Sharp growth slowed before oil crunch


November 05, 1990|By Tom Belden | Tom Belden,Knight-Ridder News Service

Even before the price of jet fuel soared this fall, pushing up air fares and placing more drag on the economy, some business-travel trends were developing that were strikingly different from those in recent years.

The sharp growth in business travel by air, which characterized the industry for the last five years, has slowed markedly, preliminary results from a major ongoing study show.

Research found that growth in business travel, after rising sharply since the mid-1980s, began to level off in the first half of 1990, when it registered only 2.5 percent growth. That compared with a growth rate of 9 percent from 1988 to 1989.

If the 2.5 percent annual growth rate for business travel continued in the second half of the year, it would mean a record volume of 174 million air trips in 1990.

But Henry J. Brandt, marketing research manager for Official Airline Guides, which operates travel information publications and services, said in reporting the results that, given the condition of the airline industry and the economy, he was unwilling to make such a prediction yet.

In other words, when all the 1990 data are in, business travel may prove to have slowed even more.

The study, conducted for the industry-sponsored U.S. Travel Data Center by OAG, will involve interviews with 4,000 business travelers conducted between February 1990 and January 1991. The preliminary results were based on interviews with about 2,100 travelers.

The OAG research also indicates a trend toward longer overnight trips. The percentages of trips of one night, and of two to five nights, stayed about the same as in past years. But trips of five nights or more increased from 18 percent to 23 percent.

That dovetails with research earlier this year among corporate travel managers, by Runzheimer International Ltd., that looked at the types of airline tickets being bought by companies.

Runzheimer, a travel consulting firm, found a growing number of companies buying advance-purchase tickets that required the passenger to stay over a weekend, indicating that some were asking employees to stay away from home for a week or more on one trip.

The OAG survey confirmed, as well, some suspicions of many observers about travel patterns: The majority of business travelers do not travel very much. About half of the travelers take just one or two trips a year. About a third take six to nine trips a year; frequent travelers, with 10 or more trips, make up the remainder.

But making sure that the frequent-traveler group is happy remains vital to airlines, hotel chains and rental-car companies, Brandt told a Travel Data Center's travel-outlook forum in Pittsburgh.

The OAG study indicates that membership in marketing programs for frequent travelers peaked last year, with about 24 percent of all travelers participating in airline frequent-flier programs and 13 percent taking part in hotel frequent-guest plans.

Even if the membership isn't growing, that doesn't mean anyone is thinking about dropping these marketing programs or even altering them in a major way, Brandt said. The true genius of the programs is their value in tracking the travel patterns of an airline's or a hotel's best customers, and marketing more directly to those people, he said.

"There is no compelling reason to believe that the industry will do worse than continue to refine and restrict" frequent-traveler programs, he said. "Barring government regulation or taxation, no supplier can unilaterally disarm itself by being the first to drop its program."


Almost nine out of 10 U.S. and Canadian companies let sales and service personnel use company vehicles whenever they want, including taking them home on weekends or out of town on vacation, according to a recent study.

The National Association of Fleet Managers, which collected responses from 645 U.S. and Canadian companies, also found that personal use of company cars had not come free. Eighty-four percent of the U.S. companies and 64 percent of those in Canada charged drivers for the personal miles they put on the vehicles.

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