Travel Conditions Likely to Deteriorate in 2007

January 3, 2007

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January 3, 2007

For business travelers, 2007 could be difficult: They'll likely find airplanes packed even tighter than last year, hotel rooms priced higher and travel managers demanding cutbacks in travel expenses. Renee Montagne talks to James Gilden of The Internet Traveler.

RENEE MONTAGNE, host:

On Wednesdays we talk about the workplace. For many, the workplace is frequently an airport, a rental car, a hotel room, or a middle seat in coach. 2006 was an expensive and often cramped year for those who traveled for work. And 2007 might be worse.

That's according to James Gilden who writes about road warriors in a regular column for the Los Angeles Times. He also runs the Web site called TheInternetTraveler.com. Good morning. Thanks for joining us in our studio.

Mr. JAMES GILDEN (Columnist, Los Angeles Times; TheInternetTraveler.com): Good morning, Renee. Thanks.

MONTAGNE: What does it look like for business travelers in 2007 who are frequent flyers - who travel a lot, and for business?

Mr. GILDEN: Well, I tell you, planes are flying full now and it's just going to get worse in 2007. And it's going to be more expensive. American Express is predicting it's going to be as much as seven percent more expensive. You're also looking at airlines now, in the merger dance - meaning there's going to be even fewer seats.

MONTAGNE: Fewer seats even for business travelers.

Mr. GILDEN: Oh, especially for business travelers. Because business travelers are often booking at the last minute. With planes as booked as they are, as full as they are, especially for business travelers. Which is the crazy thing, business travelers are paying much higher fares, but they're getting on these planes and they can only book a middle seat sometimes, because all the other seats are taken. So you're paying more money to sit in the middle.

MONTAGNE: There's been some talk about allowing cell phone use on airplanes, some time. Any chance that'll happen in 2007, which will mean for me I'm just going to stop flying.

Mr. GILDEN: Well, business travelers are sort of - have mixed views about cell phones. Sixty-one percent of them in a recent survey said that they're opposed to allowing cell phones in flight. Yet in another survey, more than half said that they would use them if they were allowed.

The answer to the question is yes, we are going to see cell phones on planes in 2007. The good thing is, not in this country, at least not yet. Ryanair, which his a low-cost carrier in Europe, is introducing that in mid-2007. It's going to be about two and a half bucks - per minute. That's going to be a self-limiter.

So when and if it does come to this country, there will be some limits on it.

MONTAGNE: Let's turn to hotel rooms, which are, for many people who travel on business, home away from home.

Mr. GILDEN: Hotel rates are going up across the board - some markets more than others. New York City, which already has some of the highest hotel rates in the country, they're projecting, American Express is projecting that the rates will be up 18 percent. In Asia, they're looking at a 25 percent increase in some parts of Asia, especially in India.

London, they're already seeing high occupancy rates. We're looking at 80 to 90 percent occupancy. And when you're talking about foreign travel, you're also talking about exchange rates. The exchange rate, with the dollar to the pound right now, is absurd. It's almost two dollars to the pound. It's the worst I've seen in a very long time. It's also up against the Euro - it's $1.30. So traveling to Europe is going to be more expensive just as a result of those exchange rates.

MONTAGNE: Looking at the companies themselves, are these higher costs forcing companies to cut or be more innovative when it comes to the travel that their workers, their employees, their managers take?

Mr. GILDEN: Those corporate travelers are going to see a tightening of policy. Seventy-five percent of travel managers recently said that they were cutting back on their luxury hotels. Not that's problematic on all sorts of levels. I mean a company's most valuable employees are its business travelers many times.

It's executives, it's salespeople. You've got these folks out there, they're used to traveling a certain way and they're going to bolt.

MONTAGNE: Yeah, it's not that fun.

Mr. GILDEN: No, it's not fun. It's certainly not fun at all. And there's going to be a rebellion. I mean there's going to be - business travelers are going to say, stop, no. You're not going to - I want to stay at a nice hotel.

MONTAGNE: Thanks very much for joining us.

Mr. GILDEN: It's my pleasure. Thanks, Renee.

MONTAGNE: James Gilden writes for the Los Angeles Times and TheInternetTraveler.com.

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