As I’m returning from a business trip, I see a lot of families either going or coming from a vacation. You recognize the ear-to-ear smiles, beach-purchased straw hats, random beaded-braids in their hair and the proudly displayed ski lift passes. The business travelers wear a somber look with their business attire as they diligently set their sport coats and laptops in the bins at security.
But there is another, much larger difference that you can’t see. It’s on their credit card receipts. The seats on the airplane enjoyed by mom, dad and 2.4 kids were purchased months ago at a deep discount. The business traveler in the next row paid three or four or more times that amount for her seat. Even though the business traveling road warriors rack up many more miles, they usually pay the highest fares.
The rental car for mom, dad and the 2.4 kids? They get big discounts for weekend or full-week rentals. On my trip I was charged $130 per day for a Hyundai. Over the course of two days I traveled about 60 miles between the airport, two clients and the hotel. The total bill with $80 of taxes and fees was about $340. That’s more than $5.50 per mile. As I was booking my rental car, the company proudly flaunted weekend rates of $49 per day. Same car, but since they knew I was on business, I was charged more.
I tried to stay at a nice hotel where my wife and I have spent many weekends for $79 or $89 a night, but the weekday/business traveler rate was $200 a night online or the “lowest price” of $150 on the phone. I stayed across the street at a “budget hotel” for $89 a night. I’ve seen their weekend rates at $49. But I’m traveling on business, so no discount rates for me.
I know I’m not the first to complain about this business versus pleasure travel dichotomy, but I stared thinking about what would happen if my clients treated their customers the same? Or I if billed differently for my clients based on whether they were selling to consumers or other businesses? I’d be out of business.
Take our long-time client Applebee’s. Could you imagine walking into a restaurant and being asked “Will this be a business or personal lunch?” If you say business—or worse yet they assume you’re on a business lunch because it’s a weekday and you’re wearing a sport coat—you are handed a special menu with prices two to five times higher than the mom and kids who walked in behind you. I don’t think I’d stay at that restaurant.
After September 11, 2001 business travel was cut dramatically and the airlines and rental car companies were hit hard. And cutbacks in car rentals meant fewer cars purchased by Avis and the others. That put more pressure on Detroit’s already ailing car industry.
Should the travel industry make all of their profit on the backs of business travelers? Or what would the airlines look like if every seat cost the same regardless of whether you were wearing a business suit or Hawaiian shirt? Would that encourage more business people to travel? Some airlines like Allegiant and Southwest eliminate classes on airplanes, democratizing the skies. But from Sioux Falls, if I take Allegiant on my upcoming trip to LA I have to arrive 2 days early and stay 2 days longer. Allegiant is built for leisure travel. You don’t see many suits on their flights.
Should we have flat pricing for travel or let the business traveler subsidize your flight and hotel? On one hand I hate getting paying outrageous prices when I travel for work, but I love finding the discounts for the long weekend away.
What do you think?
– Jim Mathis