This article from NYTimes.com has been sent to you by psa188@juno.com. The New Breed of Business Travel July 16, 2002 By JOE SHARKEY SALT LAKE CITY -- THE Salt Lake Tribune had one of those big bold front-page headlines you sometimes see in movies. "Record Heat Sizzles State," it cried, and the crowd of about 1,000 people gathered for a reception in a downtown plaza that remained sunny and very hot even at 8 p.m. was plenty thirsty. This being a festive crowd of travel-industry executives and corporate travel managers in town for the annual convention and trade show of the National Business Travel Association, lemonade was not the beverage of choice. In a state where jokers say it's easier to buy a firearm than a gin and tonic, the booze was flowing impressively behind the guarded perimeter of the plaza. "This sure is one very happy crowd," said a frazzled young woman tending bar at a drink tent where the lines were 12 deep. It seemed to be a far merrier crowd, in fact, than the one in attendance last summer during the same organization's trade show in Atlanta. Then, even before the catastrophe of Sept. 11, the business-travel industry was staggered, demoralized and bewildered after a souring economy slammed the brakes on freewheeling spending for business travel. "I think the industry had its hard landing last year," said Allison Marble, a spokeswoman for the business travel group. Now, she and others said, as the industry regains its footing, business travelers and corporate travel managers appear to be emerging from the gloom, blinking at the light and contemplating an entirely new environment. Virtually everything about business travel, from the buying behavior of the consumers to the fundamental business models of the airlines, hotels and other suppliers, has changed, probably permanently. The major airlines, losing billions with no realistic turnaround in sight, are facing the most difficult choices. No one I spoke to among the 4,200 people attending the trade show here expressed any faith that the airline industry's fare structures - which depend on business travelers' paying fares that can be five times as much as those for the leisure-travel market - can even survive the year. "Even as people who run those airlines cut out restrictions on business fares and do everything they can to get that market back, I think they finally realize that business travelers' behavior has changed, and it just won't change back," said Krista M. Pappas, the senior vice president for strategic development at FareChase Inc. It is no longer a debatable point that large numbers of business travelers are now flying on fares the airlines intended for leisure travelers. Now, with the financial collapse of one or more major airlines no longer an unlikely possibility, those airlines still appear to be dithering and fiddling with selected fare discounts and selected easing of restrictions, while stubbornly clinging to bedrock fare structures with the futile tenacity of the defenders of the Maginot Line in 1940. The major airlines have steadfastly insisted that the business traveler has merely cut back on trips, and will one day resume more frequent flying. However, industry professionals say a large and sharply growing number of business travelers have actually dropped from the radar simply because they have slipped into the cheap-fare world of the leisure-travel market. American Express officials noted yesterday that more than 40 percent of corporate tickets the company books now are so-called nonrefundables - the cheaper, advance-purchase tickets that traditionally have been classified as leisure fares. Business fares are generally classified as full-price tickets that are fully refundable, with no restrictions like requirements for a Saturday night stay. Two years ago, only a quarter of corporate tickets were nonrefundables, said Nancy Carlin, an American Express vice president. As major airlines scramble to fill seats at almost any price, even restrictions like the Saturday-stay requirement, intended to discourage business travelers from buying leisure fares, are fading on many routes. Often, she said, the only real restriction on a cheap advance-purchase ticket is its nonrefundability. An unused nonrefundable ticket may be reused on the same airline within one year, with a penalty fee of $75 or $100. Because so many business travelers now use electronic ticketing, corporate travel managers worry about the tendency of employees to forget about those tickets, and let them expire, unused. American Express said yesterday that it would soon introduce a new service, Ticket TRAX NR, that automates for company travel managers the cumbersome process of keeping track of unused nonrefundable tickets, and applies their value to future tickets. American Express also announced a new centralized online booking tool called TravelBahn Portal, to gather on a single internal corporate site all air fares on the Web, while at the same time enabling company travel managers to compile the booking data they need to negotiate discounts effectively with airlines, hotels and other suppliers. Ms. Pappas, meanwhile, said that her company was releasing today a new version of its Web Automation software that gathers on one portal the hundreds of thousands of ever-changing fares available on over 150 travel Web sites. She said that the vastness of fare information available online was having an impact on travel booking that was only beginning to be understood, even by industry professionals. "There is almost no loyalty left" among customers to specific airlines, other than that bound by frequent-flier upgrades and schedule conveniences, she said. "Once the Internet took hold" the airlines' assumptions about the viability of their existing fare structures and customer bases "went to hell in a handbasket," she added. "It's now sort of the Wild West" in the distribution of air fares, said Pam Arway, the executive vice president of American Express Corporate Travel in North America. As business travelers find their way in the new environment, it should not be hopelessly complicated to make the arrangements. "You want to get from Point A to Point B," she said. "That should be easy." http://www.nytimes.com/2002/07/16/business/16ROAD.html?ex=1027828742&ei=1&en=d864905a5ac6b7af HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@nytimes.com. Copyright 2002 The New York Times Company