Judging from the news, airlines stand out these days for what they don't offer: hot meals in coach, generous leg room, fees that make sense. The good news, however, is this: Carriers are still offering meeting fares, especially for larger groups, although the offers have changed along with everything else. Groups as small as 10 to 20 passengers can qualify for a deal, and the process of snagging a discount can take as little as 10 minutes.
Today, fewer airlines are left fighting for a piece of the meetings market, but the market itself is thriving. Nearly $20 billion annually is spent on air travel in connection with meetings in the U.S. alone, according to studies conducted by PricewaterhouseCoopers for the Convention Industry Council. That's a significant share of the roughly $170 billion in revenues the domestic airline industry reported last year. "We see it as an important sector for us, which is why we are committed to being in this space," says Barbara Laken, director of specialty sales for United Airlines.
United, of course, is a very different company than it was even three years ago, thanks to its mega-merger with Continental. As it aligned its programs with its partner's, United revamped its convention program, offering not only reduced fares for groups of at least 20 traveling to an event from two or more cities, but also bonus credits for organizers that can be redeemed for future travel. (For a broader list of program details by carrier, see sidebar, "Cheat Sheet: Airline Meeting Fares at a Glance".)
In fact, most U.S. airlines' meeting fare programs have undergone changes in the past few years, as a quartet of mega-carriers emerge from the merger wave. Sharing the bulk of the market with United are Delta Air Lines, which absorbed Northwest in 2010; American, now cementing its union with US Airways; and Southwest, which bought AirTran (although it still retains its brand as a budget maverick). Mergers inevitably mean mashing together companies with differing policies on everything from drink prices to labor rules. That includes blending group sales departments, which might have conflicting rules on handling meetings.
American at press time was going through the final stages of its merger with US Airways, positioning it to be the world's largest carrier. But one of the many decisions American made in the process was to scale back its meeting fare program, which had offered percentage-based discounts for travelers from multiple locations. This move reportedly was to bring American in line with US Airways' policies. American does, however, continue to offer group travel discounts for those traveling together on the same flight, and also offers a refundable zone-fare program that can be used for conventions. American says its program is still evolving. According to a spokesperson, the carrier views meetings business as "very important" and "will continue to look at how we offer fares to access the full network."
American's move has stoked concerns that as the industry consolidates, carriers might be less willing to negotiate favorable rates for meeting delegates. "It's obviously a sellers' market, and demand is really strong," said an executive at a major airline, who requested anonymity. "That's putting pressure on the pricing team, who might be asking why they need to discount at all" for what is, in reality, a business trip.
As anyone who's been on a domestic flight has noticed, planes are fuller than ever, with an average load factor, or percentage of seats occupied, of well over 80 percent. Airlines are making a profit, and while airfares aren't rising as fast as some observers had feared, carriers are tightening rules on other programs like awards plans and youth and senior fares.
M&C spoke to airline sales officials and meeting planners about this new landscape and what it means for the meetings business. The upshot: The news isn't all bad.
Is bigger better?
When it comes to moving large groups of people, there are obvious advantages to size. More than 80 percent of the total air traffic in the United States is handled by the four biggest airlines. Midsize and niche lines -- like Alaska, JetBlue and Virgin America -- are doing well financially, but their share of the business pales in comparison. Still, these smaller players do work with meeting planners, especially for events in their hub cities. Alaska, for example, will arrange a discount code for groups of 20 or more. However, a source at JetBlue conceded that its meeting program doesn't generate much business.
Size also is a distinct advantage for the trio of global airline alliances -- Oneworld, Skyteam and Star Alliance -- which have gone through their own growth spurts in recent years and now represent about three-quarters of the world's airline business. Each of these loose-knit fraternities includes dozens of carriers and can rightfully claim to cover the globe. (For a breakdown of alliances and member carriers, see "Allied Forces".) And each is tapping convention business, rolling out new or revamped meetings programs over the past few years.
"We can really offer a one-stop shopping service for a meeting of any size," says Olav Glorvigen, director of sales and market development for Star Alliance, which has 28 member carriers serving 192 countries. Its sheer girth, significantly larger than the others, is a major selling point in its pitches. "You could have a conference in Vienna and get someone there even from the smallest village in Indonesia, and it could all be handled by the same airline network," Glorvigen notes.
Each alliance is anchored by a couple of major players. At Star Alliance, United, Lufthansa and Singapore are founding members; Skyteam is helmed by Delta and Air France-KLM. Oneworld's lead players are American and British Airways-Iberia, and while it's late to the meetings game -- having just launched its events program two years ago -- Oneworld is catching up fast, according to director of sales José Maria Alvarado. Since introducing the program in May 2013, the alliance has signed up more than 100 large international events that attracted more than 200,000 attendees. One recent example was the 2015 Rotary International Convention, in Sao Paulo, Brazil, attended by roughly 14,000 delegates from some 150 countries.
To avoid competing with the meetings programs of their own member airlines, alliances typically require that any meeting they handle must have a significant international component, with delegates coming from at least two countries outside the host nation. Ed Hollo, Amsterdam-based sales manager for Skyteam, says some meetings might seem a good fit for one of its airline members, rather than being handled by the alliance, based on where attendees are coming from. One recent case involved a large conference in Atlanta that went to Skyteam for its air-travel arrangements. "Delta, of course, has its hub there and has a very good meeting program," notes Hollo. "But what it came down to was scope, and even Delta wasn't in a position to meet all the needs of this event," which drew some 40,000 attendees from 20 countries.
It's one thing to have a robust program; it's another to make sure travelers use it. In fact, one source of frustration for both airlines and meetings organizers is the number of travelers who "go rogue" and book their flights outside the official channels.
"That's the nature of this business," says Alvarado. "If the booking is left to the individual traveler, they may have other alternatives, or their corporate travel agency may have other arrangements," including negotiated fares.
Lack of program compliance is a hot topic among airline meetings teams these days, says Jimmy Romo, Delta's general manager for specialty sales. "That's a question we continue to try to solve," he notes. "Most airlines believe that their programs are underutilized, because the carriers track a fraction of the total activity reported by convention and visitor bureaus. We must continue to work on building awareness of our meeting programs," adds Romo.
Following is a listing of the airline consortiums' member carriers.
ONEWORLD - Air Berlin, American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, LAN, TAM, Malaysia Airlines, Qantas, Qatar Airways, Royal Jordanian, S7, and SriLankan Airlines
STAR ALLIANCE - Adria Airways, Aegean Airlines, Air Canada, Air China, Air India, Air New Zealand, ANA, Asiana Airlines, Austrian, Avianca, Brussels Airlines, Copa Airlines, Croatia Airlines, Egyptair, Ethiopian Airlines, EVA Air, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Shenzhen Airlines, Singapore Airlines, South African Airways, Swiss, TAP, Thai, Turkish Airlines, and United Airlines
SKYTEAM - Aeroflot, Aerolineas Argentinas, Aeromexico, Air Europa, Air France, Alitalia, China Airlines, China Eastern, China Southern, Czech Airlines, Delta Air Lines, Garuda Indonesia, Kenya Airways, KLM, Korean Air, Middle Eastern Airlines, Saudia, Tarom, Vietnam Airlines, and Xiamen Airlines
How low will they go?
With the average roundtrip airline ticket in the U.S. hovering around $400, according to the Department of Transportation, published fares can't go much higher without risking a backlash from price-sensitive consumers. Airlines know this; that's why they have used strategies like ancillary fees to bring in additional revenue without appearing to hike prices.
With the vast array of search engines and "name your own price" options out there, the airfare market resembles a Turkish bazaar. Attendees might assume they can book their own tickets at prices equal to or even better than the "official" deals offered via the convention organizer. That's a perception airline meetings departments are fighting to combat, in part, by extending discounts through the entire universe of fare categories, down to the bargain-basement level.
"When we say you get up to 15 percent off, we do indeed mean that," says Skyteam's Ed Hollo. While the discount varies, the lowest promotional fares would be knocked down by around 2 percent across the board. When it comes to full fares and premium-class travel, "that's where you see the really significant savings," he adds.
Other airlines are taking a similar approach. "We offer a discount on any published fare, from economy up through business class," says United's Laken. "That is the beauty of it: You just select the type of fare you want, and the website immediately gives you the price." The rules, however, are the same as they would be if attendees were booking their own travel; the cheapest fares are nonrefundable and carry a hefty change fee.
Those restrictions might be too onerous for many delegates and the companies paying their way. For more flexibility when it comes to cancellation and rebooking, most of the major airlines also offer the option of zone fares, allowing refunds and name changes. The trade-off: Zone fares are higher than the nonrefundable fares consumers now take for granted.
One fairly new player is giving meeting planners another alternative: Southwest Airlines, which despite its status as the largest U.S. carrier by passengers flown, still doesn't assign seats or serve meals. Introduced three years ago, Southwest's meetings program offers discounts for 150 or more travelers flying to the same destination, with the level of the fare reduction based on the total number of participants.
For the Association for Professionals in Infection Control and Epidemiology, which drew 5,000 attendees to its convention in Nashville last June, Southwest gave 15 percent off standard fares and 5 percent off its lowest "Wanna Get Away" leisure fares. While that's in line with other airline programs, Southwest offers big perks for all flyers: No change or cancellation fees, and up to two checked bags free. Plus, meeting-goers get 25 percent extra reward miles.
The capacity challenge
From the planner's side, fares aren't necessarily the issue, it's getting the confirmed seats on the desired flights. "Airfares are pretty level now," says Marty Hoski, global manager, travel and meetings operations, for the Educational Testing Service in Princeton, N.J. "When you look at what it costs now, you probably paid more money to fly to Florida 25 years ago than you do today."
Hoski handles arrangements for roughly 600 meetings a year, ranging in size from fewer than 50 to several hundred participants, and finds that the airline side can be a challenge. In certain markets, "the issue is the capacity," he says, as merged airlines often shift their priorities and de-emphasize certain hubs in favor of others in their combined-route systems. Delta effectively dismantled its hub operation in Memphis, partly due to its proximity to Atlanta, the busiest airport in the world. United scaled back at Cleveland, a former Continental redoubt. Other airlines have come in, but not enough to fill the void. "With the three majors divvying up the country, there is not going to be much choice in some markets," warns Hoski.
Tech makes it easier
"In the old days, you would call into a call center and get a paper contract; it could take a while," recalls United's Laken. 'Today, we're proud of our back-end productivity and how fast we can respond to RFPs."
While the airline industry was one of the earliest adopters of automation, over the past few years the benefits of technology have been fully realized for meeting planners, and recent upgrades have further streamlined the process.
"One significant upgrade we've made is the contracting process itself," says Hollo. "Ours takes about 10 minutes at most; once the proposal is submitted [by the meeting organizer] to our website and the robots are done looking at it, we can approve the contract in about 30 seconds. We will get the approval pretty much immediately." He notes, however, that there's a 48-hour "incubation period" before carriers can actually put the fares on sale.
But with major events, automation only goes so far; most organizers will want a connection with an actual human being. Skyteam's policy, Hollo says, is to send a personal message within the first two days from the team member "who will be with them for the life of the contract." It can be a long life span: Skyteam accepts contracts up to five years in advance. (The cutoff for making arrangements is generally three months in advance.)
One advantage of the more sophisticated technology is that it lets organizers track activity. "They have 24/7 access to the report. They can see how many people have booked, where they have booked, when they are arriving," says Hollo. "It also allows them to track how much [fare] revenue is being generated by the event."
And more automated systems can help airlines and alliances fine-tune the rewards they give meeting organizers. Skyteam gives a free roundtrip ticket for every 50 delegates booked. Star Alliance awards credits good for future travel on the network, and United rewards planners with a point-based system that gives free tickets or upgrades, depending on the user's preference.
But there's more at stake than just getting the best deal for your meeting: It's making sure that the delegates -- and their belongings -- get there in the first place. It used to be that everyone had a story about delivering a speech in a T-shirt and shorts because their luggage was lost. But over the past seven years, airlines have lost 61.3 percent fewer bags as tracking technology improved, according to industry research firm SITA.
And despite concerns about dwindling competition, a positive outcome of consolidation is a more reliable system. Flights are more punctual, and fewer people are missing connections, notes Jimmy Romo of the post-merger Delta. "We've invested billions of dollars in improving customer service on the ground and in the air," he says, with new planes and advanced technology to cut down on travel woes.
CHEAT SHEET: Airline Meeting Fares at a Glance
LARGE U.S. CARRIERS
The deal: Refundable zone fares for groups of 10 or more people traveling from different locations to the same destination
Booking window: 30 to 330 days out; $25 booking fee for phone reservations
Contact: aa.com/groups; 800-221-2255
The deal: Discounted fares on Delta and Delta code-shares, for 10 or more passengers going to the same destination and originating from at least two cities; zone fares available through designated travel agencies
Bonus: One travel certificate in T class for every 40 passengers booked
Booking window: 3 days to 1 year out
Contact: delta.com/meetings; 800-328-2216
The deal: Discounts off all fare categories for groups of least 150 people traveling to the same city; rates vary according to size of group and availability
Bonus: None currently; under consideration for 2016
Rules: Book through Southwest website or incur a $25 booking fee.
Booking window: At least 60 days from meeting start date
Contact: Submit proposals via SWABIZ.com; a rep will follow up within 10 days
The deal: Discounts off published fares for groups of 20 or more, from at least two originating destinations, for attendees and travel companions
Bonus: Bookings earn productivity credits that can be redeemed for a range of rewards, such as drink coupons, upgrades and tickets. Organizers receive customized flyers and other promotional support.
Booking window: Up to one year in advance
Rules: $25 booking fee on tickets booked through United call centers
Contact: united.com/meetings; 800-426-1122
GLOBAL AIRLINE ALLIANCES
The deal: For groups of at least 100 attendees internationally, fare discounts on Oneworld network of up to 25 percent on published fares for delegates and one travel companion
Bonus: Productivity credit accounts for meeting planners; no booking fees; promotional support; management reports and activity tracking
Booking window: Three months to five years prior to event
Contact: oneworld.com/events; expect four-day turnaround on requests
The deal: Discounts of 2% to 15% on network carriers for minimum of 15 attendees and companions originating from at least two different countries outside host nation
Bonus: One free roundtrip ticket for every 50 tickets booked; promotional support
Booking window: Two months to five years in advance
Contact: skyteam.com; [email protected]
The deal: Fare discounts for delegates and one companion, via two distinct programs: Meetings Plus, for groups of at least 50 participants from a minimum of three countries outside meeting destination; and Conventions Plus, for a minimum of 500 international delegates from three or more countries and two continents
Bonus: Credits redeemable for travel on alliance network carriers
Booking window: 60-day minimum for Meetings Plus; six months to three years from event date for Conventions Plus; tickets are issued through travel agency designated by organizer