With the new year upon us, I turned to two close observers on opposite sides of the business travel industry to predict what road warriors will see in 2012.
In one corner we have Lane Dubin, deeply invested in business travel as a vice president and general manager for American Express Global Business Travel. In the other is Chris McGinnis, a travel consultant, blogger and observer based in San Francisco. Their predictions:
Airlines: As companies keep investing in business travel and growth, airlines will continue catering to the business-travel market with ancillary services, such as in-flight Internet, more legroom and preferred boarding, that are of interest to the business traveler needing to get work done en route. Rates will rise to meet the continued demand.
Hotels: Hotels traditionally have followed the ancillary fee system and now are charging for amenities that make a difference to the business traveler. This means road warriors could increasingly be paying additional fees for the services that allow them to be productive while they're away. In 2012, hoteliers likely will focus more on total revenue rather than on occupancy levels, and as a result they may be more willing to accept lower room volume at higher room rates. This translates to hotel rates likely getting a little more expensive this year.
Rental cars: Competition in the rental car market remains stiff, so rates will likely remain flat or even decrease slightly. Businesses also likely will continue to pursue the relatively new trend for negotiating longer-term contracts - as long as three years - in exchange for discounted rates.
Miscellaneous: Mobile technology is going to be a continued focus in 2012 as companies look to make traveling employees more productive, create utility on the road, and help enhance control and compliance during business travel.
We also expect that companies will be challenged to think strategically about how they continue to invest in travel, to grow their business, in the face of flat travel budgets and rising prices.
Airlines: There will be a growing gap between frequent business travelers (who will get better seats, shorter lines, earlier boarding, more access to clubs and fee waivers) and low-fare vacation travelers, who will see more fees and poorer "back of the plane" service.
Hotels: Hotel prices in large coastal cities such as San Francisco, New York, Boston or Washington, where demand is growing fastest, will continue to creep up. However, hotels in smaller, secondary or tertiary markets that are still struggling to recover will offer better deals - and probably better service because they are hungrier for the business.
Rental cars: More business travelers will be turning to rental cars since airlines are abandoning service to smaller cities. They will fly to the nearby larger city and then drive. Nonetheless, the increased demand won't increase rates much in this highly commoditized market where there are too many cars chasing too few renters.
Miscellaneous: While in-flight Wi-Fi has been a largely American experience, airlines in other countries will adopt newer systems based on satellite technology that enable travelers to log on over land and, more important, sea for international flights.
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