I’m not sure if small-business travel is a growth trend, or if vendors are just starting to pay attention to it. But in another example of a market that is reaching down to smaller size businesses, we have the travel industry. Online travel booking sites, airlines and hotels are now specifically going after the small business owner, entrepreneur or employee in a smaller firm.
The small business traveler is defined as one who books directly — typically online — and is not restricted by the policies and rules of a larger corporate travel department. A recent New York Times article notes:
… [T]here is the rapidly growing business-travel market of small companies, independent contractors and others who can’t negotiate volume discounts. According to Orbitz, which recently introduced a companion Web site called Road Warrior to serve this market, online “unmanaged” business travel spending is about $28 billion a year.
That is a pretty big pool of potential revenue. So with the rapid growth of small-business and independent employee travel, booking sites, including those run by airlines and hotels, are scrambling to redesign their Web sites to appeal to that Internet-savvy market.
The Orbitz Road Warrior site caters specifically to the business traveler and from the wording makes it clear that it’s for those business travelers who book their own travel. For instance, the site offers business travel tips, along with alerts and travel information available to your cell phone or PDA.
Diane Clarkson, an analyst with Jupiter Research, notes that the “unmanaged travel” segment, which would include many small businesses, is over one-third of all business travelers:
This is a large segment. In our Frequent Business Travelers’ survey last year, we found that 39 percent of travelers who take 10 or more business trips per year do not have a managed travel provider. And this number doesn’t include those business travelers who take between 1 – 9 business trips per year.
A few weeks ago at the Small Business Summit in New York City, I was surprised to see one of the sponsors was American Airlines. I had never thought of an airline as being interested in the small business traveler. Au contraire. Nirav Bhakta of American Airlines was there to showcase American’s Corporate AAccess product, an online booking tool for business travelers including small businesses. Steve Rucinski, who was interviewing for the Small Business Trends Radio show, caught Nirav in a quiet corner at the Summit and did a 3-minute interview of him (MP3 file).
So what does all this attention on the small-business traveler mean? Let’s hope it translates into cost savings, easier and faster travel booking, and more convenient travel.
Here is one of the few examples where small businesses have an advantage over the large businesses if someone in management is paying attention to the details. The advantage is the capability to operate more efficiently with better controls over the travel budget.
The small business should have policies that promote using a single payment method, preferred providers, and self bookings where each traveler is completely aware of the costs associated with the travel. This also keeps the traveler asking if the trip is still worth the cost!
The traveler for a small business is usually more conscious of the impact the company expenses can have on the company’s profitability. For most large companies, the average traveler will have their own personal comfort and convenience come first. My experience is that a small business traveler will usually get the lowest air fares and hotel rooms as compared to the large business traveler.
Actually, I think this is a case of some folks waking up and smelling the coffee.
According to a JupiterResearch report published last November, travel is one of the top three or four major spending categories for the online SMB market. As a matter of fact, when I interviewed Jupiter research analyst Sonal Gandhi (who wrote the report), she told me she found that a bit surprising precisely because travel vendors weren’t exactly falling over themselves to pitch to that market.
Evidently, the travel vendors are finally starting to figure out that market is there. Better late than never, I guess.
I would agree with these points about small business travel. It is only in the last few years that I have been required to take business trips for the company I work for, and even then booking was a problem, although I must say I have never had a problem with the hotels, just the airlines.
Mary