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Smaller Firms Turning to the Net for Tickets

Travelocity, Orbitz and Expedia say about a third of their sales come from businesses that lack corporate travel offices.

September 24, 2002|JULIE FISHMAN | STAMFORD ADVOCATE

Heidi Galli, who is in charge of arranging travel plans for employees at a small software development firm, can't recount the last time she booked an unrestricted, full-price airline ticket.

That's because she never has.

Galli, director of administration for SmartEquip Inc., a 2-year-old firm in Norwalk, Conn., that develops software for equipment rental companies and distributors, seeks only discounted Web fares to book company travel.

SmartEquip is among a growing number of small to medium-sized businesses that are eschewing corporate travel agents and turning to discounted air fares offered via the Internet.

Although many large businesses remain tied to their corporate travel offices, the unmanaged business travel segment is a valuable market for online travel companies.

Three of the biggest online travel agents--Travelocity, Orbitz and Expedia--attribute about a third of their sales to the unmanaged business market, said Lorraine Sileo, an analyst with travel research firm PhoCusWright.

According to a PhoCusWright forecast, leisure and business travelers will spend $28.4 billion on online bookings this year. Of that number, about $10 billion will come from the business traveler, Sileo said.

Because of the potential for sales growth, Internet travel agents and suppliers are trying to make the online experience more convenient for their business travel clients

Last year, Travelocity launched a business travel center that offers personalized services such as Repeat a Trip--in which a traveler rebooking the same route can do so with one mouse click--and automatically alerting a traveler by e-mail or telephone if his or her flight is delayed.

Orbitz and Expedia operate business sites with similar features.

The Internet travel industry also seeks to capitalize on another growing segment--the "rogue" or "leakage" customer who works for a large corporation and defies company policy by booking low-cost online travel arrangements.

The National Business Travel Assn., which represents corporate travel managers, says more than half its members restrict their employees from seeking fares--even a cheaper one--on the Internet because it hinders their ability to manage travel programs.

When an employee purchases an airline ticket online, in most cases the purchase does not count toward a corporation's negotiated contract with a supplier.

Travelocity sees several big-name companies, with thousands of employees, going to its Web site, said Michael Stacy, senior vice president of marketing for the Fort Worth-based company.

"We can see they are looking at our site, looking up fares," he said. Then, he said, they call their corporate travel office to see if company agents can match the fare.

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