CI Travel's
Business Travel News You Can Use
February 22, 2011
Happy Birthday to my wife - who completes me! I wouldn't survive without her!
|
|
|
|
|
|
| Greetings! | 
April 20 is the date for the 5th Annual CI Travel Business Travel Seminar. The seminar is designed for corporate CFOs, Procurement managers, travel arrangers and other corporate officers in charge of purchasing and managing corporate travel programs. If you haven't received a Save The Date and registration link, click here. Why should you come to this event? Because we are entering a time when you and your travelers should have access to "full content" displayed in an unbiased environment. There are suppliers in the industry, most notably American Airlines, who are trying to change that. They have a goal of wanting to control consumer behavior and they have been working towards that day. Nationally known speakers like Kevin Mitchell, Chairman of the Business Travel Coalition will be on hand to educate us on what we can do to make sure you have access to full, unbiased content. Linda McNairy, VP for StarCite a leading provider of Meetings Software solutions will be speaking on Strategic Small Meetings Management. Ron Cerko, VP of Enterprise Holdings will be speaking on Quality Measurement - How do you measure yourselves? He'll be speaking about Enterprise's customer service system which has a 95% response rate to their customer surveys. How can your company achieve that high of a result? This is an event that you'll want to invite your CFO or Controller to even - even if they are not heavily engaged in travel management and travel management decisions. I guarantee that anyone attending this seminar will come away with a much deeper understanding of the travel distribution system and what our role as a travel management company is and how we work with the industry's best and brightest companies. Breakfast, lunch and door prizes are included and over 20 of our partners will be in the exhibit area. This year's event is sponsored by Enterprise Holdings. If you have any questions please contact your CI Travel Account Executive or give me a call at 757-535-3236. Thank you for your trust in us! All of the employee-owners at C I Travel wish you a happy and prosperous New Year! Chris Nicholas P.S. - if you have a question or a suggestion for an article, please email me! |
|
|
|
| Airlines Back Down on Fare Latest Fare Increase Attempt | |
Delta Air Lines initiated the increase Monday on its premier class and last-minute fares, with increases up to $120 for a round-trip ticket. Other large network airlines subsequently matched it by raising prices on first-class, business-class and seven-day advance-purchase tickets that can cost as much as $900 for a domestic round trip.
After initially matching Delta's move, US Airways changed its mind and canceled the increase Wednesday. Others - Delta, American Airlines, United Airlines and Continental Airlines - followed suit, according to Rick Seaney, CEO of FareCompare.com, which closely monitors fares.
"I thought (Delta's hike) was overzealous," he says. "They're probing customers. They're also probing the appetites of other airlines. I guarantee you we'll see more probing in the coming days." Airlines closely monitor each other's fares and frequently match any price movements, lest they lose sales to a cheaper competitor. Their attempts to raise fares often fail if competitors don't match them.
With the economy improving and corporate travel departments enlarging their budgets, airlines are emboldened to charge higher fares even as they keep their seating capacity in check. The network airlines' most recent attempt to raise business travel fares was their second in as many weeks. They've also raised fares more broadly - affecting most of their seats and leisure travelers - five times since December. But the airlines' failure this week may be a sign of the tentative pace of the recovery of business travel, which sank along with the economy in 2008.
As airlines raised fares for most of their routes, Southwest Airlines didn't match in two of the rounds, Seaney notes. "If Southwest doesn't participate," Seaney says, "(other airlines) tend to tiptoe around those (routes) to make sure they're at equilibrium with Southwest."
Airlines argue that rising fuel prices dictate higher fares. Jamie Baker, a JPMorgan Chase airline analyst, told the Associated Press that if fares don't rise further, airlines will need lower fuel prices or will have to cut flights and seating capacity to boost their earnings.
Editor's Note - Over the next six to eight months we will see numerous attempts by the airlines to raise fares. It is important to note that airlines usually like to publish these new fares late Thursday afternoon or by early Friday mornings. If other carriers don't match by the following Monday afternoon, frequently the price increase won't stick and the airline raising prices reverts back to the older fare. However, often they will not let clients convert their tickets back to the lower fare if they bought them at the higher fare. They will simply throw the seats into a new "fare bucket" making it impossible for the passenger to get the lower fare. Our software searches for instances where passengers are eligible for the lower fare and will automatically queue the reservation for action by a consultant. This is another value added service from CI Travel that saves you money. |
Travel Warnings Increase for Middle East - Africa Regions
| |
 Recent Unrest in the Middle East is a Cause of Concern for Travelers
Editor's Note: There are numerous reports of violence coming from several countries in the middle east do to popular uprisings going on these countries. The US State Department issues warnings are updated daily at State Department Warnings. Please be aware that WE CARE about your travelers when they are 'on travel.' One function we have as a TMC is the ability to help you with travel security concerns. In the event of an emergency, either natural or man-made, when travel is booked through CI Travel, we can offer you and the travelers assistance. Mega online travel booking sites like Orbitz Consumer, Priceline and Cheap Tickets can't and won't help you on these issues.
As an additional value added service to our clients, CI Travel offers Go24 Alerts. This service sends travel managers up to the minute travel warnings, reports on natural and human caused events that cause airlines to delay, divert or cancel flights, natural disasters and many other warnings that could affect their travelers. The value added service is available to our clients for the nominal fee of $100 per year. For an example of the content, click here. To sign up for the service, please contact Melissa Manfredi a member of our Account Executive staff.
|
Does Increasing Travel Maximize Your Company's Sales
|
Report: Companies Should Increase Travel Spending To Maximize Sales
By Amon Cohen
February 18, 2011
U.S. companies should increase their business travel spend by an average of 4 percent to optimize their sales revenue, according to a report issued by American Express Global Business Travel and GBTA Foundation, the Global Business Travel Association's research division. That extra investment in travel would equate to $72 per employee.
In a series of claims based on econometric analysis of the relationship between travel spend and revenue at 900 public companies from 1998 to 2009, the report's authors concluded that for every $1 strategically invested in business travel, corporations see an increase of $20 in additional gross profit. Data from 2009, they added, "validates" the ratio first calculated for the original Amex-GBTA (then the National Business Travel Association) ROI report issued two years ago. An Amex spokeswoman clarified that "the 20:1 ratio has been steady over the past couple of years. Prior to 2008 the ratio was 16:1." It is unclear how or if data from 2010 would affect the ratio, though researchers claimed that one of their models based only on "expansionary periods shows a correlation between travel and sales that is about 0.5 percent stronger than the model that included recessions."
The report also suggests that U.S. companies reined back on travel too far during the recent recession and the economic downturn consequently was more severe than it might have been.
"Between 2007 and 2009, the U.S. economy lost nearly $926 billion, or 3.6 percent," according to the report. "However, businesses trimmed travel expenditures by $34.6 billion to $237 billion, a 12.7 percent peak-to-trough decline. Analysis suggests that a $31 billion decline in travel budgets would have been sufficient to defend against this measured reduction in sales, resulting in only an 11.4 percent decline in travel spend.
"The difference represents an estimated travel overshoot, or hedge, of approximately $3.7 billion," the report continued. "Had those additional travel hedge monies been spent, top-line sales would have likely been about $26 billion greater. The travel overshoot may have become a self-inflicted wound that made the Great Recession of 2007-2009 worse than it had to be in the U.S."
The new research studied 14 different industry sectors and concluded that business services, entertainment and sports companies typically spend close to their optimal levels on travel, whereas banking, pharmaceutical and retail companies are more likely to under-spend.
According to Amex advisory services research director Christa Degnan Manning, "Ten years ago, travel was 1.4 percent of every revenue dollar; now it's 0.9 percent."
The new report also attempted to predict how much more companies are likely to spend on travel when they open a new location. "A 1 percent increase in the number of locations was associated with an incremental travel budget increase of 0.17 percent," it concluded. "For example, if a chemical manufacturer with revenue between $500 million to $1 billion, 10 locations, and current expenditures (air) of $466,000 decided to add five new [domestic] locations, that company could expect to likely need an additional 8.5 percent more air spend, or about $40,000."
|
| Quick Hits and Quirky News |
Feds Warn Online Travel Companies Not to Bias Air Fares
The Department of Transportation wrote in a recent letter to Sabre Holdings, Travelport, Amadeus IT Holding, Expedia, Orbitz Worldwide and Travelocity that showing bias in the way they display air fares and flight information is a violation of law governing trade practices. The DOT plans to monitor displays and "will, if warranted, take enforcement action," said Samuel Podberesky, assistant general counsel for aviation enforcement at the department.
Under President Obama's Budget, What Happens to Air Fares?
President Barack Obama's budget proposal for fiscal 2012 includes an increase in the "passenger facility charge," which finances airport projects. The fee has a maximum rate of $4.50 per flight, but the White House wants to increase the cap to $7. The increase is being proposed to offset cuts to airport grants. Meanwhile, high-speed rail projects would get more funding. What Says the House...
On Friday, House Transportation and Infrastructure Chairman John Mica, R-Fla., released the House version of the FAA reauthorization bill. "This is a lean bill that recognizes our current budgetary difficulties and the need to do more with less," Mica said in a statement. "This bill saves $4 billion, requiring FAA to find significant cost savings without negatively impacting safety." The House measure does not include a passenger facility charge increase or labor provision opposed by FedEx and UPS, and it would phase out the Essential Air Service program except for Alaska and Hawaii. ATA President and CEO Nicholas E. Calio praised Mica for "crafting a bill that recognizes the critically important role that airlines play in driving the economy and job growth and takes measures to promote global competitiveness of the U.S. airlines while not further harming an industry and its customers already overburdened with taxes."
From the 'I don't know if Managed Travel saves Money Department" The state of Alaska's procurement department in 2004 sought contracted rates from the state's largest air carrier only to be rejected on the basis of a poorly managed travel program. During the subsequent six years, the state implemented a fully end-to-end program for its $60 million annual travel spend, secured a contract with Alaska Airlines and saved a total of $11.6 million.
|
Here a Fee, There a Fee, Everywhere a Fee We See
|
 Another day, another dollar - or so it seems when it comes to airline fees. The extra fees airlines began charging for checked bags three years ago are rapidly multiplying, tacked on to everything from flying standby to a hot meal. Now as more corporate trekkers return to the air after many were grounded during the recession, companies are struggling to keep up with the array of charges while trying to determine what they'll pay for and what they won't. "Airline fees are like death and taxes; just what can we do about them anyway?" says Ron Mazurek, a field service engineer based in Maricopa, Ariz. "Of course I have to accept them. I hate walking to job sites." US Airways recently boosted its fee on overweight luggage from $50 to $90 for coach passengers who booked their flights after Feb. 1 for domestic and some international trips starting in March. The heaviest bags, weighing 71 pounds or more, will cost an extra $175, up from $100. Airlines continue to charge extra for more space in coach. Delta recently announced that for another $80 to $160 one way, passengers flying internationally this summer will be able to buy seats that recline farther and have more legroom in a new premium section dubbed economy comfort. "These fees are going to stay, and they will grow in importance for the airline industry, especially when we see fuel prices begin to creep up again," says Jay Sorensen, a consultant who is an expert on ancillary fees. "Airlines are unable to push through fare increases that match cost increases when the price of fuel is jumping up.. .. la carte fees work very well to fill that gap." Getting accustomed to fees Charges for what was once free or available on a first-come, first-serve basis are now part of the cost of doing business as companies ratchet up travel after dramatically cutting back the last two years. American Express Global Business Travel estimates that the amount spent on business travel worldwide will increase 7.9% this year; it fell 8.8% in 2009. One reason for the surge, some travel and business experts say, is a realization that not traveling ultimately may cost more than it saves. A CareerBuilder.com survey taken at the end of 2010 found that 37% of companies that had cut back on corporate trips believed it had hurt their business. Now, more are getting back on the road but trying to take all those extra fees into account. "Definitely we're seeing updates on policies and guidelines with some businesses," says Rosemary Haefner, vice president of human resources for CareerBuilder.com, an employment website. "Where companies are having a tricky time is, you can't always anticipate when an airline passes on a fee. And if there's a lot of travel at your organization, it will have significant impact on the budget." It's a lack of clarity that is driving many businesses up a wall, says Kevin Mitchell, chairman of the Business Travel Coalition. (Come and hear Kevin at the 5th Annual CI Travel Business Travel Seminar on April 20.) "It's the No. 1 concern," Mitchell says. "If you're a travel manager and looking at a $125 fee lumped in as 'miscellaneous,' you don't know if that was for something like checked bags that was within policy compliance or whether it was an upgrade to business class." Unlike fares, fee information is not universally available, so businesses can't compare them from carrier to carrier. "Corporate travel managers aren't opposed to these fees, for the most part," Mitchell says. "The problem is they're hiding these fees and causing all kinds of havoc with managed travel." Pay for this, not that Mazurek says that with the economy still struggling, his company won't pay extra for in-flight Internet access or seats with more legroom, "but overweight bags are a natural part of doing business for us." Kimberly Miles, a public relations manager based in Myrtle Beach, S.C., says she doesn't mind paying for extras on low-cost airlines, which offer less-expensive tickets. "What bothers me," Miles says, "is when a regular carrier (tacks) ... on high baggage fees or seat-reserving fees when I'm already paying a high ticket price." Ty Francis, a New York-based magazine publisher, decides what extras he'll spring for on a case-by-case basis. "It depends on who's flying and where they're flying to," he says. The company may pay for extra legroom if a staffer is going from a plane to a meeting, he says, but probably not for an employee staying a night in a hotel before conducting business. "Checked bags, that's a business expense," he says. "We can't help that. It's things that you could live without that we try and rationalize." |
Ground Transportation News
| |
Avis Budget Goes from Red to Black in 2010
Avis Budget Group, Inc. yesterday reported results for its fourth quarter and full year ended December 31, 2010. The company reported full year revenue of $5.2 billion, an increase of 1% compared with 2009. Excluding certain items, Adjusted EBITDA increased 69% to $410 million and pretax income increased to $158 million.
Reported pretax income, which includes debt extinguishment costs, was $72 million. All three of the company's operating segments reported significant growth in Adjusted EBITDA in 2010, and the company's Adjusted EBITDA margin expanded by 320 basis points compared to the prior year, excluding certain items.
Hertz Rent2Buy Inventory Available Through UsedCars.com Site
Hertz Rent2Buy, the Hertz Corporation's online car sales program, has partnered with Dealix, a provider of automotive customer leads for new and used cars, and its flagship site UsedCars.com, to allow customers the opportunity to search for Hertz Rent2Buy vehicles through their website. Over 25,000 Hertz Rent2Buy vehicles in nearly 30 states are currently available to shoppers on UsedCars.com. The site, which has doubled the number of used cars available to shoppers in the past 12 months, features more than 700,000 used car listings from most of the nation's leading auto manufacturers. "In just over a year, the HertzRent2Buy program has become an important option for used car buyers," according to Mark P. Frissora, chairman and CEO of Hertz. "We are delighted to work with UsedCars.com to provide an additional outlet for our customers to find these vehicles." Hertz Rent2Buy offers consumers direct access to vehicles that originated from Hertz's fleet of cars, trucks and SUVs. Interested buyers can reserve a vehicle to test for three days and if the consumer later purchases the car, the rental fees for the three-day trial are waived. In addition, each Hertz listing on UsedCars.com provides a link to the Hertz Rent2Buy web site where consumers can complete a reservation to test the vehicle.
|
Lodging News
|
 New Hotels Come on Line in International Cities
The W Hotels division of Starwood opened two hotels on the same day on Monday (February 14). Both are on islands, but neither are resorts. The W London is a 192-room property on Wardour Street in Leicester Square. And the 405-room W Taipei is in the central business and government district of Xinyi. The Ritz-Carlton division of Marriott opened a 267-room property on Wellington Street in Toronto. It's the first purpose-built Ritz-Carlton in Canada, the home of its arch-rival Four Seasons. (By the way, the 99-year-old Ritz-Carlton in Montreal is not aligned with Marriott's Ritz-Carlton.) Speaking of Marriott, a 150-room Courtyard has opened in Kazan, the capital city of Tatarstan, Russia. The DoubleTree division of Hilton has opened a 171-room property in Istanbul. It's a conversion of a commercial building in the city's Old Town district.
Marriott International and Hyatt Hotels Report Corporate Rate Hikes
Both Marriott International and Hyatt Hotels Corp. are reporting corporate rate increases in the high single digits as they wrap up negotiations for 2011 hotel programs.
In its fourth-quarter earnings call, Marriott CFO Carl Berquist said negotiations at Marriott are about two-thirds complete and are "running up at a high-single-digit rate over 2010." Berquist also said that the company projects the business travel recovery that began last year-corporate room nights at Marriott properties increased 16 percent year over year in the fourth quarter-will continue this year.
Similarly, Hyatt CFO Harmit Singh said that a majority of Hyatt's corporate rate negotiations are complete, with most seeing "a mid- to high-single-digit increase in 2011, in line with what we stated."
Hyatt reported a net income of $6 million for the quarter, compared with a loss of $12 million in the fourth quarter of 2009. Marriott's reported net income for the quarter increased to $173 million from $106 million the year before.
The Cosmopolitan Hotel - Las Vegas
The Cosmopolitan of Las Vegas, between CityCenter and Bellagio, opened only recently and has already faced more than its share of challenges. Internal issues, including foreclosure and a change in ownership and concept, added to the external challenge of the economic downturn. The casino-hotel is open, however, and guests are discovering that the 2,995-room property -- with 13 restaurants, a few pools and lots of technology -- is more like a boutique hotel.
Editor's Note: I attended an industry meeting two weeks ago at The Cosmopolitan. According to the General Manager, the resort hotel was built for the "Curious Subset" of travelers. If you don't believe it, go to YouTube.com and see their commercial. The suites are exceptionally well appointed and the bathrooms are something I'm sure all of us would want at our homes! The restaurants and shops are very different from all the other hotel offerings in Vegas. And believe it or not, the Casino is in the back of the lobby area, not even within eyesight of the hotel lobby. You wouldn't even know that they had a casino; but hey, it's Vegas.....there is a casino everywhere!
|
| Airline News | |
News from Delta Air Lines Experts are lauding Delta Air Lines' move to eliminate expiration for its frequent-flier mileage program. However, the change is expected to affect only infrequent travelers, and other airlines are not expected to follow. "Now that our massive frequent-flier program integration is complete, we are focused on smart ways to improve the SkyMiles program for all members," said Jeff Robertson, vice president of SkyMiles. "We know how much customers value their miles, so eliminating mileage expiration is a major win for them."
Also from Delta:
Delta Air Lines believes its $2 billion facilities investment will help it compete with the top-tier airlines in Asia, a crucial and fast-growing travel market. Renovated airport lounges, upgraded BusinessElite seats and a new premium economy section will help position Delta as a premium brand, says Vinay Dube, Delta's senior vice president for the Asia Pacific. In recent years, "We haven't had the cash flow to invest," he told reporters in Tokyo. "Now we do."
SkyTeam Alliance Trying to Lure Virgin Atlantic
Air France-KLM and Delta Air Lines reportedly are striving to persuade Virgin Atlantic to join the SkyTeam airline alliance. "Virgin Atlantic is a strong, independent business with a good growth position at both London Heathrow and Gatwick [airports] so we are not surprised that there is interest in us," Virgin said in a statement. Founder Richard Branson continues to hold a 51% stake, while Singapore Airlines owns the other 49%.
News from Continental Airlines
Economy Plus seating is coming to Continental following its merger with United. The airline will begin adding 40,000 of the roomier seats to its aircraft beginning in 2012. Economy Plus, which offers five inches of added legroom over Economy, has been a hit with United passengers since its debut about 10 years ago.
News from Southwest Airlines
Southwest Airlines is the latest carrier to increase prices as a result of rising fuel costs. The airline announced that it will increase round-trip pricing by $10. The hike follows similar announcements by other airlines
Southwest's New Rapid Rewards Program Says 'Show Me the Money'
Southwest Airlines on Thursday (January 6) unveiled details of its new, long promised and long-overdue Rapid Rewards program. The big news: It is a totally dollar-based plan and travelers earn and burn points based on the price of tickets. The new program doesn't launch until March 1 and Southwest has launched a new Web site to explain the changes. But here are some highlights:
News from United Airlines United Airlines has begun using hand held mobile computers to scan boarding passes and credit cards to determine if a customer needs to stay in line or can use a self-service kiosk. The devices can also obtain flight information from other airlines. United hopes this new technology will cut down wait times and ease frustrations during the holiday travel season.
News from AirTran Airways AirTran Airways will fly seasonal service to Bermuda from its Baltimore-Washington International and Atlanta hubs. The BWI flights will operate from April 7 to October 24 and the Atlanta service will run between May 26 and September 6. |
| Airport News |
Rick Bayless, who dominates Chicago's dining scene with his Frontera Grill, Topolobampo and Xoco Mexican restaurants, has expanded into the airport arena. His Tortas Frontera sandwich shop is now open in the B Concourse of Terminal 1 at Chicago/O'Hare. Our own Mister Meatball, Ralph Raffio, was on the scene and he's posted some photos here. Raffio's report on the $8.50 egg and chorizo breakfast sandwich? "It's at least twice the size of sandwiches [they serve] at McDonald's. Half would be enough for a lot of people." Like most airport food outlets, Tortas Frontera is a franchise, run by HMS Host, which operates dozens of brands. Another Bayless restaurant operated by HMS is due to open soon in O'Hare's Terminal 3.
|
|
|
C I Travel Management's employee/owners are extremely grateful for your trust in us to assist your organization in achieving a higher return on your travel investment. Our philosophy is that when you grow - we grow. It is our responsibility to help you meet and surpass the goals you've established for your travel programs and to assist your travelers whenever necessary. We thank you again for the opportunity to serve.
Sincerely,
Chris Nicholas
Vice President - Sales
|
|
|
|
|
