BTI UK: Short-Term Hotel Cancellations Soar
Lead times for cancellations of U.K. hotel bookings have shortened dramatically during the past year, according to the travel management company BTI UK. The statistics show that while fluid pricing for both accommodations and air tickets makes advance booking an effective way to cut travel costs, accelerating economic activity is forcing travelers to book and change trips at ever-shorter notice. BTI UK's figures reveal that 12 percent of hotel cancellations by its clients were made on the day of arrival from January to June 2004, which doubled to 24 percent in January to June 2005. In many cases, canceling at short notice meant the traveler had to pay part or all of the room charge. Cancellations the day before also almost doubled over the same period, rising from 8 percent to 15 percent.
"Increased business activity in certain sectors means some of our clients' travelers are juggling their itineraries more than they were a year ago," said Chris Fry, corporate and marketing director for BTI UK parent company Hogg Robinson. "As a result, they have a greater need for flexibility, the other side of which is they lose the cheaper prices." In the case of air and train fares, Fry added, fares bought well in advance are so much cheaper that it may be worth buying three tickets and throwing away two rather than buying a pricier, fully flexible ticket a day or two before departure. Other statistics revealed at BTI UK's annual client conference in London on Sept. 21 showed why advance air tickets are difficult for business travelers to use. Forty-five percent of the tickets the TMC books for its customers are changed before the journey starts, even though 70 percent of reservations are made within one week of departure. According to BTI UK, 35 percent of reservations are canceled and 8 percent to 12 percent are refunds.
A mixed pricing picture is emerging for airfares. Between the United Kingdom and the United States, average business class fares paid by BTI UK clients have fallen 2.2 percent since 2003 to £2,766 (US$4,911), while economy fares have climbed 14.1 percent to £1,108 (US$1,967). However, the economy class figures are skewed by a growing move from both standard economy and business-class cabins into the "fourth" cabin, such as British Airways' WorldTraveller Plus and United Airlines' Economy Plus, which are classified as economy in these statistics. On U.K. domestic and European routes, average fares rose 6.5 percent over the past two years in business class. Economy class fares decreased 6.7 percent domestic on U.K. domestic routes and 3 percent on European routes.
CWT Cites successes, Nabs Austrian Network
Carlson Wagonlit Travel CEO and president Hubert Joly is celebrating one year at the helm with good news: Year to date, over the same period as last year, the mega travel agency's net income, excluding asset sales, doubled and net revenue rose 30 percent overall, 9 percent excluding last year's Maritz Corporate Travel and Protravel acquisitions. New corporate sales were up 20 percent from the first half of 2004 to $850 million in 2005. Small and midmarket travel buyers accounted for nearly half of that. Among one dozen new larger clients are BASF, Barilla, Fujitsu and Google. In announcing these results last month, Joly also noted the success of the Maritz integration under Jack O'Neill, chief operating officer, North America, which yielded $27 million in synergies. Joly said more than 50 percent of CWT's U.S. commercial transactions are conducted online and that number will grow to 60 percent by 2007.
With the Maritz integration complete and the integration of the French travel management firm Protravel well underway, Carlson Wagonlit last month purchased the business-travel operations of Austrian travel network Raiffeisen Reisen GmbH Wien, pending final approval by regulatory authorities.