Price and Service Are Keys to Winning Travel Customers
Even with health and political concerns, the business travel industry is expected to see slight growth in the near future, and according to Accenture those that compete best on price and service are poised to reap the most benefits.
"In a slow economy and an extremely competitive market, everyone is vying for the same customers," Julian Sparkes, a partner in Accenture's transportation and travel services industry group, said in a statement. "Hotels and air carriers must not only keep their prices competitive, but differentiate themselves by offering superb customer service. The survey clearly indicates that the travel industry must better identify high value customers to build personalized relationships.
"The choices for business travel are blurring as price, brand and loyalty begin to intersect. Airlines and hotels must make sure their loyalty programs are fully integrated in the way they do business on a daily basis. They should rethink their business models, because the future leaders of the travel industry will ultimately be those who are investing today to meet future customer needs."
The survey indicates that price remains a major concern for business travelers. More than half (60 percent) the respondents said they have used low cost carriers for business trips in the past six months. Of that group the vast majority (94 percent) said that their use of these carriers will either increase (27 percent) or stay the same (67 percent) in the next six months. And almost all respondents (93 percent) reported that they will use midrange hotels (82 percent) or budget hotels (11 percent) for their business travel in the next six months, while only 5 percent said they expect to stay at luxury chain or boutique hotels.
Despite the emphasis on price, survey results indicate that brand and reputation, as well as a traveler's experience, are significant factors when it comes to making business travel arrangements. Almost half (49 percent) of respondents cited brand and reputation of the hotel as important; 43 percent said that past negative/positive experience influences their hotel decisions; and four out of five (80 percent) respondents said they consider hotel reward or frequent flyer programs when making their travel decisions.
The survey, fielded in May 2003, entailed querying more than 1,600 business travelers at U.S.-based companies.