The return of the business traveler
‘It’s time to get back to business,’ southeastern Wisconsin business owners say
By Andrew Weiland, SBT Reporter
Sparked by renewed optimism in the economy, business travel is expected to increase in 2004 for the first time since the late 1990s. Runzheimer International, a Racine County-based research firm, is predicting a 6.5% increase in corporate travel budgets in 2004 for U.S. firms. A Runzheimer study predicts corporate spending on air travel will increase by about 10% in 2004.
"We really have seen many different industries that were suffering are starting to make some money again," said Phyllis Schumann, senior editor of travel for Runzheimer International. "Companies are going back to spending money."
The Travel Industry Association of America is predicting a 4.2% increase in business-related trips for 2004 and a 3.5% increase in 2005.
"It’s good news," said Cathy Keefe, spokeswoman for the Travel Industry Association of America. "Business travel has been steadily declining since 1998."
The Sept. 11, 2001, terrorist attacks dealt a severe blow to business travel, Keefe said.
"That just sort of pushed us off a cliff in terms of business travel, and we just had trouble recovering because of the economy," she said.
The improving economy is the biggest reason for the expected increase in business travel in 2004, industry observers say. Also, more than two years after the Sept. 11 terrorist attacks, business leaders are moving past previous concerns about air travel security.
"It’s definitely the economy, No. 1, and No. 2, it is pent up demand (for business travel)," said Doug Neilson, president and chief executive officer of the Greater Milwaukee Convention and Visitors Bureau. Businesses "have been kind of holding off because of the economy since 2000. They know it’s time to get back to business."
"I think (business travel) is definitely going to be up if the economy gets cooking like it looks like it’s going to," said Peter Beitzel, vice president of the Metropolitan Milwaukee Association of Commerce.
Many Milwaukee-area business executives say their companies will be traveling more next year.
"I would say (our business travel) is going to be up," said Peter Gottsacker, president of St. Francis-based Wixon Fontarome Inc. "Within our industry, companies are consolidating, and we need to be present at those headquarters, which are not necessarily in Wisconsin. We have to go to other states to meet head-to-head."
Jim Cyganiak, president of Milwaukee-based Quality Air Forwarding said his company has grown and has received business opportunities from companies in southeastern Wisconsin with additional operations in states.
"We’re traveling on a constant basis to build on the relationships with our customers and take it to the next level," Cyganiak said. "I would say we would be traveling more (in 2004)."
"I do intend to be traveling a bit more in the first quarter than I have for this past year," said Wayne Staats, CEO of Esupport Solutions LLC of Milwaukee. "Not an over-abundance more. It seems there are a number of things I need to go to that are scattered around the country."
Timothy Tucker, president of New Berlin-based Air Engineering, said he started making frequent business trips this year and is planning even more next year.
Tucker said he learned the value of business travel after he and his employees were concerned about his company’s relationship with one of its customers. They flew to meet face-to-face with that customer and discovered they were about to lose the account because of a misunderstanding.
They cleared up the misunderstanding and kept the account.
"We found out it pays to go meet your customer," Tucker said. "We want to know our customer, really know him, know what he looks like, know what his office is like, know what his problems are. That’s our whole mission, to make the customer really happy to do business with us."
Tucker is a pilot and frequently rents a plane he flies for business trips, especially to smaller towns in more remote areas. Tucker prefers flying himself instead of flying commercially and plans to purchase an airplane for his business, but not for at least a year.
"When I went commercial the other day (to Florida), it was absolutely miserable," he said. "We’re clearly moving toward buying our own (plane). We have to build up to that."
Some local travel agencies also are noticing an increase in corporate travel.
"It has been a very strong year for us in 2003, and we do see it continuing in 2004 as well," said Craig Adelman, president and CEO of Adelman Travel.
Adelman Travel is the largest travel agency in Wisconsin, and 90% of its business volume is from corporate accounts, Adelman said. The Glendale-based company received about $20 million in new corporate business in the last six months, likely a record for the company, he said.
The travel agency has added about 10 travel agents in the last three months to handle the increased business, Adelman said.
Erika Franzen, international travel consultant for Omega Cruise and Tours, said her firm also is receiving more business from corporate clients.
"A couple of our accounts have gone up because one of them started a new company in Asia. I know they’re traveling more because of this. More companies are traveling overseas because they have customers overseas," Franzen said.
During the economic downturn of the last few years, many businesses learned to live with fewer and less expensive business trips. Some businesses have used Web conferencing or teleconferencing for meetings, instead of traveling.
However, business executives planning to travel more in 2004 say meeting in person with customers is still important and worthwhile.
"There is significant value in face-to-face meetings," Cyganiak said. "I think it develops the relationship to a further level. You certainly can’t do that in a teleconference, through e-mail or over the phone."
Many of the businesses that continued to travel in recent years reduced their costs by taking advantage of discount air fares.
"They’re doing what the leisure travelers have done for years," Keefe said.
The return of business travel is good news for Oak Creek-based Midwest Airlines, which narrowly avoided filing for Chapter 11 bankruptcy protection earlier this year. A return by business travelers is crucial to the long-term success of the company.
The airline is cautiously optimistic signs of an economic recovery will translate into more business travelers next year, said Randy Smith, vice president of sales and distribution for Midwest Airlines.
"We’re optimistic and hopeful," Smith said. "But it hasn’t materialized yet."
"A healthy economy can change a lot of things," Keefe said.
Dec. 26, 2003 Small Business Times, Milwaukee
