Spending on corporate group travel will grow by ten percent in 1997-for the third consecutive year-to nearly $80 million, according to the American Express 1997 Trends and Forecasts for the Business Travel Industry.
A stronger emphasis on educational seminars delivered by associations and stricter identification of group travel spending by corporations are among the drivers of the continued spending growth, the study says. Association-related educational seminars are expected to grow by three percent this year. Meeting-related travel also is increasing as companies add satellite and virtual offices.
"Stricter identification of group travel means companies are beginning to identify expenses that are really related to group travel but had before been considered part of other areas, like sales promotion," says Lars Holmquist, director for American Express Group Travel Management Services. "We consider this the first move toward corporate consolidation of group travel spending, just as business travel has been consolidated."
However, he adds, "with group travel, companies have only begun to scratch the surface. Eventually, consolidation of group travel will allow companies to make more informed decisions on where and when to hold a meeting. They may then be able to be more flexible in terms of destination or timing in order to realize greater savings."
Holmquist says the study's findings relating to lodging and airfare costs also point to the need for flexibility in corporate meeting planning. The study predicts hikes this year of eight to nine percent in business airfares, five to seven percent in corporate hotel rates, and four to five percent in car rental rates.
Lodging industry growth is occurring in the economy and limited-service segment, not in the full-service hotels used by meeting planners, says Holmquist. That means greater difficulty for people booking meetings on short notice and negotiating room discounts, particularly for small meetings. Small meetings-those with fewer than 50 participants-represent 69 percent of all corporate meetings, according to the study.
Brad Randle, a meeting planner for Irving, TX- based VHA, says he's had greater difficulty booking meetings on short notice, especially at resorts, for some time now. "To book a small meeting of 40 to 50 [attendees] now takes about six months' notice," says Randle. "In the past, if a meeting came up that wasn't on the books for us, we could plan it in about three months."
Companies to Frequent Travelers: Keep Your Miles Nearly four out of five companies do not attempt to recapture the frequent-flyer points earned by their employees, according to Runzheimer International's eighth biennial Survey & Analysis of Business Travel Policies & Costs.
Of the 282 travel managers surveyed in the Rochester, WI firm's study, 82 percent say they consider frequent-flyer bonuses employee property, ten percent view them as company property, and eight percent have arrangements that provide for sharing frequent-flyer points.
More than half of the companies surveyed either allow or do not address in their corporate travel policies the practice of employees arranging travel around frequent-flyer programs. "Although various companies have reported savings from a policy of recapturing frequent-flyer awards, companies deciding to exploit this opportunity must weigh the cost of losing valuable employees to competition and of disgruntled travelers refusing to travel on their own time," says Craig Lanza, survey editor.
EIBTM's Outlook on Meetings: Shorter, Sharper, Bigger Most conference planners expect their events to be larger and to cost participants more in 1997, according to the latest World Outlook Survey of the meetings market from the European Incentive, Business Travel & Meetings Exhibition (EIBTM).
More than 100 meeting planners from a dozen countries responded to the EIBTM survey. They organize an average of 15 events a year, ranging from ten to 500 participants.
According to the survey, 43 percent of organizers say they expect their events to grow in size and 52 percent expect a hike in the cost per participant. Continuing a recent trend, however, only five percent expect their conferences to last longer.
The survey also found a growing emphasis on return on investment in evaluating a conference. That emphasis is leading to an increase in shorter, "sharper" programs and the use of more complex technology in getting messages across.
Airline News American Improves Zone Fares American Airlines recently revised its zone-fare pricing for group travel, making it less expensive and more flexible. The new fares range from $235 to $556, translating into an average price reduction of 20 percent. (Fares to Hawaii cost more.) Saturday-night stays are no longer required, the maximum stay has increased from 14 to 30 days, and there are no penalties for block cancellations 12 days or more prior to travel. The zone fares apply to destinations within the 48 states, Hawaii, and Canada that are served by American Airlines and American Eagle.
Continental Convenes Meeting Execs Continental Airlines recently formed the Continental Airlines Meeting Program Advisory Board. Its 17 members, who met last fall, include corporate, association, and independent meeting planners.
The purpose of the group is to "fine tune our meetings products," explains Tracy Sweeney, director of assembly travel and national telesales with Continental. The board plans to design a better system for tracking attendees who fly the official carrier, ensuring that organizations will get full credit, and to develop more creative reward programs. Sweeney says the advisory board will also help Continental initiate customized programs for corporations.
Doubletree/Renaissance Deal Pending Just months after Doubletree Hotels Corporation completed its $1.2 billion purchase of Red Lion Hotels, it announced plans to acquire the Renaissance Hotel Group in a stock and cash transaction of approximately $850 million. The deal, if completed, would make Phoenix-based Doubletree the third-largest hotel management company in the U.S., and put it on a par with Hilton and Marriott, according to the Wall Street Journal. The combined chains will have more than 100,000 hotel rooms at 382 hotels worldwide.
At press time, USAToday reported that Wyndham Hotels and Starwood Lodging had expressed interest in bidding for Renaissance. However, Renaissance and Doubletree have agreed to a $15 million "breakup fee" to be paid by the company that pulls out of the deal.
Four Seasons-Regent Strikes Deal with Carlson Hospitality Four Seasons-Regent and Carlson Hospitality have created a partnership for the future development, management, and marketing of Regent hotels throughout the world. Four Seasons will continue to operate and manage existing and new Regent hotels and will help develop standards for growth of the luxury chain.
Carlson Hospitality, the Minneapolis-based parent company of Radisson Hotels, will acquire the rights to the Regent name for new development and will also establish a luxury hotel division to expand the Regent chain through new managementand franchise agreements. Carlson plans to double the size of the chain during the next two to three years. There are currently nine Regent hotels and 28 Four Seasons properties.
Patriot Acquires Carefree Patriot American Hospitality will acquire Carefree Resorts for an estimated $210 million. A Dallas-based real estate investment trust, Patriot American has more than 40 upscale hotels; Phoenix-based Carefree has five exclusive resorts. They are The Boulders in Carefree, AZ; The Peaks Resort & Spa in Telluride, CO; Carmel Valley Ranch in Carmel, CA;
The Lodge at Ventana Canyon in Tucson, AZ; and The Buttes in Tempe, AZ. Under its new ownership, the company will continue to use the Carefree Resorts name, and its current management will remain.
Welcome, Wingate Billing itself as the first new-construction mid-market hotel chain to be introduced in more than a decade, Wingate Inns has 25 properties under development in Texas, the South, and the Midwest. The hotels will include meeting space and boardrooms, as well as amenities for business travelers, such as two-line speaker phones with data ports and free local calls and long-distance access. For more information, call (800) 441-1748.
Loews Adds Hotels At a time when luxury hotel development is rare, the 14-property Loews chain recently broke ground on the 700-room Loews Miami Beach Hotel, the first hotel to be developed there in 30 years. The property will have 85,000 square feet of meeting space. Loews also announced plans to develop two properties at Orlando's Universal City Resort (slated to open in 1999): the 750-room Portofino Bay Resort and the 1,200-room Royal Bali Hotel.
Upcoming Meetings * March 5 to 6, Beyond Borders Conference, sponsored by Adams/Laux Publishing and PGI, New York Hilton. Call Ann Boehme at (516) 561-4223.
* March 19 to 23, Society of Incentive & Travel Executives (SITE) European University, Gstaad, Switzerland. Call SITE at (212) 575-0910.
Little Company, Big Honor Hudson Hotels may be a small fish in an industry dominated by whales, but that hasn't kept it out of the limelight. Hudson's Chairman and CEO Anthony Wilson was named the 1996 Top Hotel CEO by HVS International, a New York-based lodging appraisal firm. (Last year's award went to Michael Rose, chairman of Promus Hotel, a large operator of more than 725 properties.)
The HVS award goes to hotel executives whose companies deliver the best value to investors, based on a formula comparing CEO salary with return on equity and stock price appreciation. Hudson's stock traded at 2.5 in 1995 and later skyrocketed as high as 10.5 last year.
Hudson's agreement in 1996 to acquire 12 hotels is expected to increase revenues by 200 percent this year-to $35 million.