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Web Bookings Click With Businesses

More companies are using the Internet to make travel plans, seeking the same discounts as those found in the leisure market.

September 23, 2003|Jerry Hirsch | Times Staff Writer

Kris Sarajian admits it. He was a guerrilla Web booker.

The marketing executive regularly bypassed his company's travel agency to book his business travel arrangements online.

The logic was obvious. "It would save money," Sarajian said. His employer, Akibia Inc., an information technology provider in Westborough, Mass., now books virtually all its travel online.

Sarajian was far from alone. Guerrilla booking has become typical in offices coast to coast, said Bjorn Hanson, a travel industry consultant with PricewaterhouseCoopers.

Sure, it might violate a company's formal policy, but "it's pretty hard to punish people who find ways to save money," Hanson said.

Web-based specials, smaller booking fees and the ability to find cheaper travel options all contribute to savings available online that can range up to 60% and typically average about 8%, according to PricewaterhouseCoopers. Even offline, there are greater savings for business travelers. The odious Saturday stay-over rule has eased a bit, and unused nonrefundable tickets sometimes can be applied to future travel.

The gap between what business and leisure travelers pay has narrowed, contributing to a dramatic shift in the business travel marketplace. Business travelers have figured out how to better tap the lower rates typically offered leisure customers. Although business travelers are still a key source of travel industry revenues and profits -- and often still pay higher rates -- gone are the days when airlines, hotels, car rental firms and others could expect corporate customers to open up their wallets without asking for deals similar to what leisure customers get.

The trend has spurred Internet travel sites such as Travelocity, Expedia and Orbitz -- whose rapid growth has stemmed largely from leisure travelers -- to offer services specifically catering to business travelers.

Some experts warn, however, that booking online doesn't always produce savings. And such practices often don't allow companies to capitalize on volume discounts obtained from specific travel suppliers.

Nonetheless, more companies are formally encouraging Internet bookings -- legitimizing previously covert practices of Web guerrillas.

Computer giant Hewlett-Packard Co. now books nearly 70% of its U.S. and Canadian tickets online and is beginning a pilot program to do the same in Europe, said Lea McLeod, HP global travel manager.

HP saves about 15% when it buys online versus using a traditional agency. Moreover, administrative costs of processing tickets booked online are 30% to 50% less than those booked manually.

A National Business Travel Monitor survey of 1,200 business travelers found that 65% now use the Internet to plan some aspect of their trip -- everything from checking a flight schedule to booking a rental car, reports Peter Yesawich of Yesawich, Pepperdine, Brown & Russell, a travel industry consulting firm. That's up from 55% a year ago.

He said much of that growth came from the failure, until just recently, of travel suppliers to understand that business travelers were developing the same price sensitivity as leisure travelers.

"Business travelers now are much more likely to adjust their flight schedule to save money, and they aren't as interested in paying more just to be on a concierge floor at a hotel," Yesawich said.

It's all part of a "commoditization of the industry," said Carl Winston, a travel business expert at San Diego State.

For the most part, road warriors no longer differentiate between airlines or even hotel chains, instead making their decisions on ratios of price and convenience, Winston said.

Internet tools help reinforce this message by quickly giving corporate travel planners and employees information that could only be seen by travel agents just a few years ago.

Bob Werner, a business consultant in Hamden, Conn., who flies about 20,000 miles annually, uses the Internet to learn which airline flies where and compares costs of tickets and hotel options.

"This kind of information is bound to help save the traveler money because you can quickly compare options," Werner said. "This allows you to choose to spend less, or more, depending on what you have to give up or get."

Confronted with online booking, Akibia, the Massachusetts IT service provider, signed up in March to a Web-based Expedia Corporate Travel system, where going online was the first option rather than the covert one.

Since then, the company has driven the average cost of an airplane ticket down $100, said Donna Jakobites, the executive assistant who oversees the company's travel arrangements.

Just months after adopting the system, 99% of Akibia's travel is now booked through Expedia.

Among other Internet travel sites, Orbitz also has an offering and Travelocity just launched Travelocity Business, a service targeting small to mid-size companies with annual travel budgets of $500,000 to $15 million.

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