HOTELS

Derek Gale

Companies, Biz Travelers Look To Cut Costs
June 10, 2008

Today's Stats of the Day come from Orbitz for Business and Business Traveler Magazine, which teamed up to survey 610 of the magazine's subscribers online in mid-May. The results are as follows.

First, the good news:

• 60% of those surveyed say they are conducting as much or more business travel in 2008 compared to 2007

Now, the bad news:

• 79% are feeling some degree of pressure to cut travel expenses
• 41% say their companies are tightening travel policies and implementing more restrictions on hotels and dining
• 68% reported staying at less expensive or lower star-rated hotels to save on travel costs
• 67% are more apt to stay at a cheaper hotel if it offers amenities like free Wi-Fi and/or continental breakfast
• 25% say they are flying in and out of a destination the same day more often, versus spending a night in a hotel
• 42% are exploring alternatives to travel, including video or Web conferencing
• 44% report that they or their company plan to attend fewer trade shows this year, or will send fewer people
• 33% say their companies are doing less international travel as a way to save

"This report reinforces what we've been hearing from our customers: Most aren't cutting back on travel; rather, they continue to look for ways to become more cost-effective with their managed travel programs in a cost-conscious economy," says Dean Sivley, senior vice president and COO, Orbitz for Business.

Bill Marriott and his company may be among the hoteliers feeling the effects of these results--he noted at the NYU Hospitality Investment Conference last week that mid-week business transient bookings were softening, and that he expects difficult corporate rate negotiations later this summer and into the fall.

Still, it's not entirely gloom-and-doom: Marriott said international business continues to be strong, with RevPAR up 10% year-to-date, and noted that the domestic defense and technology industries continue to increase their business with his company.

Also, hidden in the stats above is a gem for limited-service hotels: Simple amenities like free Wi-Fi and free continental breakfast go a long way toward driving bookings. So maybe Holiday Inn Express is on to something!

Posted by Derek Gale on June 10, 2008 | Comments (0)