An Even Bumpier Ride Ahead for Business Travelers

Corporate belt tightening will give new meaning to the term "road warrior."

By Martha Lynn Craver, Associate Editor, The Kiplinger Letter

September 29, 2008

Look for more companies to tighten their travel policies, with more restrictions on who, what, when, where and why. Fewer trips and fewer traveling employees is the goal. More employers will put workers through the paces to justify a trip before it is approved. Workers will be expected to make a case for why a trip is a better option than a video or teleconference.

If the trip is approved, companies will require that employees book well in advance to take advantage of early reservation discounts. And they'll be told to use only airlines with which the companies have inked discount deals.

To avoid the increasing costs of add-on fees, travelers may find that they will be barred from taking a second suitcase on short trips, for example, or forced to pay out of pocket if they want a seat upgrade. Two checked bags can add up to $130 for a round-trip, while an upgrade to first class can add as much as to a round-trip.

Chances are employees also will have to trade down from business class to coach, stay in a mid-price hotel, share a room with a colleague or stay over a Saturday night if it means a big savings in the airfare. Reimbursements for meals and entertainment are being pared as well. Per diems are shrinking and certain high-end restaurants are being placed off-limits, says Henry Harteveldt of Forrester Research.

Automated services will be increasingly used to help enforce company travel policies. For example, they can alert a manager if a trip is booked that does not follow company procedures, or direct employees to a videoconferencing website to remind them of that option. Department travel costs can be captured and shared internally, showing not only how much each department spent, but also how much each department lost due to noncompliance. "No one wants to be the biggest loser," says DeAnne Dale of Travelocity Business.

These services also can alert employees to the availability of unused airline tickets, says Dale. Last minute travel changes and other rescheduling often result in abandoned tickets that are bought but never used.

Airline capacity cuts will add to the business traveler's woes. Pummeled by the volatile price of fuel, the U.S. airlines are in the process of making deep reductions in their capacity. "So travelers looking to make last minute changes or who suddenly have a need to fly may find that there aren't any seats available," says Marie Magliano, president of Uniglobe Travel Partners in Mt. Arlington, N.J. These route cuts will also make smaller- to medium-sized markets harder to get to. "There will be fewer direct flights so travelers should anticipate more connections to get to their destinations," says Dale.

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