Marketers to Up Promotions to Business Travelers
Business travelers are expected to begin booking flights, hotels and rental cars as the economy grows in 2011. After 2 years of a tight travel market, businesses are likely to approve more travel expenditures. But profitability concerns will also keep the travel department at many businesses looking for ways to keep budgets in check. Marketers who position themselves as corporate friendly and promoting their willingness to negotiate rates may win more market share.
Christa Degnan Manning, director of eXpert insights and research, American Express Business Travel, believes that “pricing power will swing back to air and hotel suppliers for the first time in two years in 2011.” To preserve travel budgets, in light of the expected 10% increase in hotel rates this year, businesses will seek to negotiate rates with preferred lodging providers. American Express analysts believe that even with negotiation, businesses will be paying between 1%-5% more for mid-range lodging options and between 2%-6% more for upper-range lodging options. Similarly, the airline industry is expected to keep capacity limited and to offer fewer discounts. This strategy will increase the competition for seats. So business travelers will likely be encouraged to book early to get the best price and selection.
The latest American Express travel research predicts that businesses will increase meeting frequency this year. But to contain costs, meetings will include fewer participants. In some cases, meetings will be held locally or regionally. This trend may prompt local conference space operators to market their spaces and services more aggressively to seize some of these revenue opportunities.
In the rental car market, competition is expected to increase because of excess inventory. Rental rates may decline by as much as 2% this year. Look for operators in this sector to up their marketing to business travelers as they seek to increase revenue in the improving economy.
For the first time in several years, there’s good news in the business travel sector. Service providers of all kinds will likely be marketing again to lure business travelers.[Source: The American Express Global Business Travel 2011 Forecast. OdysseyMediaGroup.com. 21 Oct. 2010. Web. 28 Jan 2011]