An Industry in Flux
Bedell, Denise, Global Finance
Tightened budgets and new technology have triggered a wave of innovation in the business travel industry.
The business travel industry has undergone many changes in recent: years. As businesses around the globe search for greater efficiency, it is often travel that is first hit when it comes time to cut the budget. And with the advent of new technologies such as web conferencing, airlines, hotels and conference centers have had to streamline themselves in order to compete for the corporate coin.
While there has been a resurgence in the corporate travel market recently-as many global economies have seen stable growth, and early-millennial travel fears have melted away-companies are changing how and when executives travel and what they expect for their dollar. Some, such as US firm Johnson Controls, have completely restructured their corporate travel programs. With supplier consolidation and more efficient negotiations and procurement, Johnson has saved millions of dollars on negotiated flight costs and has reduced air spending by 25% over 1998 levels.
Others are taking advantage of new technologies, such as web conferencing, to save their employees' traveling at all. E-conferencing has seen particular take-up for corporate events where face-to-face meetings are not essential, according to Bob Wise, vice president of strategic development and marketing at e-conferencing company InterCall."They are replacing business travel with web conferences or audio conferencing when they can accomplish the same thing without having to be there." he says.
New technologies that add to the interactive nature of e-conferencing are also appearing, which could further crimp the business travel market. Within virtual worlds such as second Life, for example, businesses have begun hosting virtual meetings, seminars, brainstorming sessions and analyst conferences where participants can create an avatar and interact with other conference participants. Sun Microsystems and IBM have hosted virtual investor conferences in second Life.
The e-conferencing market is putting increasing strain on the traditional business travel market, and a number of companies are looking at ways to cut costs and provide more for less to corporate clients. A number of hotel chains are building up their mid-range business hotel portfolio and getting rid of higher-end properties. …