Study shows air travel abating before Iraqi crisis forced fares up

Business travel

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

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.

Preliminary results from a major, ongoing study show a marked slowing of the sharp growth in business travel by air that characterized the industry for the last five years.

The study, conducted for the industry-sponsored U.S. Travel Data Center by Official Airline Guides (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 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 OAG, 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 for the year than in the first six months, he said.

The OAG research also indicates a trend toward longer overnight trips. The percentages of trips of one night and two to five nights stayed about SC0 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 remains vital to airlines, hotel chains and rental-car companies, Brandt noted in a recent presentation in Pittsburgh at the Travel Data Center's annual travel-outlook forum.

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 schemes or even altering them in a major way, Brandt said. The true genius of the programs is their value in tracking the travel national 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;frequent travelers ,with 10 or more trips,make up the remaining number.

But making sure that the frequent-traveler group is happy re-patterns of an airline's or a hotel's best customers and marketing more directly to those people,he said.

"ther 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 regulations 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, the study found.

The association, which has 2,000 members that buy about 2.7 million vehicles annually, added that such personal use of company-provided vehicles accounted for almost 20 percent of the vehicles' total monthly mileage.


Homewood Suites Inc., a new chain of hotels that markets itself to long-stay business travelers, has joined its sister company, Hampton Inns, in offering the equivalent of the money-back guarantee that comes with many consumer products.

The chain's "Suite Assurance" promise says that if a customer isn't completely satisfied with every aspect of a stay, there's no charge for the night there was a problem.

Homewood Suites and Hampton Inns, which were started by Holiday Corp. and now are units of the Promus Cos. Inc., say they have given every hotel employee the power to make the money-back offer to guests.

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