Business Travel Takes off in 2008

According to an October 2007 American Express Global Business Travel Forecast, air travel, accommodations, transportation and meeting facilities will see a sharp increase in demand for 2008.

Expect Travel Rate Increases

Business travel demands will continue to drive an increase in rates, including double-digit hotel increases in certain markets in the US, Europe and Asia.

This poses a challenge for business and travel managers. According to Vice President and Global Leader for American Express Business Travel Advisory Services, Mike Streit, the average domestic inclusive business trip (airfare, care rental hotel) will increase six percent, bringing the average price to $1,100 domestic and $3,171 internationally.

According to the American Express report, domestic economy travel rates are expected to increase five percent domestically and ten percent internationally. Hotel rates are expected to increase up to seven percent for mid-range hotels and up to eight percent for upper-range hotels in the US.

And That’s Not All Folks

Due to the high demand and low supply, business travelers can expect changes in hotel terms as well as price. This may include a minimum or maximum stay requirements.

New Opportunities for Businesses

Due to the historic highs, stricter requirements, and challenges with keeping within a budget, travel and entertainment managers are expected to find ways to save money on meetings and events. This creates new opportunities for businesses that provide affordable travel and entertainment services, or who can offer cost saving conference or event services. Companies are also expected to increase their use of preferred suppliers to maximize benefits and savings.

The report also predicted a fifteen to twenty percent increase in the sale of compliance tracking tools, to help businesses save money.

How to Get the Lowest Hotel Rates for Business Travel

If this is the year that your business is taking a fresh look at reducing lodging costs, join the crowd.

A new survey of travel managers, conducted by Carlson Wagonlit Travel’s Travel Management Institute, puts optimizing hotel spend among the top priorities this year for the travel managers surveyed.

With industry experts forecasting hotel rate hikes this year, many companies are looking for better workforce travel savings and solutions. For many, the solution is putting a lodging savings card in the hands of their employees who travel.

It gives small business travelers access to the low hotel rates that are negotiated privately by lodging management providers for larger corporate clients.

The savings card is particularly aimed at businesses with workforce travelers, those employees who hit the road in boots – not suits – to get the job done. Typically, these travelers stay in economy and midscale hotels like Best Western, Hampton Inn, Ramada, Holiday Inn, Super 8 and Comfort Inn.

No More Bargain Rates
Having an advantage like a lodging savings card is more important than ever this year since hotel deals and bargains are going to be tougher to find.

The January 2011 forecast from PricewaterhouseCoopers said hotel prices will be 5.1 percent higher than last year, citing Smith Travel Research data. Colliers PKF Hospitality Research estimates a 4.6 percent rise.

These rising prices likely will make it tougher difficult for businesses – particularly small businesses -
to negotiate their own low rates.

Finding Privately Negotiated Rates
The key to getting the lowest hotel rates is having enough volume to negotiate a private rate. Small businesses usually are hampered by low volume, which drives the lower rate negotiations that larger companies and lodging management providers can achieve.

Unless a small business is targeting a location where it has 25 room nights or more a month, it can be difficult to get a private rate that is lower than other publicly available prices.

A lodging savings card provides access to those low negotiated rates at thousands of hotels. Many companies find their hotel savings are dramatic, including companies that save thousands of dollars a year.

Savings Card Advantages
The card works particularly well for per diem and seasonal travelers since there is no annual fee or minimal usage requirements.
A company signs up for the card and registers a credit card for billing. Company travelers present the card at check-in to the front desk at any of thousands of participating hotel locations.

The hotel sends the stay details to the lodging management provider that provides the savings card, who then bills the registered credit card.

An invoice statement is posted to the savings card online account, where the company can review it for easy credit card reconciliation. That means no more tracking down hotel receipts or playing detective work with purchase orders.

More than 10,000 smaller companies from the trucking, retail, staffing, energy, food service and other industries already are saving every day.