Because of reduced demand and weaker economic conditions, hotel rates across Europe and Britain are down about 3.5%. But in U.S. dollars, the prices are 15.3% higher, said Julia Felton, executive director of Hotel Benchmark, a service of business consulting firm Deloitte UK.
To combat these inflated costs, some companies are pulling travelers off concierge floors and booking them into lower-rent digs, while other companies are instituting leaner per diems.
Computer Sciences Corp. of El Segundo recently issued a new policy capping the hotel rate on stays of three days or fewer at 99 pounds (about $200) a night. For London-bound travelers, that means stays at more mid-level chains such as Thistles and Ramadas. Holiday Inn has become the hotel of choice for U.S. travelers of Britain-based Pilkington PLC, who once were accustomed to Hiltons and Marriotts in Europe.
"Travel was once the sacred cow, but now there are no more sacred cows," E.J. Hewitt, U.S. global supply manager, said of a 2-month-old, company-wide mandate requiring employees to cut their costs by 20%. The huge industrial-glass-manufacturing company is in talks with another large European company to pool volume for deeper discounts from hotels and car companies.
Still, some companies may be taking the downscale concept too far, as Salcito recently discovered on a trip to Europe. "A client put me in a hotel that was the equivalent of 'Rent-a-Wreck,' " she said.
The good news: Many travelers no longer have to expense high-speed Internet, parking, local phone calls, 800-number access and other pricey perks because big companies are negotiating these services into their room rates, said Joanne Baynes, president of Reston, Va.-based Uversa International, which assists corporations with hotel negotiations.
In cities where competition is high, travelers such as Steve Goldmeyer are snagging amenities and more on their own. "At check-in, I always ask for a better rate -- and usually get it," said Goldmeyer, the principal of Rand International, a Farmingdale, N.Y., sporting goods importer. "In this day and age, you have to be vocal."
Going Native
Business travelers have given up another entitlement: taxis and car rentals. Now they're riding the rails with students, vacationers and other tightwad business travelers.
CSC's Stultz takes trains all over Europe. "It's the cheapest way to go," he said. "The train from my hotel to Waterloo station in London cost almost $4, versus nearly $26 for a taxi." DMG America's Bob Ayers stays at suburban guesthouses on train routes, saving more than half the cost of a central-city hotel, not to mention the price of a compact rental (about $1,000 for the week) and gas (which can run as much as $5 a gallon).
And Pilkington has mandated rail travel whenever possible and instituted an online tool to make it easier for travelers to book.
Gone too are the days of three-martini lunches and dinners. The cost of three meals per day in London can now run more than $100 a day with almost $40 of that going to breakfast.
U.S. companies are now negotiating breakfast into their hotel room rates, a practice already common among European companies. "We almost always ask for this because, thanks to the exchange rate, breakfast in Europe now costs as much as dinner in the U.S.," said Pilkington's Hewitt.
Travelers are getting more creative too, choosing burgers and fries over pricey room service meals. "Fast food's even cheaper in Europe than in the States," said CSC's Stultz, who alternately fills up on pasta to save money. "Italian's the most economical meal around."
Hidden Costs
But business travelers seem to be paying more attention to air, hotel and car prices than to the cost of exchanging money, which can add 12% to the bottom line.
Savvy road warriors know to avoid high-priced airport exchange kiosks and to use charge or debit cards and ATMs instead. But few realize they're often getting hit with surcharges that offset those savings.
MasterCard and Visa generally take a 1% to 3% commission on credit card conversions. Issuing banks often slap 1% to 2% on top of that, and cash advances can run even higher.
Another downside: Travelers may be getting shortchanged on their expenses because they do not know to account for hidden charges levied by foreign exchange providers. XE.com and its competitor Oanda.com offer business travelers free foreign exchange charge calculators on their websites, which spit out an estimate of the "hidden fees" for converting and processing the transaction.
The bottom line: The weak dollar along with corporate cuts have created a class of downwardly mobile travelers. And the dramatic change in on-the-road behavior has not gone unnoticed by industry observers. Travelers "do not [and cannot] spend as they did in the '90s," Runzheimer analysts noted.
For 2-million-mile fliers like Rand's Goldmeyer, survival is replacing snobbery. "I always make friends with the gate agent before boarding an international flight," he said. "If there are more empty seats in coach, I'd rather stretch out there than get squeezed into business class."
