UK: CABIN PRESSURES. - Business travel is coming back into fashion. But airlines and hotels are having to cater for a new kind of executive, one who, above all, wants travel and services that are hassle-free.

by David Churchill.
Last Updated: 31 Aug 2010

Business travel is coming back into fashion. But airlines and hotels are having to cater for a new kind of executive, one who, above all, wants travel and services that are hassle-free.

British Airways group managing director Robert Ayling is in no doubt what the business traveller of the late 1990s wants: less hassle. In September the world's most profitable (if not always everybody's favourite) airline relaunched its Club Europe business-class services with a £70 million facelift, including new seats, more business lounges, telephone check-in, limousines at taxi rates and a speedier service through security and customs at Heathrow's Terminal One.

'At every point on the ground, the aim of the revamped Club Europe service is to smooth the business traveller's path, give him or her more time and space and, above all, take away the hassle,' says Ayling, 47 and heir-apparent to Sir Colin Marshall at BA (unless he is tripped up by the forthcoming US legal battles with Richard Branson over the 'dirty tricks' affair). 'All our research tells us that many travellers find air travel a frustrating experience, from the office to the airport to a hotel or meeting and back again. They want to know they're being cared for - which is the aim of the new Club Europe.' This new caring, sharing image of the post-recession corporate traveller of the mid-1990s is a far cry from the late 1980s, when even BA's own advertising strategy was aimed at attracting the (predominantly) male, 'macho' executive who vigorously claimed his right to travel as a sign of his corporate importance. The classic BA television commercial of the late 1980s, known as the Red Eye commercial in Saatchi and Saatchi-speak, had an ambitious executive apparently putting one over on the Americans he was travelling to meet because he arrived raring to go rather than jet-lagged as expected. Now the ads are softer and less strident in tone and focus on the relaxing benefits of travelling in BA's business class.

The 1980s was the decade when business travel had come into its own, fuelled by the economic boom of the Thatcher-Lawson years. Spending on business travel by UK companies rose dramatically during the 1980s to reach £20 billion by the end of the decade, according to American Express's biennial survey.

It is easy to forget that the concept of a separate class for business travellers was still something of a novelty in the early 1980s; it was only in 1975 that KLM claimed to be the first airline to introduce an executive-class cabin, and other airlines were slow to see the potential that business travellers offered. On a Boeing 747 Jumbo to New York, for example, a fully occupied business-class section of executives paying the full fare (which they generally do because of the flexibility this gives) meant that the flight was profitable even if the whole of the economy and first-class cabins were empty. By the end of the 1980s the business traveller was being wooed as never before.

But the boom in business travel did not survive long into the 1990s. The Gulf War acted as a catalyst to companies on both sides of the North Atlantic who were already feeling the onset of recession: companies soon decided that business travel was a luxury they could not always afford. If travel was deemed necessary, then business air travellers were often relegated to the economy cabin. The Amex tracking survey of business travel expenditure showed a fall off in spending by British companies to £17.6 billion a year by 1992: 'It was a very tough time for all sectors of business travel,' admits Eric Brannan, Amex's senior vice-president in charge of travel operations in Europe. 'Although companies are now committed to spending more, there are increasing signs that they want to exercise more rigorous controls over their travel expenditure.' The latest Amex study shows that at some £19.2 billion expenditure for 1993, the level is only just creeping back to pre-recession levels in absolute terms: after adjusting for inflation, UK companies' spending is at the level of the mid-1980s.

But business travel is coming back in fashion. Latest British Airways figures show a strong upturn this year in premium cabin passengers (including both first and business classes), up 1% in the second quarter (to end June), twice the rate of the main cabin. Moreover, it is not just BA that is benefiting: all the major carriers, United, American, Delta and Virgin, report that business traffic has picked up steadily in 1994.

Hoteliers, too, have benefited from the upturn in business activity on both sides of the North Atlantic. Top London hotels such as the Lanesborough and Four Seasons (formerly Inn on the Park) have been running at occupancy levels of 90% or more for the past few months, even during the 'dog-days' of August. 'Demand has been particularly strong from the US, where American executives seem to have ignored the holiday season in their willingness to come to Europe to do business,' comments Ramon Pajares, general manager of the Four Seasons. Rocco Forte, chairman of the eponymous hotel group as well as president of the British Hospitality Association, also reports that UK hotels have been boosted this year by an increase in business travellers, not only from the US but from Europe as well.

Yet the revival of the business traveller post-recession does not necessarily mean a return to the old days (late 1980s) of conspicuous consumption of all that the executive travel world has to offer: Concorde, top hotel suites, luxury limousines and so on. The post-recession corporate traveller - like his or her consumer counterpart - is less likely to be seduced by such fripperies. 'Most business travellers are acutely aware of the need to get to their destinations quickly, to stay centrally to the commercial district and to demand a whole new range of hassle-free services to meet their accommodation and business needs,' suggests Tommaso Zanzotto, chairman of Hilton International. Moreover, the going is getting tougher. 'The business traveller in the 1990s is increasingly under pressure to perform and justify his or her usefulness to the company,' believes Richard Lovell, UK managing director of the newly formed Carlson-Wagonlit travel agency combine. 'This means that some of the old excuses for underperformance - such as jet-lag - are no longer acceptable as a reason for missing the deal.'

The business traveller, therefore, is increasingly focusing on added value: access, for example, to a hotel concierge or club floor, which can be used all day for meeting contacts; or access to an executive lounge while waiting for a plane, enabling last-minute work to be done before boarding. BA's Executive Club concept has proved remarkably successful - more than 500,000 members have been signed up - not only because it enables Air Miles to be accumulated but also because of its many other benefits (apart from lounges, it offers cheaper car rental and hotel rates, as well as upgrades - on planes, hotels and cars - where possible).

The new generation of post-recession travellers on business, moreover, are also more willing to reveal themselves as less macho than their 1980s counterparts. Extensive research by the Hyatt Hotels chain, for example, has revealed the 'soft' side of executive guests. Many exhibited a desire to remind themselves of home and family, by bringing personal mementos such as a favourite clock or family photograph to add that touch of individuality to what is usually a sterile hotel environment. Women executive travellers, moreover, are becoming increasingly important for hotels: Expotel, the hotel reservations agency, recently estimated that about 35% of all hotel bookings for business travellers are for women. By the end of the decade, it expects hotel executive guests to be evenly split between men and women.

Another survey, this time carried out by the Official Airlines Guide (OAG), of 1,000 regular travellers found that two-thirds rated home and family life as their most important motivator and the key reason for putting up with the hassles of having to travel on business.

Yet, at the same time, these surveys showed that business travellers away from home found it difficult to relate to the reality of home life. Phoning home might be all right for an alien ET, but human Executive Travellers often found the experience disturbing. 'When I ring home, all I ever feel is harassed about matters over which I have no control, such as the children playing up or the washing machine breaking down,' one executive told Hyatt in its survey. 'All I want is for the conversation to end, even though I love my family very much.' Michael Gray, general manager of the Hyatt Carlton Tower in London's Knightsbridge, says that 'the dislike of the telephone doesn't mean we'll be ripping them all out. But it does give us an interesting insight into the minds of guests, which is vital as we develop new hotels.' Such comments, however, emphasise the dilemma facing 1990s business travellers: once they leave the controlled environment of the office, where position and status are closely defined and observed, the outside world does not always recognise their (perceived) importance. In addition, they have less direct ability to control their surroundings sufficiently to ensure their personal agenda (getting to a meeting on time, for example) is met.

Given this lack of individual control over the traveller's environment, it is hardly surprising that surveys show that punctuality and airline schedules are the most important factors for frequent business travellers (typically those who take 15 or more flights a year on business) when choosing which airline and flight to take. The importance of good scheduling, according to the OAG survey, was illustrated by 30% of the same saying they had to make changes to their travel plans 'very frequently', with a further 40% making such changes 'occasionally'.

Unfortunately, given the vicissitudes of air traffic controllers and the availability of airport take-off and landing times, these are the areas over which airlines have least effective control. Hence the determination with which the airlines promote factors that are under their control - such as in-flight service and catering, two items which business travellers rate very low on their schedule of priorities.

Yet, to be fair, the airlines and airports in the 1990s have sought to tackle the issues of recognition and control on the ground in that vital area between leaving home or office and actually boarding the aircraft. The rejuvenated BAA (formerly British Airports Authority) under Sir John Egan has been instrumental in getting the airlines together to support the 'Fast Track' system for business-class passengers, first at Gatwick and now at Heathrow, although the full Terminal One 'Fast Track' (a limited facility opened in September) does not come into operation until next January.

Fast Track, as the name implies, allows business-class ticket holders to by-pass the standard queues containing holidaymakers and other leisure travellers for security and passport control. It also offers special facilities at the duty-free shop and at the foreign exchange counters and may soon be extended to other areas such as faster car parking.

Valet parking, in fact, along with limousine transfers is an increasing feature of the efforts airlines make to woo business travellers with the aim of providing a seamless service from office to aircraft. Telephone check-in is also being offered by a number of airlines to ease the congestion at the terminal.

Technology is playing an increasingly important role in easing life for the frequent traveller. European airlines, including BA, Swissair and Air France, are in the process this autumn of introducing sophisticated new tickets - called ATB2s in the airline world - which will eventually replace the traditional multi-layer, carbon-backed tickets with a single card which has a magnetic stripe along its back. This stripe encapsulates all the necessary ticket information - including itinerary, class, seat and dietary preferences - and can be automatically read at the check-in desk, replacing the need for time-consuming manual input into the computer system. When the system is fully in use it should cut the time taken to check-in by at least 30%, the airlines estimate.

Another new system, due to be installed at Frankfurt airport this autumn, will enable regular travellers to pass speedily through passport control merely by placing their hands on to a special scanner. This will read a pre-registered palm-print, allowing the traveller through within seconds.The system is already in use at New York's JFK and Newark airports, with 5,000 regular travellers so far using the system.

Giving control to frequent travellers is also the key to the technology introduced by car-rental companies such as Avis and Hertz. Avis's 'Wizard' system is a real-time computer network linking over 15,000 terminals in 32 countries, enabling Avis to process car-rental requests instantly from virtually anywhere in the world. Alun Cathcart, chairman and chief executive of Avis Europe, believes that most car-rental desks at airports get more than their fair share of aggression from tired and frustrated business travellers.

'The person at the rental desk is the first non-authoritarian contact after leaving the cocoon of the plane,' he points out. 'You cannot take out your frustrations on immigration or customs, so you might decide to take it out on the rental receptionist. That is one of the reasons why we ensure that we have all the details of a traveller's car rental preferences and all the paperwork done, so that he or she only has to turn up, identify him or herself with a personalised Avis Wizard card, and get possession of the car.'

Hotels, also, recognise the desire for recognition and control by business travellers. A number, such as Forte and Hyatt, are experimenting with 'smart card' technology to allow automatic check-in and check-out, although early indications suggest that many travellers still prefer a more human touch at the front desk, even if it is less efficient than a computer. But hotels are increasingly emulating the airlines with guest recognition schemes. Inter-Continental's 'Six Continents Club', for example, rewards frequent guests with special bonuses according to the number of trips and the amount spent in one of the chain's hotels as well as making sure that club members are recognised at check-in.

But Inter-Continental, like most other hotel groups, also gives airline frequent-flyer points to their regular guests. The hotels, as with airlines in the US and Europe, have found that nothing motivates the business traveller so much as the prospect of 'free' travel. And it is this more than anything else, which differentiates the post-recessionary business traveller in Europe from his or her counterpart in the late 1980s. While frequent-flyer schemes were commonplace in the US in the past decade, they were almost non-existent in Europe. But the competition, introduced by the large US carriers on the transatlantic routes as a result of a liberalisation in the early 1990s, forced European carriers, especially BA, to follow suit. Their impact has been dramatic: according to the OAG survey, seven out of every 10 surveyed said that, given a choice of carriers, they would choose the one to which they belonged. Some 82% of those surveyed belonged to at least one frequent-flyer scheme, rising to 95% for those flying 20 times or more a year. Typically, regular travellers belonged to at least three schemes.

The result has been to put pressure on corporate travel policies which might dictate that a particular airline is flown because of a special deal between that airline and the company. 'It means that executives will resort to finding all sorts of reasons why they need to fly with a particular airline, just so as to gain their frequent-flyer points,' says Carlson-Wagonlit's Lovell. 'This doesn't apply just to junior executives, but right up to the top of the company in many cases.' But rewarding business travellers with free flights (often used to take their families on holiday) when the cost of qualifying flights has been paid for by a company is increasingly under attack from large companies. They argue that such benefits should accrue to the company and not the individual, partly because of the extra costs incurred by not flying approved airlines but also because of the damage to morale among those left behind in the office who do not gain any benefit.

Some airlines are recognising this: in September, Virgin Atlantic, for example, introduced a scheme to give half of the qualifying mileage points on its Freeway programme back to the companies who had paid for the flights - but in order to remain competitive Virgin is still forced to give the whole number of points as well to the individual traveller.

BA's Air Miles is by far the most popular European frequent-flyer programme, although it is available only to its Executive Club members paying mostly full-price fares. Group managing director Robert Ayling defends BA's stance of only giving Air Miles to individuals and not their companies, even though the latter are paying for the flights. 'It is simply another benefit for passengers, in the same way as we provide them with a meal and entertainment on board,' he says, somewhat unconvincingly. 'Whether you give a free ticket or a meal, it is something over and above the basic carriage of that person from A to B and therefore something that is applicable to them.' But Ayling adds: 'BA didn't invent the frequent-flyer programmes and it is something that we have to provide because it is what business travellers have come to expect.' In the 1990s, the business traveller reigns supreme.

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