Business Travel News - October 13, 2008 - (Page 3)

NEWS Buyers To See Flat Mtg. Budgets As Airlines Eat More Of Pie BY ELISSA HUNTER Meeting buyers can anticipate flat budgets in the upcoming year, but should expect to spend more of their budget on airfare, and are looking to reduce hotel expenditures or cut the number of meetings planned to offset that increase, said several industry consultants. “Once we put an air budget proposal in front of certain customers, they’re going, ‘Wow,’ ” said Paul Salvatore, president of event and meetings management for HRG North America, adding that is especially the case in smaller cities with higher airfares. “We’re not even proposing destinations where lift has been reduced,” he said. “It’s taken a big effect on next year’s meetings.” Peter Moen, vice president of business development for Carlson Marketing, said that while he anticipated total meetings budgets remaining flat, “some of the elements will change a little bit. Some corporations are potentially moving down in hotel tier level to try to make up for the increase in airfare costs.” Mary MacGregor, vice president of marketing and business development for BCD Meetings & Incentives, added, “Proportionally, their dollars are finite and they’re looking at how they allocate them. Airfare is a consideration as a percentage of the overall budget. It’s a ON THE RECORD It is growing increasingly possible that 2009 industry fuel expense could be lower than in 2008. JAMIE BAKER, JP MORGAN AIRLINE ANALYST, PAGE 14 greater percentage than we’ve his- our smaller meetings into larger torically seen, so that means that events,” said Patricia Carlin, purthere are some potential consider- chasing manager of global card and ations with regards to the hotels, the travel for Dublin, Calif.-based destinations and some of the event Sybase. She anticipates meetings inclusions that our customers are spending in her company to remain looking at to offset the increase in flat. “It’ll have an effect in how we airline spend.” spend our air, because if you have a Klamath Falls, Ore.lot of little meetings For on-demand Webcasts, based Jeld-Wen is losfor people going all see btnonline.com/Webcasts over the place and you ing lift in its local airport, causing employees to travel can consolidate that to one larger more than one hour to the next-clos- event that has more population, est airport. you’re going to spend less money.” “We will definitely see an increase Travel management company exin air cost,” said Jeld-Wen meeting ecutives said the news is better on planner for aviation and travel serv- the hotel side. ices Debbie Douglas. “We are defi“It looks as if they haven’t innitely advising people budgeting for creased as much,” Salvatore said. meetings and travel to add the addi- “It’s not a buyers’ market by any tional costs of cars and hotels.” means, but it is not as tight as it was Other buyers are trying to hold in prior years. There are some opfewer meetings to cut down on tions this year.” meetings—and air—spending While demand changes by city Continued on page 8 “We’d like to consolidate some of CONTENTS October 13, 2008 Issue 665 Vol. 25, No. 14 Hilton Taps Car Rental Exec NEWSMAKER Inside Track: DL-NWA merger awaits only DOJ . . . . . 4 14 Profiles In Travel Management: CVS’s prescription . . . . 6 INDEXING AIRFARES BTN Research: 2008 Expense Manager Survey. . . . 10 Harrell forming airForum: Oil speculators flipping two-headed coin . . 12 fare futures market. Aviation: Experts develop airline futures index . . . . 14 Ground Transportation: Co. consolidates limo . . . . . 16 Destinations: Vegas suffers deep air service cuts. . 18 Asia/Pacific: Hotel occupancy declines. . . . . . . . . . 20 Washington Wire: U.S. to double Amtrak funds . . . . 26 FIND DAILY NEWS UPDATES AND MORE AT WWW.BTNONLINE.COM BTN (USPS 0728-870, ISSN 8750-3670) is published monthly, except semi-monthly in March, May, July, September and October by Nielsen Business Media Inc.,770 Broadway,New York,NY 10003,tel.646-654-5000,and is distributed free of charge to qualified corporate travel buyers and travel agents specializing in business travel in the United States and Canada. The cost of a subscription to non-qualified subscribers is $119 in the U.S.; $135 in Canada; $135 in Mexico and Central America; $200 in South America and Europe; and $200 in Asia,Africa and Australia; payable in advance in U.S. dollars. Registered for GST as Nielsen Business Media Inc. USA GST No. 124513185. Periodicals postage paid at New York, NY, and additional mailing offices. Canada Post Publications Mail Agreement No.40031729.Return Undeliverable Canadian Addresses to:DHL Global Mail 4960-2 Walker Road,Windsor,ON N9A 6J3. Business Travel News is a trademark owned exclusively by Nielsen Business Media Inc.Copyright © 2008 by Nielsen Business Media Inc.Reproduction of this magazine,in whole or in part,is prohibited unless authorized by the publisher.Editorial and advertising offices:770 Broadway,New York,NY 10003.For address changes (please include mailing label), single copy sales ($10 per issue including shipping and handling, prepayment required), subscription information, and other customer service inquiries,write to Business Travel News,P.O.Box 1187,Skokie,IL 60076,or call 847-647-7987 outside the U.S. POSTMASTER: Send changes of address to BTN, P.O. Box 1187, Skokie, IL 60076. Printed in the USA. Hilton Hotels Corp. has hired car rental industry executive Thomas Kennedy to oversee its global financial operations at a time when the hotel company plans to rapidly increase its international presence. Kennedy began work last month in Hilton’s Beverly Hills, Calif., headquarters as the company’s executive vice president and chief financial officer. He most recently served in the same position for the U.S., Canadian and European operations of Vanguard Car Rental, parent of the National Car Rental and Alamo Rent-A-Car brands. He also worked in a variety of executive and management positions at Northwest Airlines from 1992 to 2003, as well as positions outside the travel industry at Chiquita Brands International, Bank of Yokohama and Merrill Lynch Capital Markets. “Tom brings a wealth of experience and invaluable international credentials to Hilton’s finance function at a key time for our company,” Hilton president and CEO Christopher Nassetta said in a statement. “Having worked in travel and service-related industries, he adds further depth to Hilton’s leadership, and I have great confidence that Tom’s vast corporate finance experience will play a key role in the continued growth and evolution of Hilton as we execute on our strategic plan.” Hilton, having gained control of its international operations a few years ago, now is undergoing aggressive expansion of its brands overseas. Jonathan Gray, senior managing director of Hilton parent The Blackstone Group, recently said he would like to see Hilton’s U.S.-international ratio of hotels increase from four to one to a 50-50 split in the next five years (BTNonline, June 9). —Michael B. Baker Business Travel News www.BTNonline.com Monday, October 13, 2008 3 http://www.btnonline.com/Webcasts http://WWW.BTNONLINE.COM http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - October 13, 2008

Business Travel News - October 13, 2008
Contents
Inside Track
Profiles In Travel Management
BTN Research
Forum
Aviation
Ground Transportation
Destinations
Asia/Pacific
Washington Wire

Business Travel News - October 13, 2008