Buyer Be Aware: Opportunities Ahead

<B> Buyer Be Aware: Opportunities Ahead</B>

By David Meyer


Buyers of business travel services in most U.S. cities are entering a new phase of negotiating opportunity. A recent wave of consolidation in the hotel and ground transportation segments and an expected "soft" downturn in the economy around the turn of the millennium are improving bargaining conditions. More head-to-head competition among major carriers also has strengthened the buyer position at the table.

While hoteliers in the very biggest business destinations are still seeing a seller's market strong enough to give rise to new construction, the pendulum has turned in many U.S. markets. Suddenly relationships with corporate accounts, beyond the very biggest ones, are being valued in a way they have not for some time and negotiated prices are coming down.

The transformation of car and driver services into national and international one-stop shopping entities also is offering opportunities for corporate accounts to bargain for discounts and VIP services.

Even airlines are softening up after shifting capacity from Asia to key U.S. domestic and transatlantic business routes. For the moment, de facto consolidation through alliances appears to be breeding a raised level of competition, even in traditional hubs.

There also appears to be great potential to further improve the bargaining position through the development of direct connections between business travel buyers and suppliers through extranets, which link preferred carriers to the corporate intranet, to provide a new level of control of data to the business buyer.

It's been years since there's been a better time to approach the table and drive for better deals.