Business travel was one of the things that got cut to the bone during the severe recession in 2008. But now, as companies are rebounding, they are slowly sending their employees back on the road.
Hotels are capitalizing on the upswing. A new JW Marriott opened in the heart of Chicago’s financial district Nov. 1, and already employees say they are planning for an influx of business travelers.
“This is the heart of the financial district, with lots of companies,” said Cavin Macen, guest reception agent at the new hotel. “Considering the business travel that does happen, that’s why we have so much meeting space.”
Although it is too soon to truly measure an increase in business travel at the new hotel, Macen said he was seeing more business travelers come through then he did at the previous hotel he worked for.
“I worked at the Ritz Carlton in Phoenix, and business travel was definitely picking up there. The numbers were higher than expected,” Macen said.
Increased traffic at Chicago hotels is just one sign of an overall resurgence of business travel but some experts believe it will take a long time – if ever – for business travel to pre-recession levels.
Revenue from airline passenger travel rose 17 percent in August compared with the same period last year, the eighth consecutive month of revenue growth, according to the Air Transport Association of America.
NetJets, a private time-share jet company used by businesses, saw revenue increase 17 percent in the first nine months of this year compared with the same period last year. The company, which counts Warren Buffett as a major investor, attributes the increase partially to more worldwide flight revenue hours.
Additionally, U.S. hotel occupancy is up 6.7 percentage points to 63.9 percent in the third quarter, according to STR Global, which attributes the increase to a rebound in corporate travel.
However, the growth has been slow during the past year, and many companies are finding alternatives to sending employees by air.
Video conferencing is one option companies are turning to as a cost-effective way to conduct business across the country.
Ben Chodor, senior vice-president of InterCall Streaming, said that technology has become a vital part of the way companies conduct business.
“We’re in a global economy, and you need to be able to interact,” Chodor said. “One of the keys is that two years ago it was nice to have the technology. A year ago, it was need to have and going into 2011, it’s a must have.”
There’s no question that business travel is occurring at a much lower level than it once was.
Overall spending on business travel was down 21 percent last year, according to a survey of the top 100 companies that spend money on business travel conducted by Business Travel News. Travel spending by the company at the bottom of the list fell to $26 million, the first time since 1995 that the 100th ranked company spent less than $30 million.
The National Business Travel Association reports that the total number of U.S. business trips in 2010 through October has totaled 431 million compared with 511 million in 2007.
That’s fine with many road warriors, who feel reluctant to fly for work, citing the hassle of increased security and cutbacks in airline service. The recent implementation of full-body scans and pat downs by the Transportation Security Administration at airports has only perpetuated that sentiment among many.
“I’ve definitely seen a change in business travel. It went from being something of a guilty pleasure to an absolute headache and something to avoid if at all possible,” said Derek Whittle, who works for Microsoft and flies out of Seattle-Tacoma International Airport when he travels for business.
Low-cost carriers continue to be competitive in the leisure travel market, but they do not emphasize the typical amenities of business and first-class seating that business travelers prefer. That doesn’t appear likely to change. Southwest Airlines, which recently acquired AirTran, did away with the airline’s first-class seating in favor of Southwest’s policy of all coach seating.
Many in the industry hold onto the hope that business travel will really take off in the spring.
“Business travel will drop down for December through February and in March it will pick back up,” said Erica Zielinski, welcome desk agent at the W Hotel on Adams Street in Chicago. “I definitely think business travel is on its ‘A’ game right now.”