Many small businesses have bypassed trendy corporate travel policies while still reducing travel costs.
Chicago-based Jam Productions Ltd., for example, gives its workers plenty of leeway in deciding how to get from one city to another to produce the next concert–within reason.
“Part of the corporate culture is to keep expenses under control,” said Andrew Kaplan, who as Jam Production’s talent buyer travels several times each month. Kaplan generally books on Orbitz, a Chicago-based travel Web site, the same as if he were buying the ticket out of his own pocket for a leisure trip.
Given that few small- and mid-size firms do enough traveling to qualify for the substantial volume-based discounts that travel management firms confer on large companies, many are discovering they’re better off booking like consumers. The practice has become so widespread that online agencies Orbitz and Expedia have set up programs geared toward small businesses that regularly use their services. Sabre Holdings’ Travelocity is poised to launch a business version Aug. 10.
Even as business travel has tanked in the sluggish economy, the choices small businesses face for making travel arrangements have never been more plentiful–though deciphering the options can be downright confusing. Besides looking for the lowest fares, small businesses need to weigh ticketing fees and other added charges.
For example, while many travel agents charge $40 to $50 to book an airline ticket, some charge $25 or less and still make changes as needed without adding on fees. Meanwhile, seemingly slim online charges can add up. For example, while Orbitz charges $6 to book an airline ticket online, or $10 for American Trans Air and Frontier Airlines flights, if you need to call to change your flight, speaking to a live representative will add on $15, bringing the total to $20.
Travelocity Business, which plans to emphasize service, will charge $5 for airline tickets booked online and $20 for tickets booked by phone with an agent. To change a ticket and have it reissued, Travelocity Business plans to charge $30 both online and offline, not including change fees from the airlines. Rental car and hotel bookings will be free online, but $10 each to book offline.
Generally, once you book a ticket online, you’ve bought it, while local travel agents often will hold a ticket for 24 hours, giving customers a chance to change their mind about a flight before the airlines’ change fees apply. Most online agencies don’t provide that service.
“Immediate ticketing is a way to drive down costs,” said Pete Stevens, vice president of sales and marketing for Travelocity Business.
The flexibility that live travel agents provide is a big reason Chicago attorney Robert Moore of Stone & Moore books about $25,000 worth of travel through a brick-and-mortar agency each year with no gripes about the $25 fee per ticket that his agency, Diplomat Travel in Chicago, charges.
“Twenty-five dollars for a round-trip ticket is incredibly reasonable when you figure out the amount of time you save in the long run by booking your ticket through a travel agent,” he said.
By letting an agent do the legwork, you save time hunting for an appropriate flight and fare. But more importantly, if you run into a problem, you don’t have to solve it yourself, Moore says. If you miss your flight and have to change your hotel and car plans as a result, rearranging your itinerary is infinitely easier with a live agent than an online agency, he suggests.
“I make one phone call and it’s all taken care of,” he said.
Moore isn’t alone. The idea that many business travelers want businesslike service has spurred the online agencies to beef up their business offerings with traditional agents. For example, months before Bellevue, Wash.-based Expedia launched Expedia Corporate Travel in November, it bought Metropolitan Travel, a corporate travel agency, and gained its experienced business agents, says Matt Hulett, vice president.
And in April, it unveiled a “custom service” program for business customers, providing dedicated agents for companies that want a personal approach. Booking fees for that program are $20, compared with $5 to book online.
Expedia also has added a travel management component, allowing small businesses to keep track of their spending. Orbitz has a similar program, as does Southwest Airlines with SWABiz.com. It’s an approach the major travel management firms have been using for years. American Express Travel launched RezPort in 1996 to give its small business customers a way to book travel and manage travel spending online, says spokeswoman Melissa Abernathy. The company charges no booking fee, but an annual $100 membership fee. Small businesses that need more service can call RezExpress, which provides live agents and charges a $15 transaction fee.
The online service is picking up steam, with online bookings accounting for 20 percent of American Express’ business travel today, up from 6 percent at the beginning of 2002, Abernathy says. PhoCusWright, a travel research company in Sherman, Conn., estimates that online booking accounted for $21 billion of $112 billion in total business travel in 2002 and projects online sales will surge to $50 billion out of a forecasted $136 billion in total 2005 business travel.
Internet-only fares on average were 24 percent lower than the best available prices to travel agents from published global distribution system sources, a FareChase.com survey said. GDS is one system commonly used by travel agents to check fares for clients.
Agents and travel managers, however, dispute that finding, pointing out that not all Internet fares are what they seem.
“A lot of times, when you go in to get the fare, it’s not there,” because it has sold out, says Tim Gorfido, a former travel agent who is corporate travel manager for Coverall North America, a Ft. Lauderdale-based commercial cleaning business.
Also, discounted Internet fares often have restrictions that make them undesirable for business travelers, he says, noting that he uses online sites such as Orbitz, SideStep, FareChase and Qixo.com to double-check that the fare he’s getting through GDS is the lowest. Nine out of 10 times, he says, it is.
Also, Anne Kapos, vice president of operations for Options Travel in Des Plaines, says, “Travel agents have as much access to Web fares as anyone.”
It’s not all about the lowest fare anyway, Stevens says, sometimes it’s time. “It doesn’t do anybody any good to always choose the lowest fare.”
