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JUNE 6, 2000


Now Boarding: Small Businesss

Travel services are rolling out the red carpet once reserved for big customers

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Hip-hop artist Speech and his wife, Yolanda Thomas, owners of four-employee Vagabond Productions, dropped a hundred grand last year on airfare alone for their Fayetteville (Ga.) music publishing and production company. Beth Slifer, president of Slifer Designs, a $20 million residential-design firm in Edwards, Colo. is staring down the barrel of a $231,000 travel budget for 2000. Only $50,000 of that will be billed back to clients. ''Usually, it's spur-of-the-moment meetings with potential clients,'' says Slifer, ''and my travel plans change constantly, meaning I'm often caught paying the highest fares.'' Michael Berneis, CEO of New York startup SynchIT.com Inc., spent $15,000 jetting to Europe to meet with partners and investors, so he saves on lodging by staying with friends.

While small companies may spend like royalty, the travel industry has treated them more like Rodney Dangerfield. And that's no small matter, considering that travel costs continue to outpace inflation. New data just released by Runzheimer International, a Rochester (Wis.) management consultant, projects that next year, increases will average 7%--the biggest jump ever (chart, page F.60). The culprits? Higher oil prices and a tight supply of hotel rooms, plane seats, and rental cars.

But here's the good news: The travel industry is finally starting to show small companies some respect. It's about time, considering that small businesses spent $75.3 billion on travel last year--a 40% chunk of the total business-travel market, according to travel industry studies. That sum is expected to reach $98 billion by 2004. While the Internet may have cut down on routine travel for the sake of ''face time,'' its global reach has put small companies in touch with new, far-flung customers and partners, travel experts note. By the same token, the Net has made it easier for travel companies to reach the elusive small-business market efficiently. Suddenly, they are unabashedly courting your business with new Web sites, promotions, and services. A few examples:

-- Delta Air Lines Inc. plans to launch MYOB Travel, an online service targeting companies with 5 to 50 travelers. Offerings include travel rewards, online booking, and online expense tracking.

-- Hertz Corp. says small businesses that book online can earn double frequent-user mileage through October, and it will waive the $50 fee for the benefits of Gold Club membership.

-- Continental Airlines Inc. has expanded its RewardOne program nationwide to all small businesses, doubling the points they can earn to win prizes.

-- This summer, British Airways, teaming up with GetThere.com, plans to open a small-business Web portal for booking air travel, car rental, and hotel rooms at discounted rates.

By taking advantage of such deals, tracking your travel dollars, and using those numbers as ammunition to negotiate discounts, you can slice 10% to 20% off your expenses, says Ron Stewart, managing partner for global transportation and travel at Andersen Consulting. ''For the first time, there are lots of opportunities for small companies to negotiate better deals.''

WEB TO THE RESCUE?
For the past few years, general-interest travel Web sites have ballyhooed their value to small businesses, but until recently, they offered more hype than utility. For instance, most online flight specials required an overnight stay on a Saturday, and tickets were usually nonrefundable. But, says Stewart, these sites are growing ever more sophisticated and functional.

The most promising development is the rise of Web-based travel services that pool small-business customers to offer them negotiated rates and discounts that can run anywhere from 10% to 40%. They act, in effect, as your outsourced corporate-travel department, reachable by phone or on the Web. Besides cost savings, they give you increased control over your expenditures by letting you track spending by every traveler in your company, post travel policies, and generate a monthly expense report. There are three major services with similar features, and with each, you have to call or e-mail the company to have a free password-protected Web page set up for your company's authorized travelers.

Costs vary from site to site. You won't pay a commission for online booking on RezPort, the Web service started by American Express One, AmEx's small-business division, or on biztravel@mycompany (www.biztravel.com), launched in January by travel agency Rosenbluth Interactive. But you'll be charged for booking over the phone. Others are more aggressive. CompanyTrip.com, launched last September by travel site TRIP.com, just announced it will start charging a $10 fee for all online bookings and $10 for changes. The company claims, however, that it can save small companies 30% on travel costs from what they would normally have to pay. Rival Biztravel says its airfare savings run 2% to 15%, and hotel savings can range from 10% to 40%. AmEx says RezPort customers are saving about 9% on hotels and 20% on airfare.

David B. Kirby, editor of Interactive Travel Report, a Rockville (Md.) business-to-business newsletter covering Net travel sites, says: ''Both Biztravel.com and TRIP.com are really good, but Biztravel has more editorial features, so if you're looking for the latest scoop on the travel industry, that's a better choice. I tend to like TRIP.com's functionality better. AmEx isn't quite there yet for the small-business market.'' Still, American Express serves 1,000 clients at its RezPort site, making it the largest and most established of the bunch. It also has 140 brick-and-mortar offices focused specifically on small-business travel services (www.americanexpress.com/americanexpressone).

Besides small-business-specific sites, check out some general-interest travel sites, such as Travelocity.com and Expedia.com. Both have added special features that appeal to small companies, such as Travelocity's new alternative-airport search feature, which lets you shop for the lowest fares within your region. SynchIT.com's Berneis often compares offerings on Expedia.com and Travelocity.com and favors their powerful search functions. He says: ''I do have a couple of travel agents that I run in tandem, but lately, about the only thing they've been able to do better than me was get me and my daughter to Disney World.''

AIRLINES: COMING HOME TO ROOST
In their efforts to bypass travel agents, major carriers are offering small companies perks once reserved for larger customers, such as special awards based on the volume of airfare you purchase (table, page F.56). That's on top of the awards your individual employees collect in their individual frequent-flier accounts. Continental's RewardOne program, reachable through its Web site (www.continental.com) lets you build up bonus points fast. For every $1,000 worth of travel, your company earns one or two points, depending on your route, and three points wins you an upgrade on a space-available basis. Just four points gets you five passes to the airline's executive lounge, the Presidents Club.

Not all the services are entirely Web-friendly, however. If you want to join the small-business programs of American Airlines Inc. or Trans World Airlines Inc., you'll need to call their toll-free numbers. Continental, on the other hand, has a link displayed on its Web site.

Which airline's program you choose depends on your travel habits. Says Andersen's Stewart: ''Pay attention to where you're traveling the most, and pick an airline to focus your travel spending on. Then deal with that airline directly.'' That's what Vagabond Productions did. Last January, Yolanda Thomas was floored by her travel agent's $23,000 quote to fly her husband's 10-member hip-hop band to Japan. So her assistant, Brenda Hull, contacted Delta's group-sales department and got $3,500 knocked off the price. Says Thomas: ''Now, we always go directly to the airline or hotel and negotiate. They usually give us at least 10% off.''

SCARCER HOTEL BARGAINS
Getting good breaks on hotel rates is much trickier, travel experts say, since demand has been high in major cities. Some big chains, such as Radisson, Holiday Inn Express, and the Four Seasons, have begun adding dedicated sales representatives at their hotels who are authorized to deal directly with small companies and offer discounts. If your hotel doesn't have one, ask for the small-meetings department or the corporate-sales manager. There are other tricks you can try, too. For instance, Berneis typically asks his corporate clients if they have any deals with hotels, then piggybacks onto those negotiated rates. And don't walk up to the front desk, bag in hand, for a quote--they know they've already got you. Instead, call in your reservation, even if you're right next door.

What about booking your room on the Web? Don't expect any bargains at hotel Web sites. The March, 2000, Hotel Pricing Survey, conducted by Donaldson, Lufkin & Jenrette, showed that savings ranged from as little as $1 to $20 off the room rate. Worse, in markets such as New Orleans, Boston, and Los Angeles, online prices were actually higher--sometimes by nearly 6%.

DRIVING SMALL BUSINESS
Your car-rental agency may not specifically earmark a program for small business, but almost all will give you a corporate rate, for savings of 5%. Sometimes the smaller providers offer the best deals. Business-travel expert Charles Leocha, author of Travel Rights and a columnist for Web site The Ticked-Off Traveler (www.ticked.com), says Alamo Rent A Car was the only one to aggressively court his business. ''The other companies don't even know I exist,'' says Leocha, who gladly accepted Alamo's offer to sign him up for a corporate rate despite his company's payroll of one. Alamo's Business Benefits program, for companies with annual car rentals totaling less than $50,000 a year, offers a 10% to 15% corporate discount and frequent promotions, such as free upgrades and free membership in its Quicksilver program for faster service.

Also aimed at smaller companies is Dollar Rent A Car Systems Inc.'s Small Business Account program. Its Fast Lane club, with no fees this year, offers new members upgrade coupons and corporate discounts.

All the car-rental agencies offer special club memberships, open to all businesses, with special promotions and perks such as speedy curbside delivery, but they often cost as much as $50. Hertz, however, just waived that $50 fee for small businesses that sign up for its Club Gold program on the Web. At Avis Rent A Car, a spokesman says the company is continually enhancing their program, which includes 5% discounts and reduced rates for liability coverage.

Does this flurry of attention to the small-business traveler mean it's time to pack up your skepticism? Perhaps not. Slifer says she's often been unable to get upgrades on crowded flights because a big corporate customer takes precedence. And Richard G. Barlow, chairman and CEO of Frequency Marketing Inc., a marketing company based in Cincinnati, complains: ''We pay the highest airfares, and I see no sign that the airlines care about small businesses. We're the ones they make all their money on.'' Perhaps so, but at least travel services are beginning to act like they knew it, too.

Almost As If They Liked You
Airline perks for small business are finally taking off as carriers seek to lure frequent fliers
 
Program/Contact Eligibility Features
American Airlines
Business ExtrAA 
800 457-7072 
 $10,000 minimum quarterly spending on airfare  Tracks flight expenditures; awards for free upgrades, free tickets, and AAdvantage Gold status
Continental Airlines 
RewardOne 
www.continental.com 
 5 or more employees  For every $1,000 spent on airfare, your company earns points toward Silver ONe Pass Elite status, President's Club, free travel certificates
Delta MYOB Travel
(Launch expected this summer)
5 to 50 travelers Company travel profiles, online booking and travel reports, mileage awards
Northwest E-Biz Perks
www.nwa.com
A valid federal tax ID number Each dollar spent earns one point redeemable for tickets, upgrades, Silver Elite WorldPerks
TWA Aviators Entrepreneur
800 325 4815
1 to 10 employees Quarterly expense statements; points for free upgrades, tickets, Ambassadors Club

DATA: BW frontier
 
 
Rules of the Road
Some ways small-business travelers can save big bucks

Play Piggyback
If you are doing business regularly with a large company, ask to take advantage of its discount deals with hotels and airlines.

Use Alternate Airports
The best fares and cheapest parking are found at airports in smaller cities near a major metropolitan airport (e.g., Baltimore instead of Washington, D.C.)

Fly the Upstarts
Smaller airlines often offer better deals and cater to the business traveler.

Mix Business and Pleasure
If you can set meetings for first thing Monday morning, take advantage of the airlines' weekend Web fares--and throw in some R&R, too.

Be Your Own Travel Manager
Review your staffs' most frequent destinations, and see if minor scheduling adjustments will yield any discounts. Check if hotels, airlines, or rental-car companies will reward your guaranteed business. Use your travel-spending data to negotiate discounts.

By Echo Montgomery Garrett

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