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Travel discounts ahead
June 19, 2001: 3:53 p.m. ET

Corporate travel cutbacks have begun to hit hotels and airlines
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NEW YORK (CNNfn) - Hotels and airlines already are beginning to feel the effects of cuts in corporate travel expenses. As fewer business travelers are passing through their doors, many travel-related businesses are offering discounts and promotions to attract the hardy few who still are on the road.

And who is going to benefit from the cut rate hotel rooms and discounted airfares? It may well be you.

Across the nation, Ramada Inns and Marriott Hotels are offering free night stays. At Omni Hotels, the third night is free. Comfort Inns, Quality Inns and Econolodges all are giving guests a free tank of gasoline when they stop in. Holiday Inns are giving away travel companion certificates to guests in their hotels in the United States.

Airlines, too, have been cutting some of their prices, according to American Express Co. The average fare paid for a one-way airline ticket in the United States fell from $319 in March to $301 in April, according to American Express.

Corporations squeeze travel budgets

At a time when many companies have been forced to lay off employees and have been turning in far from stellar financial performances, there is a growing number that no longer can justify paying pricey hotel bills or lavish meals on the road. Some companies, after complaining of higher business-class fares, have been squeezing their executives into (gasp!) coach.

  graphic SPECIAL OFFERS  
    Special hotel offers include:
  • Free nights at Ramada, Omni and Marriott
  • Free gasoline at Comfort, Quality and Econolodge
  • Companion certificates at Holiday Inn
    The promotions and discounts may have been designed to attract those business travelers who have been curtailing their travel in the past several months, but any traveler can take advantage of them.

    According to a recent survey by the National Business Travel Association, 68 percent of U.S. corporations have been effected by the recent economic downturn and have been slashing their travel expenses to control their budgets.

    "Corporations have decided to eliminate travel as a cost-saving measure," said Marianne McInerney, executive director of the National Business Travel Association. "As with other corporate functions, it is necessary to determine whether an organization benefits financially by sending people on the road."

    The prices consumers pay for hotel rooms have begun to slow, according to Smith Travel Research, which tracks hotel prices nationwide. And in some select markets, discounting has been more aggressive than in other cities. In New York City, for example, hotel prices have been falling for three months. Hotel prices in Orlando, Fla., have been on their way down for the past two months.

    According to Hendersonville, Tenn.-based Smith Travel, other cities whose hotel prices have declined in recent months include Phoenix, Ariz.; Philadelphia, Penn.; and Nashville, Tenn.

    As expected in an economic downturn, the sector that has been hardest hit is the luxury sector. Occupancy rates at high-end hotels have declined most dramatically, down 6.3 percent in 2001 compared with 2000. On average, however, the luxury hotels have increased their prices just slightly.

    Consumers may benefit

    The downturn in the economy that has businesses trimming travel hasn't hit consumers in the same way. According to the Automobile Association of America, 34.2 million Americans are going to be traveling at some point this summer. And of those travelers, 41 percent will stay at hotels and motels.

    Tia Gordon, a spokeswoman for the American Hotel and Lodging Assn., said hoteliers have been expecting the downturn for months and responded with a number of incentives to try to capture as much of the leisure market as they can over the summer.

    "Some people are going to be staying with friends and family on their vacation, but a lot are going to stay at hotels and motels," Gordon said. "And we need to do what we can to get them." graphic


    Airline forecasts falling - - June 5, 2001

    Air travelers face better summer than do airlines - May 25, 2001

    Hotel, cruise line net off - - April 25, 2001


    American Hotel & Lodging Association

    American Automobile Association

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