Meetings & Conventions: Fare Game March 1998
Ticket prices are up, but carriers are still cutting
creative group deals
BY DAVID GHITELMANT
hese are the best of times -- of recent
times, at least -- for airlines, and the worst of times for
business travelers. For the major carriers, load factors and
profits remain strong. For business travelers, fares are reaching
new heights even faster than the Dow Jones average in the current
For those flying to meetings, however, the situation isn't quite
so bleak. While they can expect to pay more than in the past for
airline tickets, attendees should virtually never pay full fare.
Discounted meeting rates are available to all but the smallest of
gatherings. In addition, planners can negotiate a variety of perks
for meeting-goers, including upgrades to business and first class
as well as passes to airline club lounges. Planners can also get
perks for their organizations, including free tickets for future
The airlines are so eager to fill as many seats as possible that
they even added an additional discount last year: 5 percent off the
already discounted meeting fare for attendees who purchase their
tickets 60 or more days before their flight.
Despite the carriers' unceasing efforts to create distinctive
images for themselves through expensive advertising campaigns, they
haven't been able to fool the average attendee suffering through a
flight in coach: These folks know that any one major carrier is
pretty much the same as its competition. Given a choice, they'll
book the cheapest flight. The airlines have responded by taking a
follow-the-leader approach to pricing. As a result, meeting
discounts tend to be nearly identical from one carrier to the
To the carriers, a meeting group consists of at least 10 people
originating from different places but traveling to a single
destination. Planners of these events can arrange for several types
of discounts. A 5 percent discount off the lowest published fare
typically requires 14-day advance purchase of a non-refundable
ticket, which can be changed for a $75 administrative fee. Also,
these fares generally require the attendee to stay over Saturday
night. The only two major destinations that do not require Saturday
stays are Hawaii and Las Vegas.
Attendees who find these restrictions too limiting can opt for
the airlines' second meeting fare: 10 percent off full-fare coach.
Both these 5 percent restricted and 10 percent unrestricted fares
leave attendees at the mercy of the carriers' yield management
pricing systems, under which fares vary continually based on
fluctuations in supply and demand. Generally, the airlines give
attendees a choice between the 5 percent restricted and 10 percent
unrestricted discount, and will tell attendees which is
Of course, there are exceptions. At TWA, for instance, discounts
vary by destination, ranging from 5 to 12 percent, according to
Scott Boyd, manager of domestic pricing for the carrier.
Groups that are able to plan ahead can take advantage of an
additional discount introduced last August, first by American
Airlines and matched within a week by most other major carriers.
Attendees who buy tickets at least 60 days in advance can take
another 5 percent off either their 5 or 10 percent discount. This
additional discount, however, is not available to all the groups
that qualify for meeting fares. At American, for example, an
organization must use the carrier for at least three meetings of 50
or more attendees to earn the bonus 5 percent.
The carriers have another product: zone fares. In some cases,
these are available for meetings of 10 or more; in other cases,
carriers require at least 20 attendees. In this system, the United
States is divided into several zones, and flights between one zone
and another (Zone One to Zone Six, for example) all cost the
same.Surfing for Airline
Web users like to brag
about the great airline deals they've found online. But these
bargains rarely meet the needs of meeting attendess.
"Internet fares are for perishable seats," says American
Airlines spokesperson Glenn Orchutt. "They are mostly only good on
weekends, and you don't know until Wednesday what's going to be
available on Saturday." * D.G
Zone fares have several advantages over the 5 and 10 percent
discounts. Since zone fares do not require a Saturday night stay,
they work well for mid-week meetings. Also, they can be great buys.
At press time, American's most expensive zone fare within the 48
contiguous United States was $501 -- a lot cheaper than a $2,000
full-fare transcontinental ticket.
Finally, zone fares permit meeting-goers to opt out of
lottery-like yield-management pricing; this means that planners and
attendees can actually prepare and stick to travel budgets. Some
carriers have set zone fares as far as two years out.
"That's the beauty of zone fares," says Carol Salcito, Norwalk,
Conn.-based president of Management Alternatives, a travel
management consultancy. "The travelers are guaranteed they will
never have to pay a higher fare. For budgeting, they are an
Fortunately, the airlines don't require planners to be able to
figure out whether 5 percent off a restricted ticket, 10 percent
off an unrestricted ticket or a flat zone fare is a better deal for
each and every attendee flying to a particular meeting. Instead,
the carriers will tell the customer which is the best deal at the
moment. (Remember, zone fares are available only if the planner
negotiates for them.)
Also, airline A will not tell planners that airline B has
cheaper seats on the same route. Nor will carrier A contact
planners to tell them it has lowered its fares, thereby entitling
attendees who have already purchased tickets to a refund. Carriers
will grant a refund if contacted by the planner or attendee who has
paid a higher price. Travel agents equipped with "seat robotic
systems" -- computer programs that seek out low fares and empty
seats 24 hours a day -- handle the onerous task of recovering those
Planners, however, shouldn't just meekly accept the offers of
the carriers any more than they would pay rack rates for hotel
rooms. The meeting departments of all the major airlines declare
they are in the business of negotiating. Most, however, are not
particularly eager to haggle over ticket price.
"There's room for some deviation," says Sheila Curtin, director
of travel services at McGettigan Partners, a Philadelphia-based
meeting management firm, "but that's quite rare."
Some planners say the bargains just aren't what they used to be.
"We find it difficult to get deeply discounted fares anymore from
any airline," says Al Jackson, CMP, director of travel management,
corporate events, for Novato, Calif.-based Fireman's Fund
The precise degree of unwillingness varies from airline to
airline. At one extreme, United Airlines will "absolutely not"
bargain over rates, declares JoAnne Bedrossian Ryan, national
manager for association sales. American is a bit less rigid,
stating that discounts are "relatively rare," according to
spokesperson Glenn Orchutt. TWA is at the opposite extreme: "Fares
are always negotiable, depending upon the size of the meeting and
the relationship with the airline," says Boyd.
Another concession the airlines are loath to make: waiving the
Saturday night stay requirement on restricted fares. "We don't go
near that," confesses American's Orchutt. US Airways is willing to
open the door a little further on this issue, according to
spokesperson David Castelveter. "We will entertain the request," he
says. "We look at every group individually."
What's left, if the carriers won't lower their prices or bend
their most restrictive rules? "The value-added items are highly
negotiable," says McGettigan's Curtin. "Club passes, upgrades,
productivity tickets." Consider the latter. The industry standard
is one free ticket voucher for each 40 tickets bought by attendees
(or by a company for its attendees). A planner who is bringing very
desirable business to a carrier can cut that to one voucher for
each 35 or 30 meeting tickets.
Virtually as soon as they have finished negotiating a good
arrangement with the airlines, planners have to start selling the
deal to their attendees -- convincing them to use the preferred
carrier, rather than the one that's most convenient for them or the
one with which they've got the most frequent flyer miles.
"Unless you produce, the airlines won't do business with you,"
says David Berenhaus, conventions coordinator for the Arlington,
Va.-based National Science Teachers Association. "You have to show
In many corporations, meeting-goers have little or no choice of
carriers. At Towson, Md.-based Black & Decker, travelers must
go through a preferred travel agency, says Peter Buchheit, director
of travel and meeting services. The few exceptions to the policy
are top corporate brass. "Officers of the company can do anything
they want," says Buchheit.
Association planners face a tougher sell. This is particularly
true of associations whose members are paying their own way and so
have an incentive to shop for the lowest fares possible, rather
than use a preferred carrier.
"It's hard for the associations," admits travel consultant
Salcito, "but can it be done? Yes. The association can set up a
central booking number for everyone to use. They can publicize the
fares in their brochures." In other words, associations can lead
meeting-goers to a fare deal, but they can't make them book it.
*Is This Seat
It's getting more and
more difficult for folks paying discounted meeting fares to get the
one thing that makes flying coach bearable -- an aisle seat. With
full flights, somebody has to squeeze in next to the window or --
ouch -- the despised middle. Often, those people paying the lower
fares feel the crunch.
"Everyone wants aisle seats," says Sheila Curtin,
director of travel services at McGettigan Corporate Planning
Services in Philadelphia. "Seats are a huge problem in the meeting
arena, with the airlines pre-blocking more and more for their
premium frequent flyers and full-fare passengers."
The airlines make no secret of the fact the travelers who
fly 25,000 miles per year with them or buy those high-priced
unrestricted tickets can sit wherever they want. United Airlines
reserves the front rows of the coach section for frequent flyers,
creating a sort of intermediate class between economy and business.
The other carriers simply set aside the most popular
Attendees flying to last-minute meetings may well end up
combating claustrophobia in the middle seat, but travelers who can
buy their tickets far enough in advance should be able to secure a
little room to stretch out. "The quicker you can provide us with
names and do ticketing," says US Airways spokesperson David
Castelveter, "the more choices your attendees will have." *
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