Airlines during the past 12 months have been far less willing to discount their meeting fare packages, according to an exclusive Meetings Monitor survey of corporate meeting buyers. As a result, use of the carriers' standard meeting products has increased, while use of most negotiated meeting fares has withered.
According to the new Monitor survey, only 7 percent of corporate meeting buyer respondents indicated that their meeting airfare discounts are greater now than they were one year ago. About 26 percent said discounts are smaller, with the rest indicating that they are about the same. In 2002, about 20 percent said their meeting discounts were better than they were in 2001, and only 11 percent said they were worse.
Airline officials said it's no accident.
"We're not offering greater discounts at this time," said an airline sales executive who requested anonymity. "We're very competitive on meeting discounts in the lower buckets, so we don't have to."
Although all corporate travel—transient and group—is down, the executive added, there is no overwhelming trend in the relative use of one meeting product over another.
The hard line on meeting airfares is apparent in the Monitor's breakdown of the types of group air discounts buyers receive. Approximately 62 percent of 101 respondents said they use the carriers' standard meeting fare—accessible to anybody who gathers the required number of people—which is 5 percent off full coach fares and an additional 5 percent if the advance purchase level is 30 or 60 days, depending on the airline
(Meetings Today, Sept. 23, 2002). That number is up from 47 percent in last year's poll.
About 21 percent of respondents said they receive between 11 percent and 20 percent off the lowest applicable fare, which is an increase of roughly five percentage points from last year's poll. Approximately 8 percent said they receive even more than that, a decrease of about four points from 2002. However, the airlines said the standard package might be their only option going forward.
"The standard products are what we are working with, and we're not negotiating off of that," said American Airlines group and meeting sales product manager George Coyle. "We are holding the line on 5 percent and 10 percent."
In fact, Coyle said that the 7 percent of Monitor respondents who claimed they received greater meeting discounts is too high and should be zero.
"I assume those respondents are those who use only corporate transient agreements," he said. Coyle said the use of the airlines' standard 5 percent and 10 percent packages has been quite high, relatively, which he attributed to the difficulties of managing group travel.
"It's tough for a meeting planner to take responsibility for 50 people," Coyle said. "It's hard to orchestrate. Five percent and 10 percent guarantees savings, and it's much easier to administer."
Though the percentage of respondents who use standard zone fares, offered by all major carriers, grew by five points, to 37 percent, that number still is well behind the percentage who use meeting fares. That did not surprise Coyle, who said the main allure of zone fares is the lack of a Saturday-night stay requirement, but noted weekend meeting travel is somewhat higher this year.
Of course, many corporations do not negotiate meeting fares at all and simply weigh the carriers' public offerings against their own companies' negotiated transient fares
(Meetings Today, March 24, 2003)."We've usually found that the deeper discounts are on our transient fares but the more flexible fares, the ones we are more able to use, are on the meetings side," said Cyndi Perper, Invensys Plc global commodity manager for travel. "We'll use the zone fares or they'll suspend some advance-purchase requirements on the meeting side."
Invensys maintains a decentralized meetings management structure and limits its use of meeting products to zone fares, said Perper, who is based in Berkeley Heights, N.J.
The firm measures the cost of using its negotiated transient fares against the carriers' public zone fares and will book the lowest price. That still tends to be the domain of Invensys' negotiated transient fares, she said, despite the significant limitations carriers have made to all corporate transient programs.
"It's rare that zone fares are the better price, and that has stayed about the same," Perper said. "The idea for us is to get the lowest fare no matter what."
Similarly, Palo Alto, Calif.-based Cisco Systems Inc. limits its use of airline meeting products to public zone fares. Though price typically will carry the day, said manager of meeting services Michele Snock, Cisco bases its decision on whether to use zone fares or negotiated transient fares on more than quantitative price analysis.
"There are fewer restrictions with zone fares, and we'll have meetings with 5,000 people and 1,000 changes," Snock said. In those situations, the company must balance the ease of changing passenger name records—airlines typically do not require passenger names at the time seats are blocked out for zone fare travel—with potentially higher costs. "That's a choice we have to make," she said.
Buyers have been taking advantage of other standard meeting products as well. About 21 percent said they have received a free fare for every 40 booked, a common feature of the carriers' programs. About 5 percent said they did even better and received one free fare for 30 booked, although that's down slightly from last year.
"That is negotiable," according to AA's Coyle. The carrier's standard domestic meeting package offers one free fare for 40 booked. "We will also negotiate advance purchase, but only with someone we're familiar with," he said. "We keep profiles. If you're booking with us for the first time and you want seven days advance purchase, we get nervous."