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Business Travel Isn’t Going Anywhere

Austin travel agents have noted an increase in business travel. Juan Portillo, president of Tramex Travel, said he has seen travel increase about 20 percent, while Marina Byrum, director of operations for Sunbelt Travel, said her business travel bookings have increased about 10 percent.

Both companies do a majority of their work in business travel. Byrum’s firm handles travel for such companies as Lockheed, Pharmaco, GSD&M and 3M. Tramex Travel works with The Continuum, Texaco Chemical Co., Schlumberger Austin Systems Center and many mid-size companies, he said.

Portillo said he did a survey of the top 30 companies and found that most are spending more money on travel this year.

“It just makes sense,” says Dave Landry, of the Juice Conference. “Travel is key to most companies’ sales process, and fortunately, it still pays big dividends.”

No one really focuses on the travel industry as an indicator for the economy, he said, but he has seen the phenomenon before: As travel increases, the economy is not far behind.

In 1991, many people would make a phone conference call in lieu of buying a plane ticket, Byrum said. They were leery of traveling both before and after the war. But travel levels are back up to pre-war levels.

Portillo said this summer’s price wars were aimed at vacationers and did not help the business traveler much at all.

Airline deregulation raised expectations that cost would come down as a factor of more service and more competition, Portillo said. It created an environment of expectations of all sorts of things that did not happen.

On one hand, airlines are extremely complex and expensive to run, he said. On the other hand, competition is so severe it creates unnatural behavior, he said.

“Airlines are like sharks feeding in a frenzy. No one can tell you they benefitted from the little sale they had in June,” Portillo said. “All those promotions were aimed at the utilization of overcapacity. There are fewer carriers, but more spaces because they continue to expand.”

Despite increased travel, more companies are watching what they get for their money and looking for other options. To analyze how travel money is spent, agencies have set up complex accounting programs.

“We have very sophisticated reporting systems,” Portillo said. His system is able to report exact costs and spot patterns of potential abuse, he said.

Sematech’s reports include monthly savings, equality and exception reports on air travel and monthly usage reports on cars and hotels, Smith said.

To keep tabs on Lockheed employees’ budget, Guys’ travel audit staff interacts with Sunbelt several times a week.

“We have some controls in place through them,” Guys said. “Every week, they furnish us with a copy of the billing, which we forward to California.”

Byrum said her reports include what fare the traveler paid and whether there was an alternative available at a higher or lower price.

Her booking system also features an automated quality control program that will check to see if the fare purchased is the lowest. If a lower fare is found, it also will see if there are any seats available so her company can notify the traveler of a possible savings.

When the expense report comes in from the traveler, it is then reconciled with the information received from the travel agent.

“We’re not an easy customer,” Guys said. “We have a lot of government constraints that our supplier needs to understand.”

Because they are a government contractor, Lockheed has to stay within maximum allowable charges on such items as air fares and room rates, Guys said. A certain percentage of some travel expenses is charged back to the contractor. Those that aren’t are charged to overhead.

“One way or another, it gets back to the government,” he said.

Companies expect the travel agent to be the expert, Portillo said. “They expect you to be right. Total accuracy, that’s the key.”

A travel agent has to understand the needs of the business traveler, he said.

“You’d be surprised at how many travel agencies don’t know what a business traveler goes through. We know it is not fun and that it’s a necessity for conducting business.”

At Sunbelt, dedicated personnel handles Lockheed’s travel needs, Simpson said.

“The relationship is often held up as a model for other Lockheed plants,” she said. “They are extremely familiar with our financial policy and find us the lowest air fares and lowest hotel rates.”

Despite the increase in travel, companies are looking to new ways to save travel money, including faxing, conference calls and consolidating trips.

Lockheed has cut some travel time by installing a state-of-the-art video teleconferencing system.

“We’re moving more and more into a team-based approach and we collaborate more with the other Lockheed companies,” Simpson said. The video teleconferencing system cuts down on travel and allows much more involvement.

A study done before the system was purchased indicated it would pay for itself in the amount of travel money saved.

The equipment has been in operation for only two months, so they are not yet sure how much it will save, Guys said, though it stays booked.

The company also is making its employees more accountable, because the budget has limits and if they go over the limits, there may not be any money left, Simpson said.

Despite all efforts to cut down on business travel, it will never be eliminated.

“It ain’t fun anymore,” Simpson said. “The terminals are crowded and smoky and there are delays. And we have a lot of people with young families.

“It’s not ‘Where do you want me and when?’ anymore,” she said.

But business travel will never be replaced, Byrum said. And as technology develops, the airlines will utilize it to make air travel a more viable option.

“People still like to have some personal contact,” Byrum said. “They still have hands to shake and contracts to sign.”

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