UK: Business air travel - plain, or with the trimmings? (3 of 3)

UK: Business air travel - plain, or with the trimmings? (3 of 3) - However, as the scope for premium services in the air becomes exhausted, airlines are diverting their attention to the ground to make sure that their product stands out from the rest. Inc

by
Last Updated: 31 Aug 2010

However, as the scope for premium services in the air becomes exhausted, airlines are diverting their attention to the ground to make sure that their product stands out from the rest. Increasing congestion at airports is putting more value on swift check-in facilities and private lounges. Downtown check-in, which frees passengers of their luggage at hotels and airline ticket offices, is offered by British Airways and some other European carriers.

Swissair and Scandinavian Airlines have another timesaver: the ability to check in by telephone in some cases. And kerbside check-in, enabling executives to dodge the crowds in the terminal buildings, is possible through Virgin. Valet parking is also available and Japan Air Lines will throw in an additional seven days' parking for free. Meanwhile, a complimentary chauffeur-drive, usually within a 40 to 50-mile radius of the airport, is a perk being offered by more and more airlines. Diners Club cardholders also have access to executive lounges at 14 international airports and use of comprehensive secretarial facilities and meeting rooms.

Hotels, too, are recognising the executive's need for business facilities. The Hotel Strand Inter-Continental in Helsinki now has phones with computer modems, portable fax machines, laptop computers and video room service, and in Seoul the hotel business centre provides secretarial services, bookbinding and even Korean name card printing. Meanwhile, executive floors with a 24-hour butler service and a lounge facility are being introduced in Sheraton hotels located in major commercial centres. But other hotel groups are opting for a more homely alternative, to appeal to longer-staying business guests. Residential-style hotels, such as Marriott's Residence Inns, provide more spacious rooms and fully equipped kitchens for the executive who is fed up with living out of a suitcase.

Until now incentives have generally concentrated on the individual rather than the company actually footing the bill. This is not surprising, given that most firms tend to leave travel decisions to executives or their secretaries rather than rigorously managing travel plans. According to a survey by Pickfords Travel, less than half of UK companies have a written travel policy.

However, economic uncertainties brought on by the Gulf crisis and the onset of recession are prompting firms to take more control of costs. But this does not necessarily mean going downmarket and having to relinquish five-star hotels and business class travel, say business travel specialists. Savings of about 10%, which could knock £2 billion off the total annual bill, are possible through better management, claims American Express. "The key to successfully managing business travel is information. Understanding how much is being spent, by whom and on what," says John Petersen, general manager of travel management services at American Express.

As firms begin to appreciate the complexities of travel planning - and the potential for savings - the big business travel specialists, in turn, are refining the service that they offer and coming up with competitive deals. American Express, Thomas Cook, Hogg Robinson and Pickfords Travel will even plant their staff in house for major clients. Supported by a new generation of sophisticated computer reservations systems (CRSs), they promise to seek out the best deal for companies and use their buying clout to win discounts and preferred rates. As Eric Brannan, head of business travel at American Express, comments: "With more clients keen to monitor and control spending, agents unable to provide management skills, in addition to the usual booking and counter services, will inevitably lose out."

Other companies are taking expense management one step further and using corporate cards to track employees' expenditure. Along with the insurance benefits to the individual, cards provide an audit trail. These highlight the potential for savings and for negotiating bulk discounts with airlines and hotels. Charge card companies also cite the benefits of longer credit periods for payment - up to 60 days - which helps cash flow and reduces the need for advances.

But this wave of cost consciousness may end up shifting the focus of incentives away from the individual and towards fulfilling corporate needs. North American firms, in particular, are beginning to resent the amount of cash channelled back to their employees' via airline and hotel reward programmes. Already in the US, airlines are in the process of developing schemes which put employees' mileage awards into the company's hands. For instance, Japan Air Lines has launched a Corporate Passbook which enables companies to exchange mileage credits accumulated by their employees for free tickets.

Anyway, if a recent survey is to be believed, the majority of executives would not really mourn the loss of many of these trimmings. As it stands, the travel industry has got it wrong, say 2,500 business customers who were questioned by Pickfords. What worries them most is not airline promotions, frills and fancy food. They simply want the seat that they booked, safe arrival of their luggage and no frustrating delays. Sadly, with the increasingly congested roads and crowded skies, this is one guarantee that few will be able to keep.

(Sara Pennington is a freelance journalist.)

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today