Airlines, hotels struggle as business travel plummets

Despite signs that the country’s economic free fall may be bottoming out, demand for business travel continues to plummet, putting airlines and hotels in financial straits.

As businesses continue to tighten spending practices, corporate travel is projected to drop by 15% this year compared with 2008, while overall travel demand could decline by 11%, according to a study by PhoCusWright, a Sherman, Conn., market research firm.

Corporate travel -- defined as business travel managed under strict corporate policies -- has historically represented about 40% of the total travel market, but PhoCusWright predicts that share will drop to 35% next year.

Other business travel -- by smaller firms that do not have a travel policy dictating the types of travel, supplier or rates -- represents about 12% of the market.

Although the PhoCusWright study did not look at what is called “unmanaged business travel,” a company spokesman said such travel demand is also down.

As a result of such declines, airlines are struggling to fill lucrative, premium-class seats, typically reserved for business travelers with hefty expense accounts.

Some airlines are considering replacing premium-class seats with economy or coach seats. And many airlines are simply cutting capacity by taking airplanes out of service.

Tony Tyler, chief executive of Cathay Pacific Airways, Hong Kong’s biggest carrier, told a television news show that his airline may resort to pulling out premium-class seats. “We’re going to have to make fundamental changes to our business,” he said.

British Airways, which experienced a 12% drop in revenue in the first quarter of 2009, announced plans to cut capacity later this year by parking 22 aircraft, primarily older Boeing 747s and 757s.

But there is some good news in the airline industry.

The U.S. Bureau of Transportation Statistics reported earlier this week that the on-time arrival rate for the nation’s largest airlines had improved to 76.1% in June, compared with 70.8% for the same month last year.

Hawaiian Airlines won the top spot on the ranking, with a 93.3% on-time rating, followed by Alaska Airlines with a rating of 85% and ExpressJet with an 82% rating, according to the monthly report.

The airlines with the worst on-time arrival rates: Comair, the regional airline based in Ohio, recorded a 60% on-time record, followed by Frontier Airlines of Denver, with a 68% rating and American Airlines with a 70% rating.

Help is offered on picking plane seat

All airline seats are not created equal. At least, that’s what Expedia.com believes.

The online travel reservation giant has teamed up with SeatGuru.com to offer Internet reviews of the airline seat that customers are thinking about booking.

SeatGuru.com, which is part of the TripAdvisor.com media network, surveys travelers on such considerations as legroom, seat recline and proximity to bathrooms.

For example, reviews of a flight from Burbank to San Jose on US Airways warned against taking any of the six seats on row 26 of the Airbus A320, saying the proximity to the bathroom was “bothersome.” Meanwhile, the seats on row 11 have extra legroom because of the adjacent emergency exit.

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Bedbug problem seen as worsening

Speaking of bothersome travel problems, the infestation of bedbugs in hotels, apartments and dormitories is on the rise. Pest management companies have reported a 71% increase in bedbug calls since 2001, according to the National Pest Management Assn. Bedbugs are creeping up in all 50 states, the association said.

The wingless insects that feed on the blood of humans and other warm-blooded creatures have grown into such a problem that the American Hotel and Lodging Assn. and the pest management group are co-hosting National Bed Bug Symposium events Aug. 25 in New Jersey and Aug. 27 in Seattle.

The National Pest Management Assn. has reserved rooms for the symposium at an airport-adjacent hotel. Coincidentally, the very hotel where the nation’s top pest control experts will sleep has a report by a TripAdvisor.com reviewer of an itchy problem with -- you guessed it -- bedbugs.

Hotel cuts rates by taking out bed

One way to avoid bedbugs at a hotel is to eliminate the bed.

At the Rancho Bernardo Inn in San Diego, you can save money by bringing your own pillows, linen, towels and toilet paper. The so-called Survivor Package lets guests reduce their rate by cutting out typical hotel amenities.

A room for two starts at $219 per night, but you can lower the price by doing without towels, sheets, air conditioning, lighting and a bed. For the rock-bottom price of $19, you can stay in a bare room, furnished with nothing but a small tent. The deal runs Aug. 16-31.

General Manager John Gates said the idea was tried in June as a way to spoof the bargain deals offered at other hotels. But he said the Survivor Package has become a popular way to attract new customers to the inn.

He added that most guests who have signed up for the package keep the bed but cut out other extras, such as breakfast and towels.

“Most people are not taking the bed out,” he said.

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