Madison, WI: Business Travel Flying High

Business travel is on the rise in the Madison area, enough that some travel agents say it is back to 2008 levels, before recession-related cutbacks.

But with higher ticket prices and extra airline fees, local companies are keeping a tight watch on the way they spend their travel dollars.

"We've gotten back to 2008 levels and better," said Scott Mast, chief operating officer and owner of Burkhalter Travel, in Madison. Interest in travel came "roaring" back last year, for both business and leisure travel, Mast said.

If that continues, it will buck the U.S. trend.

"Economic uncertainty in Europe will dramatically slow the growth of business travel in the United States through the end of the year," said the Global Business Travel Association (GBTA), in a report released last week at its annual convention in Boston.

The GBTA's study forecast slow growth in U.S. business travel through 2013, with continuing concerns over lagging job creation and drops in consumer confidence.

The big bursts in business travel are coming from Brazil, Russia, India and China, each with growth rates of more than 15 percent in 2011, the report said. It predicted China will surpass the U.S. in total spending on business travel by 2014, a year earlier than previously expected.

In the Madison area, though, signs are optimistic.

"It is on the rise if you compare it to two or three years ago," said Mary Miller, president and CEO of Middleton Travel. International travel, in particular, is increasing and makes up more than 50 percent of the agency's business from corporate clients, Miller said.

Business travel services are 20 percent higher than last year's for AAA, said Denise Dettman, director of business travel for The Auto Club Group, which serves Wisconsin and seven other Midwest states.

She said companies are sending their employees out at levels comparable to 2008.

Charter flights on the rise

If anything illustrates the rise in business travel, it could be the growth in charter aircraft.

Wisconsin Aviation's charter flights have "gone up significantly" over the past 18 months, said Grant Goetsch, vice president of flight operations in Madison. Charter customers are generally businesses that send two or more people to a location within a five-state area around Wisconsin, he said.

"We have had a lot of inquiries, and of those, several new customers and a lot of repeat customers are going on business travel," Goetsch said. He said business for Wisconsin Aviation is up about 15 percent over last year.

More people also are flying out of the Dane County Regional Airport, with outbound passengers in June up 6.6 percent from a year ago.

"That's a drastic change. That's great," airport spokesman Brent McHenry said. The airport does not track whether passengers are flying for business or leisure and does not tally flight data based on individual days of the week.

But McHenry said parking lots, restaurants, gift shops and security lines are busier on Mondays, Thursdays and Fridays - typically popular days for business travelers.

Balancing budgets

There are some changes, though, in the way companies engage in business travel.

"Airline tickets, in general, are more expensive, so that has an impact. Instead of sending two or three persons to a trade show, (companies) might send one person to a trade show," said Miller, of Middleton Travel.

According to Carlson Wagonlit Travel, ticket prices will be even higher next year. Flights out of Minneapolis-St. Paul's airport likely will cost 5.4 percent to 7.9 percent more in 2013, substantially higher than the 2.8 percent fare hike projected nationwide, said a report Carlson Wagonlit released Monday.

American Family Insurance Group has kept a close eye on its business flights, spokesman Ken Muth said. From April through June, the Madison-based insurer used air travel 20 percent less than a year ago, taking 1,830 flights instead of 2,290 flights during the 2011 second quarter.

"But with an increase in airfares, the overall cost to us has remained the same," he said.

The number of emergency situations did not necessarily have a bearing on American Family's air travel because many of the catastrophe response teams drive to the disaster locations, Muth said. "Because they never know how long they're going to be there and they need a car, anyway," he said.

Muth said American Family also has been using online options more often.

Video conferencing has seen "tremendous growth" nationwide in the last few years, AAA's Dettman said, but as the economy has improved, "most companies have come to the conclusion that video conferencing can't replace a face-to-face meeting.

"When trying to develop a new relationship, improve operations or cement a current business relationship, a face-to-face meeting is necessary."

Miller said some companies also are abandoning their do-it-yourself travel plans over the Internet and are starting to return to agencies for help with their employees' travel arrangements.

"There had been so many frustrating experiences that these travelers had, when they got stranded and nobody was there to help them," she said. "In the past two weeks, I've had four companies come back on board with me. ... That's been a nice trend."

Comfort vs. frugality

Airlines are taking more steps to woo business travelers, who are less likely to bargain-hunt than leisure travelers. United Airlines is among those offering some lie-flat seats and American says it will begin offering them to business-class and first-class travelers on some cross-country flights in 2013.

Meanwhile, JetBlue Airways and Virgin America will start offering perks to frequent fliers later this year that will include early boarding and upgrades to more cushy seats.

Middleton Travel's Miller said international travelers, in particular, "will see what they can get as far as more comfortable seats. But they aren't going to buy the really expensive tickets, like business class. We don't necessarily sell a lot of $10,000 and $20,000 tickets," she said.

Travelers, at least from the Madison area, will readily use their accumulated points to upgrade their seats or will pay a little extra for economy-plus tickets on overseas flights, Miller said. But they are less likely to upgrade on domestic flights, if it means paying extra.

"They are still going ... but I think they're just being a little more cautious how they spend their dollars," Miller said.

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