Flying Coach

Business travel used to be almost fun. Agnes Mercier, 31, an account manager for a Paris-based advertising company, remembers jetting freely across Europe, meeting clients over multicourse feasts at some of the best restaurants in London, Brussels and Paris. Now, with her expense account slashed by a third, Mercier can barely afford a sandwich on the Eurostar to London. "They're so expensive," she says. "I don't want to blow my whole per diem on lunch."

It's not just the food. Two years ago business travelers were tossing back free martinis at the airport lounge, riding in chauffeur-driven cars, receiving neck massages in the business-class cabin and slipping into cozy bathrobes--at five-star hotels. Now it's a different world--like falling asleep in a first-class flat bed and waking up stuffed between two snoring passengers in coach. Instead of having their trips arranged by agents over the phone, employees are going online themselves in search of bargain fares. Meetings that were once spread over the course of several days are now crammed back to back--sometimes even held at airports so people can jet in and out on a single day. "Companies used to allow you an extra day to get over jet lag," says Amanda Evans, a London-based film and TV executive who makes frequent trips to Los Angeles and New York. "But now you go straight into the meetings." Some companies have tried to replace travel altogether by installing sophisticated video- and Web-conferencing equipment that they say is just as good as meeting face to face.

The cutbacks have placed already reeling airlines on the verge of collapse. Premium travel on British Airways is down 26.4 percent this year over last. In the United States, where one of the largest airlines--United--filed for bankruptcy protection last December, air traffic is down more than 20 percent. And, in Asia, transpacific travel is down more than 30 percent, mostly because of SARS. The belt tightening helped produce one of the most dramatic casualties of the decline in business travel: the decision by Air France and British Airways to ground their Concorde fleets. The downturn in bookings "is definitely worse than anything we've seen before," says David Radcliffe, CEO of Business Travel International, a London-based travel-management company.

As a result, the line between pampered businessman and bargain-hunting everyman has blurred. A recent survey by American Express found that 54 percent of its clients were buying discounted airfares, once the sole province of the leisure traveler. That's more than double the share of companies that opted for discount fares two years ago. The trend has been driven by the growing number of businesses that are turning to online booking services--customized, internal Web sites designed by firms like American Express, and loaded with a company's travel restrictions and special negotiated airfares. Melissa Abernathy, spokeswoman for American Express Corporate Travel, says these services save money through what she calls "visual guilt." "What happens with these systems, as opposed to a phone call to a travel agent, is the traveler sees 12 options at a glance. You can see how much money you'd save by taking a connection instead of a direct flight or by booking in advance." Pam Borgeson, manager of corporate travel for Motorola, credits her company's online system with saving "double-digit millions" in transaction fees and fare reductions.

Another, more advanced, technology that's taking business by storm is Web-conferencing. "There's a growing acceptance that business can be conducted efficiently and, in many cases, as effectively, without face-to-face communication," says Scott Gillespie, CEO of Ohio-based Travel Analytics. Videoconferencing and teleconferencing have been around for years, but the idea of conducting international meetings over the Web--which allows associates to exchange PowerPoint presentations, technical drawings and Webcam images of each other--is more recent and has been gaining rapid acceptance. WebEx, the leading Webconference company, now has 7,800 clients around the world, including France Telecom, AT&T and the pharmaceutical company AstraZeneca. James Brogan, director of information technology at the New York-based architecture firm Kohn Pedersen Fox Associates, credits the technology with helping his company reduce travel to Asia by 30 percent.

Some business travelers have found a way to enjoy the cutbacks. Allegra Lowitt, product manager for a Boston-based electronics company, recently traveled to Bangkok to meet with manufacturers. Originally, she'd planned for the shortest trip possible: a Sunday arrival and Wednesday departure. But, after checking the Web and calling her travel agent, she discovered that a Saturday-night stay would dramatically cut her airfare. "I remember I was quoted a fare of $1,200 on Northwest. Then, my agent figured out that with a five-night stay, including Saturday, the fare went from being a business fare to a leisure fare. I ended up paying $700"--and gaining an extra day to look around the city.

Many think the recent penny-pinching has grown so ingrained that business travel will never be the same. "Companies are recognizing they can tighten the screws a lot more than they thought they could--with no obvious harm done," says Gillespie. With employees' families increasingly concerned about the safety of international travel, executives are finding they like conferring via the Web with associates on another continent--and still being home for dinner. Analysts predict a permanent 5 to 20 percent reduction in corporate travel in North America. In response, airlines have slashed the once untouchable business fare, introducing an advance-purchase option at 30 to 40 percent off in hopes of luring back their most lucrative passengers. Still, says Gillespie, "Nobody has found the magic formula." Once they do, let's hope it involves four-course meals--and plenty of neck rubs.

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