Business Travel Continues, But on the Cheap

For now, many companies are cutting back. Drew Ramsey, a 33-year-old information security manager in Phoenix who is a Southwest Airlines frequent flier, says his company has essentially shut down business travel.

"Any business travel has to be a necessity; otherwise people are being asked to use videoconferencing or teleconferences," Ramsey said.

Traffic in high-end airline seats fell 22 percent in April, compared with the same month a year earlier, according to the International Air Transport Association. Meanwhile, the number of travelers on coach tickets rose 0.3 percent.

With a shrinking pot of corporate travel dollars, airlines like Southwest are trying new strategies to get business travelers on board. Ramsey said Southwest offered to fast-track him to "A-List" status. That provides a year of reserved-boarding privileges to passengers who belong to the airline's frequent-flier program and take a certain number of flights within a given period.

Airlines also are giving business travelers things like Wi-Fi, satellite radio, advance seat assignments and priority boarding to lure them in.

In the hotel industry, all kinds of chains that rely on business travelers are feeling the pain. Extended Stay Hotels LLC — which caters to business travelers who need longer-term lodging at lower rates — has filed for Chapter 11 bankruptcy protection, citing a heavy debtload and a sharp drop in business travel.

Starwood Hotels & Resorts Inc. is offering a 4 percent discount to business meeting planners who book an event for 10 or more room-nights at some of its brands, including the W, Westin and Sheraton chains. They also get a free snack break from PepsiCo Inc., through Aug. 31, and a hefty bonus of loyalty program points they can use for personal travel.

Hotels are not as agile because they typically negotiate corporate rates months or years in advance. So the rate cuts they're offering now could have a long term impact on revenue.

Continental Airlines CEO Larry Kellner said at a June investor conference that his airline is working its "business (traveler) side very hard because ... we could also see a recovery much more quicker if we could get the business traffic back on the airplanes."

Copyright 2009 The Associated Press.  All rights reserved. This material may not be published, broadcast, rewritten or redistributed.