carriers to foster direct connections between air carriers and buyers to increase costs and hurt business travel. Among business travel buyers, 89% said they expected direct connect that bypasses traditional distribution systems to increase travel costs. Nearly three-quarters (72%) of business travel buyers believe that moving to a direct-connect system will negatively impact business travel. More than half (59%) said they would be “very concerned” if other carriers followed American’s lead. That’s according to a survey by the Global Business Travel Association (formerly NBTA).

Air Spend in 2010 Soared
If your air spend leapt upward by double digits last year, join the crowd. The International Air Transport Association said international passenger traffic on scheduled carriers soared 8.2% in 2010, despite bad weather, volcanic eruptions and other disruptions. The average domestic air fare jumped 10.7% in the third quarter of 2010 compared to the same period in 2009, according to the Department of Transportation. It could have been worse. The third-quarter fare jump still represents an inflation-adjusted decline of nearly 20% from the all-time high a decade earlier. Airlines ended 2010 ahead of 2008 traffic volume, after having suffered the worst decline in airline history in 2009.

U.S. Visa Hassles Cost Convention Biz Billions
Ever wonder how much visa and immigration policies are costing the U.S.? Here’s your answer: $2.3 billion. And that’s just revenue lost from conventions and exhibitions. A study conducted by Oxford Economics for the Center for Exhibition Industry Research found that 116,000 would-be international attendees either could not get visas to attend U.S. events in 2009 or didn’t bother to apply because of complex and sometimes-costly application procedures. The no-shows meant the loss of $1.5 billion in business-to-business trade, $540 million in registration fees and exhibition space spending, and $295 million in visitor spending.

Acronym Alert! NBTA Becomes GBTA
Time to change the acronym dictionary. The National Business Travel Association (NBTA) changed its name to Global Business Travel Association (GBTA) in early February. Executive director and COO Mike McCormick said the new name better represents the global nature of business today and the global reach of the business travel community.

U.S. Hotel Construction to Remain Stalled
Don’t look for any fast growth in hotel room inventory – regardless of what happens to hotel rates. A new Lodging Econometrics report found that financing for U.S. hotel construction is largely unavailable and unlikely to improve for some time. Lodging Econometrics is projecting that in 2011 just 446 hotels with 46,343 rooms will come online; that’s an increase of less than 1%. Financing is not likely to increase until banks have disposed of their current inventory of distressed loans and hotel performance improves. The best guess for when hotel construction will pick up is 2013, at the earliest.

No e-Cigs on U.S. Flights
The use of electronic cigarettes on commercial air flights is about to be banned by the U.S. Department of Transportation. DOT secretary Ray LaHood detailed the plans in a letter to Sen. Frank Lautenberg (D-NJ), who had asked the DOT to clarify its position on e-cigarettes. The DOT has been telling airlines and the public that current smoking regulations include electronic devices that deliver nicotine but emit no smoke. “We still don’t know the health effects of e-cigarettes, and we don’t want to turn airline passengers into laboratory mice,” Lautenberg told the Associated Press.

Cell Phones to Jam GPS?
A plan to build thousands of cell phone transmitters has set off alarms at airlines, the Federal Aviation Administration, and the Department of Defense. The wireless broadband provider LightSquared, of Reston, Va., received clearance from the Federal Communications Commission to build about 40,000 base stations. But high-power ground transmissions would operate at frequencies that could overload sensitive GPS equipment used by both commercial and military systems, according to the FAA. Objections to the plan have been filed with the FCC, and the FCC is requiring LightSquared to delay service until an independent panel confirms that the new system poses no threat. LightSquared said its combination of satellite and ground-based 4G cell phone service will cover 92% of the US population by 2015.