Travelers Add More Leisure To Business Trips

Corporate travelers more frequently are tacking on leisure time to business trips to make the most of expenses already covered by employers as the continuing economic downturn slows separate discretionary leisure travel spending.

Some corporate travel managers and travel management companies are facilitating leisure travel bookings as add-ons to business trips as an employee benefit, to drive behavior and in rare cases to gain negotiating leverage.

Original BTN research fielded for last year's Corporate Traveler study (BTNonline, Oct. 27, 2008), showed 24 percent of 511 business travelers who flew at least six times a year used a corporate travel department or travel management company to add a leisure element to a business trip. Twenty-one percent used those channels to arrange leisure travel.

On average, four of those respondents' business trips contained leisure add-ons, compared with three in 2002, the last time BTN conducted such corporate traveler research. The 252 respondents in last year's report who flew more than 10 times a year averaged six business trips with leisure extensions.

Several travel management executives and travel buyers said contracts between the two often have some leisure travel terms and conditions, whether for executives or as employee benefits. Some TMC executives noted corporate travelers' increasing use of these services by leveraging loyalty or rewards programs with hotels on the back end of a business trip or booking private rates offered through TMC leisure divisions or corporate-negotiated supplier rates.

"What has changed is that it's been a way for people to still have a vacation even though they are doing a little belt-tightening," said Orbitz for Business senior vice president and COO Dean Sivley.

Some travel management companies are reconfiguring leisure programs to leverage them with corporate accounts.

Carlson Wagonlit Travel in the second quarter plans to formally launch a new leisure service in the United States, open to its corporate accounts and similar to a model in use in Canada and other countries, said CWT North America vice president of client services Brian Hace. The program aims to fill the void after the Carlson Leisure Group's management buyout in January 2008.

CWT already handles $350 million in leisure travel with 650 dedicated leisure agents, including the U.S. government's employee leisure program in North America. Corporate clients will be able to access private fares through CWT's preferred supplier programs, separate from an executive-level service program, Hace said.

Last fall, HRG and Valerie Wilson Travel formed a revenue-sharing joint venture that transitioned four HRG agents who handled corporate accounts' leisure travel services to Valerie Wilson Travel's Greenwich, Conn., office.

It often is too difficult to leverage corporate and leisure travel expenditures in supplier agreements, according to CWT's Hace, but "at some point clients will want to roll out some incentives using the leisure program that can drive behavior."

While vacation reservations separate from a corporate trip usually are directed to an agency's leisure division, less complex reservations or those that accommodate an accompanying spouse often go through corporate agents, which for some travel management companies can be a significant revenue stream.

BCD Travel executive vice president of global business solutions, sales and marketing Louise Miller said added-on leisure volume accounts for about 2 percent of the volume processed through BCD's corporate travel operations globally. Between $100 million to $150 million of the $4 billion to $5 billion processed in the United States alone is leisure volume derived from corporate accounts, she said.

Some corporate travel programs steer clear of the responsibilities of employee leisure offerings. Other corporate travel buyers adopt their agency's leisure services, such as the Travelocity@Work program, or provide hyperlinks to leisure booking sites.

Sybase purchasing manager of the global card and travel program Patricia Carlin implemented a leisure travel drop-down reason code in the company's preferred online booking system, Orbitz for Business, in which travelers are required to use personal credit cards for payment. The reason code enables her to segregate leisure volume from reporting. As for facilitating the leisure booking process, Carlin said, "I don't see any reason not to. It's not like it's being centrally billed."

Moog manager of travel services Kathy Hall-Zientek, who manages the East Aurora, N.Y.-based company's ARC-accredited Corporate Travel Department, this year plans to roll out an employee leisure offering with a local leisure travel agency. Listing the agency on the Moog intranet is "not only going to be financially beneficial to Moog as a referral, but also will offer a discount for Moog employees," said Hall-Zientek. Leisure and corporate volumes will remain separate, but Hall-Zientek plans to have a commission-sharing model with the agency as a new revenue stream for the CTD.