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Business Travel Slumps as Small Businesses Struggle

May 20, 2008
Americans' increasing concerns about the economy haven't hurt the leisure travel industry but business travel is taking a hit, according to the 2008 Travel Industry Association annual report, "Travel and Tourism Works for America."

U.S. travelers spent a record amount--$739.9 billion--last year. But it was leisure travel that kept the industry in the red. Business travel declined by about 1.7 percent in 2007, following a 0.3 percent decline in 2006.

Business travelers face even more obstacles in 2008 as airfares and hotel room rates are expected to rise.

American Express projects domestic economy fares will increase this year by as much as 5 percent, while long-haul business class fares are expected to rise by 10 percent.

PKF Consulting projects room rates to rise by 5.3 percent in 2008. And American Express projects meeting costs to increase by 8 to 10 percent.

But there is good news for business travelers. Those who continue to hit the road will enjoy increased perks as desperate airlines and hotels try to keep their business or lure them away from competitors.

Airlines are upgrading passenger lounges, increasing business class comforts and working to streamline security for business travelers.

Even discount carriers Southwest and JetBlue are looking for ways to attract business travelers who regularly eschew their discounts to avoid the pitfalls of a discount airline.

Both airlines now offer fully refundable fares and are among those racing to introduce in-flight Internet access. And Southwest finally is making its fares available through the computer systems that corporate travel managers use to book tickets.

Hotel chains hope to lure business travelers with more amenities - above and beyond those that the modern corporate traveler has come to expect. High-speed Internet is a must, but some hotels are now offering free wireless access-a great perk for a traveler who wants to work by the hotel pool. And many large chains are putting a modern twist on frequent-stay programs by offering room upgrades and exclusive club floor memberships to loyal customers.

But even as these perks accumulate, many businesses, especially small businesses, are faced with the real challenge of keeping their travel budgets under control. Unlike corporate travelers who are backed by expense accounts, small businesses face a much tighter bottom line - especially as the economy takes its toll on all parts of the their business.

Some are cutting travel altogether; others are asking employees to drive to reasonable close destinations. Some companies are even requiring employees who travel together to room together.

If you're not ready to go to such extremes, here are 10 tips for getting a handle on your travel budget from Allbusiness:

1. Create and distribute a clear travel policy.

2. Search the Web for bargains.

3. Volunteer to get bumped if your schedule is flexible.

4. Join your preferred airline's frequent-flier program.

5. Streamline paperwork by creating a uniform reporting system for travel expenses.

6. Meet virtually.

7. Negotiate lower travel and lodging prices.

8. Use a single corporate credit card for all travel and entertainment expenses.

9. Take advantage of convention discounts.

10. Take advantage of tax deductions.

Travel and entertainment expenses are the second largest expense for a lot of companies and many could face serious shortages if the economy continues to falter. While it's time for belt-tightening, there are ways to save money if you just do a little homework.
About the Author
Charlotte Buelow is a contributing business writer for Manta.com, the authority for finding thousands of travel companies worldwide. Use Manta to help find potential customers and partners close to home or across the world.
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