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Ideas and Issues the Travel Business 
Expected to Focus on in 2002
The Philadelphia Inquirer Business Travel Column
By Tom Belden, The Philadelphia Inquirer
Knight Ridder/Tribune Business News 

Dec. 16--The events of Sept. 11 not only heightened awareness of travel security but prompted lots of thinking about the future of how we get where we need to go, how much we should pay for it, what role government has in helping us get there, and even if we need to make some trips. 

Here are some of the ideas and issues that people in the travel business are expected to focus on in 2002. 

Can we afford this trip? For months before Sept. 11, business travel had been slowing down, but not just because the economy had slipped into a recession. 

One apparent reason was that the technology of video conferencing, using the Internet or dedicated facilities where businesspeople gather, has improved substantially in the last few years. That has given organizations a practical and less costly alternative to flying people in from scattered places for a meeting. 

But that was not the most important factor in the slowdown. 

Many airline industry experts, including Wall Street analysts, travel agents, consultants and even some people working for the carriers, say the way the largest U.S. airlines set fares -- charging their best customers 10 times as much as they do those who fly once a year -- is fundamentally flawed. These experts say that, starting in late 2000, so many business travelers got fed up with paying almost $3,000 to make a last-minute coast-to-coast trip, they simply quit flying. To those folks, getting there fast no matter what the cost wasn't worth it anymore. 

Companies large enough to negotiate discount fares, based on having a large volume of travel, got especially frustrated. They watched the airlines repeatedly raise the base, or full-coach, fares on which their discount was calculated, thereby making the discounted price meaningless. 

At the same time, the airlines' cheap Internet-only fares began to tempt business travelers to skip using the airlines their employers had negotiated discounts with, and book their own flights online. That eroded even further many companies' power for negotiating discounts. 

In the meantime, the biggest airlines kept leisure-travel fares so low that most carriers lose money on them. 

The only airlines that don't have a big pricing problem are those with such low operating costs that they can make money charging low fares, or those with service so good that travelers are willing to pay a premium to use them. 

Can I drive there? Especially since Sept. 11, many businesspeople have discovered that driving to destinations within 300 or 400 miles makes sense. That's especially true if the airfare is high, service has been curtailed, and there's no public transportation available where a traveler needs to go. 

For a traveler contemplating a trip, that means making sure the car is in good working order and that driving directions to the destination are clear. If this trend continues, and gasoline remains cheap, look for some people to trade in their cars on roomier, more luxurious models, and for more motorists to realize just how bad the highway congestion can be in cities other than their own. 

How about the train? This is a subject -- particularly the future of Amtrak -- you will be hearing a lot about in 2002. 

Most U.S. business travelers don't use rail service now because there isn't much of it. Only in the Northeast, on some West Coast routes, and in a few other places is service fast or frequent enough to be useful. On Sept. 11 and just afterward, rail travel increased, but now it has fallen back to previous levels. 

The debate, sparked by a report issued in November by the congressionally appointed Amtrak Reform Council, will be over whether Amtrak should continue receiving taxpayer subsidy to operate its trains, or should the system as we know it be restructured or dismantled. In place of Amtrak, the country might end up with some premium-fare service run by private companies and some short-distance trains that still get taxpayer help, but with the government still paying for capital improvements. 

What's most unlikely is that the country will wind up with no intercity passenger trains -- although it may take longer than just the next year to decide that. 

Send your comment or question about business travel to Tom Belden, The Inquirer, P.O. Box 8263, Philadelphia 19101, or e-mail at [email protected]

-----To see more of The Philadelphia Inquirer, or to subscribe to the newspaper, go to http://www.philly.com 

(c) 2001, The Philadelphia Inquirer. Distributed by Knight Ridder/Tribune Business News. 


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