Travel Takes Big Bite Out of Corporate Expenses

Travel Is Up to 12% of Total Corporate Expenses
Travel accounts for a significant portion of total corporate expenses. But just how significant may be a surprise. According to market research firm Aberdeen Group, business travel accounts for anywhere between 8% and 12% of the overall enterprise expense budget. This is bad news for travel managers whose companies see travel as a cost center, but good news for those whose companies see travel as an investment in revenues. Either way, expect more attention on travel costs and more need to focus on strategic management of travel, not just penny pinching.

Aberdeen identified three key strategies common to best-in-class travel management programs:
•    Support travel management with analytics, integration and mobility

•    Use mobile apps and portals to put expense management directly in the hands of travelers

•    Leverage analytics and integration to drive transparency into travel processes and spending to improve corporate budgeting, planning and forecasting.

Top Routes Capture 20% of Air Travel
Add traffic patterns to the list of reasons air carriers are increasingly turning a deaf ear to contract talks. More than a fifth of all global air travel is concentrated in just 300 city pairs, according to data from Amadeus Air Traffic Intelligence. Each of these super routes carries more than one million passengers annually. That means any one company, no matter what its travel patterns and spend, is unlikely to control enough market share on any of these major routes to make carriers notice. The situation isn’t much better on secondary routes. Fully 69% of all global air travel is between city pairs with at least 100,000 passengers annually.

Switch to Tablets Strains Hotel Bandwidth
Hotels with Internet systems based on laptop use are in trouble as growing numbers of business travelers leave their laptops at home and travel with data-hungry tablets. Expect the same crunch on travel budgets. iBahn, the company that manages Internet and Wi-Fi services for thousands of hotels across the U.S., reported consecutive declines in the number of laptops used on hotel networks over the past three quarters and an even sharper increase in tablet use.

The shift in device use is a challenge for hotels, where systems were designed for laptops that are inactive most of the time and have relatively powerful antennas. Tablets, like smart phones, are almost constantly active. And tablets have relatively small antennas, which means weaker reception, more dead zones and more demand on access points. Hotels are scrambling to meet increased bandwidth demands, in part by segmenting access fees based on connection speed. And because free Internet access is usually at a lower speed that is frustrating for anything more intensive than email, road warriors are feeling more pressure to pay for better access. It may be less costly to negotiate reduced rate high-speed access than free low-speed access that travelers upgrade at full price.

Overseas Carrier Dominate Top Business Class List
The latest list of best business class air carriers is out. Most domestic business travelers are out of luck, according to travel publisher Gayot. Only one U.S. carrier made the Top Ten list, Delta BusinessElite at number two. Air New Zealand Business Premier topped the list. The other eight best carriers, in descending order, were Emirates Airlines, Etihad Airways Pearl Business Class, LAN Airlines Premium Business, Qantas Airways International Business, Oman Air, Singapore Airlines, Thai Airways Royal Silk Class and Virgin Atlantic Upper Class.

Oneworld Enters Convention Market on Limited Basis
Oneworld, the global airline alliance launched by American Airlines, jumped into the meetings market during IMEX, the global meetings and events exchange held in Frankfurt earlier this month. But don’t expect to see much impact. Oneworld unveiled a “one stop shop” for planners, but only if they are sending at least 500 passengers traveling from at least two regions. According to the International Congress and Convention Association, 75% of international meetings have fewer than 500 attendees. ICCA said the average attendance at international events from 2003 to 2012 ranged between 230 and 256. Star Alliance and Skyteam both offer products aimed at smaller events.

More Hotels Offer Free Breakfast
The American Hotel & Lodging Association wants your preferred hotel vendors to kick in free breakfasts. That’s the bottom line from a new AHLA report showing that 79% of U.S. hotels offered free breakfasts in 2012, up from 55% in 2010. Upper tier loyalty customers at Marriott, Starwood, Hilton and other chains typically get free breakfast at all properties. Midprice properties tend to offer free breakfasts for all. Hotels that don’t offer free breakfast could be at a competitive disadvantage, said Adam Weissenberg, the U.S. leader of Deloitte’s travel, hospitality and leisure travel practice. The consulting firm surveyed 4,000 travelers earlier this year and found loyalty programs near the bottom of travelers’ want lists and free breakfast near the top. Free is more convenient and helps stretch already thin travel budgets.

Airlines IT Management Lacking
“The incompetence of IT management within airlines is unforgivable. The airplanes airlines fly are manufacturing plants in real time. But they can’t integrate that information into providing seat repairs while an airplane is being turned around at an airport.” – Richard Eastman, President, The Eastman Group