Travel Editor: Climate Changing for Business Travelers

Heather Morgan
National Geographic News
January 17, 2003

Airlines have long overcharged business travelers. But with more executives these days relying on smaller carriers like Southwest or ATA for cheaper rates, giants like United are slashing some business fares by 40 percent. Do business travelers really win in this competitive climate? Yes and no, says Traveler Editor in Chief Keith Bellows. Here's why.

What do these fare cuts really mean for business travelers?

The travel industry in America has been built on the backs of business travelers. And the entire pricing structure, whether you're looking at airlines, hotels, or rental cars, is predicated on business travelers paying a premium. That day is over. And many people are questioning whether the model used by such airlines as Southwest is right for everyone. For instance, the hub-and-spoke system, in which passengers are transferred from smaller capacity flights to larger planes en route to their destinations, is crumbling. Smaller communities like Knoxville Tennessee, really don't benefit from this system. What will help them is point-to-point airline service. Which I think will come. Business travelers are in a position to dictate such policy. So this could be the beginning of a total restructuring of airline price strategy.

Is 40 percent a significant discount?

No, because the fares are already so high. At times, business travelers must shell out triple what vacationers pay to fly. But there could be greater savings down the road. The real issue is that travelers are used to being charged one price for all of the services that airlines offer, from baggage handling to food on the flight to security. In the future, airlines may charge a ticket price and then tack on additional fees. We're already seeing this a little bit with Southwest: you choose your meal from a menu and then pay for it on top of what you've already paid for your ticket.

Will leisure travelers end up paying more?

Yes. The travel industry has trained people to expect lower prices. But now that the airlines can't get business travelers to subsidize leisure travel, leisure travelers will have to shoulder the burden. So travel on peak routes this summer won't be cheap. But there will be high demand. People who have been forgoing that trip to Europe are going to want to go this summer, and they're going to pay for it.

Is there any way for leisure travelers to fly but still save?

Travel in the off season. Not only is it cheaper but you will also encounter fewer Americans. And you will see the culture much as the locals do. Right now it's not exactly peak travel season in Paris, for example. But if you go you'll find that it's still fabulous and the prices are lower. It's a bit dreary but so what? If you're saving a couple of grand on airfare and a hotel, what's a little dreariness? Also, be flexible. The airlines still price seats competitively when they have excess inventory. So go online and be willing to check back on an hourly basis because rates will change. And be ready to fly when the airlines want you to fly.

Do air-inclusive hotel packages help cut costs, too?

There's no doubt that consolidators can give you the best deal. Say you want to go to Ecuador. You can book a package before you go, or save up to 50 percent by booking a package on the street in Quito. It all depends on how you like to travel. The drawback with packages, though, is that you often get stuff that you don't want and you can end up being herded around in a group. But if you want to get a deal, you can certainly save with these packages, especially if they include taxes and service charges.

How are hotels affected by all of this?

Continued on Next Page >>




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