July 01, 2002
Meetings & Conventions: Newsline

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Online Fares Undermine ContractsHenry Harteveldt Henry Harteveldt A growing number of business travelers are bypassing designated travel agencies to book cheaper flights online. By doing so, however, experts say they could jeopardize company air deals and ultimately lose money for their firms.

In a recent poll by the Business Travel Coalition, an advocacy group based in Radnor, Pa., 69 percent of 403 frequent travelers said they could find better fares online than through corporate travel agents. Even agencies themselves, at clients’ requests, are using the Web to book tickets. “Travel agencies complain about Web fares, but 50 percent of agents have booked travel using Web sites,” said Henry Harteveldt, a senior analyst for Forrester, a Cambridge, Mass.-based research firm.

But it is often a false perception that business travelers are getting better deals online, said Jared Blank, travel analyst for the New York City-based research firm Jupiter Media Matrix. “Travelers don’t necessarily see the rebates or volume discounts received by a corporation,” he said. “By going out of the policy, they aren’t really saving the company money.”

At American Express, corporate clients discourage travelers from comparing agency fares to online offerings. Yet, with Web discounts as steep as 60 percent, Amex plans to add a Web search capability to its online booking system by August to give travelers who are so inclined a tool to search for deals. In addition, GDS suppliers like Sabre and Galileo plan to roll out systems to give client agencies access to Internet-only fares. But some doubt the problem of agency vs. Web fares will be resolved so simply.

Among the hurdles: Agencies are denied access to Web-only fares like those on Orbitz. Also hurting agency business are transaction fees of up to $50 per ticket, imposed to replace lost revenue due to airline commission cuts.

• B.O.

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