Changewave Research: Business Travel & Airlines Survey

ChangeWave Research: Business Travel & Airlines Survey

ChangeWave Research Report:

Business Travel and the Airlines

Who’s Flying High – and Who’s Not

Abstract

During the week of September 24 – 30, 2003, we surveyed a subset of the ChangeWave Alliance on their business travel patterns and the airlines. Topics included: Are people flying more now for business purposes than they were six months ago? Are travel priorities changing? And which airlines stand to benefit and which stand to lose? A total of 231 members participated in the survey.

Key Findings

• More Flying. By better than a 2-to-1 margin (24% to 11%), respondents say they plan to fly more for business purposes over the next six months rather than less. Another 49% said there will be no change in their amount of business flying.
• Further Evidence of a Business Travel Spending Increase. By a 23% to 15% margin, respondents anticipate their firms will be spending more on business travel over the next six months in comparison to the previous six months. Another 51% said there will be no change.
• American Airlines is Most Popular for Business Travel. Respondents cited American Airlines (15%) as the most frequently used airline for business travel purposes, followed by United (12%) and Delta (11%).
• Southwest, Delta and American Top the List for Pleasure Travel. Southwest Airlines (13%), Delta Airlines (13%), and American Airlines (13%) were all cited as the most frequently used airlines for pleasure travel.
• Delta is the Darling. Members were asked to choose their favorite airline overall and tell why. Fifteen percent (15%) chose Delta, which was highlighted for its Frequent Flyer Program and the convenience of its flight schedules.
• United isn’t. At the other end of the spectrum, United (14%) was cited by respondents as the airline they most try to avoid when flying. Among the reasons cited were poor service and bad employee attitudes/low morale.

Bottom Line: These findings strongly suggest that business flying has already bottomed and is now experiencing an uptick. But the ease of online price comparisons and instant travel arrangements is forcing the airlines to be much more competitive and customer-friendly – and doesn’t bode well long term for the corporate travel agency marketplace.

Helping You Profit From A Rapidly Changing World ™

Table of Contents

Summary of Key Findings...... 3

The Findings...... 6

Overall Business Travel Trends...... 6

Company Specific Business Travel Trends...... 6

Pleasure Travel Trends...... 12

ChangeWave Research Methodology...... 15

About ChangeWave Research...... 16

I. Summary of Key Findings

Overview

During the week of September 24 – 30, 2003, we surveyed a subset of the Alliance on their business travel patterns and the airlines. Are people flying more now for business purposes than they were 6 months ago? Are travel priorities changing? And which airlines stand to benefit and which stand to lose? A total of 231 members participated.

The survey findings are broken down into three main areas of focus:

a. Overall Business Travel Trends

b. Company Specific Business Travel Trends

c. Pleasure Travel Trends

Among the key findings:

• More Flying. By better than a 2-to-1 margin (24% to 11%), respondents say they plan to fly more for business purposes over the next six months rather than less. Another 49% said there will be no change in their amount of business flying.

• Further Evidence of a Business Travel Spending Increase. By a 23% to 15% margin, respondents anticipate their firms will be spending more on business travel over the next six months in comparison to the previous six months. Another 51% said there will be no change.

• Making Travel Arrangements. The majority of respondents (59%) said their firms continue to make travel arrangements through corporate travel agents. However, Online Travel Agencies (28%) and Airline Websites (24%) are also garnering a significant share of the travel arrangements market.

• More Latitude is the Attitude. Overall, 44% of respondents report that their company gives them a “Great Amount of Latitude” in making their travel plans, while 46% say they are given a “Small Amount of Latitude” or “No Latitude.” Interestingly, the smaller the company, the greater the amount of latitude for making travel plans.

• A Coach/Economy Class World. The overwhelming majority of respondents (80%) travel Coach/Economy Class for business purposes. Only 10% said they fly Business Class, and less than 1% said they fly First Class for business purposes.

• American Airlines is Most Popular for Business Travel. Respondents cited American Airlines (15%) as the most frequently used airline for business travel purposes, followed by United (12%) and Delta (11%).

• Best Comforts and Features. American Airlines (12%), Delta (10%) and United Airlines (10%) were also cited by respondents for having the best overall comforts and features.

• Lowest Ticket Price Wins One in two respondents (51%) cited “Lowest Ticket Price” as the most important criteria when selecting an airline for business travel. “Frequency of Arrivals and Departures” (28%) and “Convenience of Arrival Airport” (20%) came in second and third place, respectively.

• Self-Service Check-In Highly Valued. Better than two-in-five (42%) respondents say the most important comfort and feature when choosing an airline for business travel is “Self-Serve Check-In.” Other important features are “InternetBoardingPass” (35%) and “Internet Ticket Sales” (34%). The smaller the firm, the more likely respondents valued purchasing their business travel tickets via the Internet.

• What Airport Services do Business Travelers Value? In general, most members believe the overall “Ease of Use” of an airport is of greatest importance for business travel purposes. Specifically, Long-Term Parking (40%), Baggage Claim (35%) and Security Checks (32%) were cited as most important by respondents.

• Best Airports for Business Travel – Dallas/Ft. Worth and Houston. Respondents cited Dallas/Ft. Worth International Airport (8%), HoustonIntercontinentalAirport (8%), and Chicago O’Hare International Airport (7%) as having the best overall services.

• Southwest, Delta and American Top the List for Pleasure Travel. Southwest Airlines (13%), Delta Airlines (13%), and American Airlines (13%) were all cited as the most frequently used airlines for pleasure travel.

• Delta is the Darling. Members were asked to choose their favorite airline overall and tell why. Fifteen percent (15%) chose Delta, which was highlighted for its Frequent Flyer Program and the convenience of its flight schedules.

• United Isn’t. At the other end of the spectrum, United (14%) was cited by respondents as the airline they most try to avoid when flying. Among the reasons cited were poor service and bad employee attitudes/low morale.

Bottom Line: These findings strongly suggest that business flying has already bottomed and is now experiencing an uptick.

Accompanying this increase is a more efficient use of online resources by customers – includingonline price comparisons and instant travel arrangements – which is now giving them the upper-hand in making travel arrangements. This has forced the airline industry to become much more competitive and customer-friendly–and doesn’t bode well over the long term for the corporate travel agency marketplace.
II. The Findings

A. Overall Business Travel Trends

1. Question Asked: How often are you planning to fly in the next six months for business purposes?

1-2 Times / 35%
3-5 Times / 21%
6-10 Times / 10%
More Than 10 Times / 10%
Do Not Fly for Business Purposes / 17%
Don't Know / 6%

Flying for Business. Just over a third of respondents (35%) said they are planning to fly 1-2 times in the next six months for business purposes; 21% said they will be flying between 3 and 5 times; and 20% said they will fly 6 or more times. Only 17% said they will not be flying at all for business purposes.

2. Question Asked: Is this more or less than you flew in the last six month's for business purposes?

More / 24%
Same / 49%
Less / 11%
Do Not Fly for Business Purposes / 12%
Don't Know / 3%

More Flying. By better than a 2-to-1 margin (24% to 11%), respondents say they plan to fly more for business purposes over the next six months rather than less. Another 49% said there will be no change in their amount of business flying.

B. Company Specific Business Travel Trends

1. Question Asked: Does your firm anticipate spending more or less on business travel during the next six months than the last six months?

More / 23%
Same / 51%
Less / 15%
Don't Know / 11%

Further Evidence of a Business Travel Spending Increase. By a 23% to 15% margin, respondents anticipate their firms will be spending more on business travel over the next six months in comparison to the previous six months. Another 51% said there will be no change.

Interestingly, small to midsize firms (under 1,000 employees) appear more likely to be spending more on business travel over the next six months. By a 26% to 9% margin, respondents working for small to midsize firms reported their firms will be spending more on business travel over the next six months. But the results were quite different for larger firms (over 1,000 employees), where only 18% of respondents reported their firms would be spending more on business travel over the next six months, while 21% reported their firms would be spending less.

2. Question Asked: Does your firm normally make its corporate travel arrangements online or through a more traditional source such as a corporate travel agent or 800 number?(Choose All That Apply)

Corporate Travel Agents / 59%
Online Travel Agencies (e.g., Travelocity) / 28%
Airline Websites / 24%
800 Number to Airlines, Hotels or Other Providers / 6%
Don't Know / 3%
Not Applicable / 7%

Making Travel Arrangements. The majority of respondents (59%) said their firms continue to make travel arrangements through corporate travel agents. However, Online Travel Agencies (28%) and Airline Websites (24%) are also garnering a significant share of the travel arrangements market.

Reflecting the do-it-yourself nature of small business, the smallest firms (1-10 employees) are primarily using Airline Websites (37%) and Online Travel Agencies (32%) to make their travel arrangements; larger firms (over 1,000 employees) are primarily using Corporate Travel Agents (79%).

3. Question Asked: How much latitude does your company give you when making your travel plans?

Great Amount of Latitude / 44%
Small Amount of Latitude / 39%
No Latitude / 7%
Not Applicable / 10%

More Latitude is the Attitude. Overall, 44% of respondents report that their company gives them a “Great Amount of Latitude” in making their travel plans, while 46% say they are given a “Small Amount of Latitude” or “No Latitude.” Interestingly, the smaller the company, the greater the amount of latitude for making travel plans.

4. Question Asked: When you travel for business purposes, do you usually travel Business class, Coach/Economy class or First Class?

Coach/Economy Class / 80%
Business Class / 10%
First Class / 0%
Do Not Travel for Business Purposes / 10%

A Coach/Economy Class World. The overwhelming majority of respondents (80%) travel Coach/Economy Class for business purposes. Only 10% said they fly Business Class, and less than 1% said they fly First Class for business purposes.

5. Question Asked: Which airline do you use most frequently use for business travel?

American Airlines / 15%
United Airlines / 12%
Delta Airlines / 11%
Southwest Airlines / 9%
Continental Airlines / 7%
Northwest Airlines / 7%
US Airways / 7%
AirTran Airways / 2%
America West / 2%
ATA Airlines / 0%
JetBlue Airways / 0%
Do Not Travel for Business Purposes / 12%
No Answer / 14%

American Airlines is Most Popular for Business Travel. Respondents cited American Airlines (15%) as the most frequently used airline for business travel purposes, followed by United (12%) and Delta (11%).

6. Question Asked: What is the most important criteria you use when selecting an airline for business travel? (Please Choose No More Than Two)

Lowest Ticket Price / 51%
Frequency of Arrivals and Departures / 28%
Convenience of ArrivalAirport / 20%
Corporate Rate / 19%
Frequent Flyer Program / 19%
Aircraft Comforts (seat, leg room, etc.) / 6%
Aircraft Amenities (e-mail, TV, etc.) / 1%

Lowest Ticket Price Wins. One in two respondents (51%) cited “Lowest Ticket Price” as the most important criteria when selecting an airline for business travel. “Frequency of Arrivals and Departures” (28%) and “Convenience of Arrival Airport” (20%) came in second and third place, respectively.

• Among respondents citing “Lowest Ticket Price,” the most frequently used airline for business travel was Southwest (15%).
• Among respondents citing “Frequency of Arrivals and Departures,” the most frequently used airline for business travel was Delta (18%).
• Among respondents citing “Corporate Rate,” the most frequently used airline for business travel was American (20%).
• Among respondents citing “Frequent Flyer Program,” the most frequently used airline for business travel was United (25%).

7. Question Asked: Which of the following comforts and features do you consider most important when choosing an airline for business travel purposes?

(Choose All That Apply)

Self-Serve Check-In / 42%
InternetBoardingPass / 35%
Internet Ticket Sales / 34%
Computer Ports / 27%
Free Meals / 26%
On-Board Web Access / 23%
E-mail Service / 19%
On-Board TV / 18%
Purchased Meals / 4%
On-Board Games / 0%

Self-Service Check-In Highly Valued. Better than two-in-five (42%) respondents say the most important comfort and feature when choosing an airline for business travel is “Self-Serve Check-In.” Other important features are “Internet Boarding Pass” (35%) and “Internet Ticket Sales” (34%). The smaller the firm, the more likely respondents valued purchasing their business travel tickets via the Internet.

8. Question Asked: Which airline has the best overall comforts and features for business travel purposes?

American Airlines / 12%
United Airlines / 10%
Delta Airlines / 10%
Continental Airlines / 7%
JetBlue Airways / 7%
Northwest Airlines / 6%
US Airways / 3%
America West / 2%
Southwest Airlines / 2%
AirTran Airways / 1%
ATA Airlines / 0%
Do Not Travel for Business Purposes / 11%
No Answer / 29%

Best Comforts and Features. American Airlines (12%), Delta (10%) and United Airlines (10%) were also cited by respondents for having the best overall comforts and features.

9. Question Asked: Which of the following airport services do you consider most important for business travel purposes?(Choose All That Apply)

Ease of Use / 61%
Parking - Long-Term / 40%
Baggage Claim / 35%
Security Checks / 32%
Parking - Short-Term / 22%
Quality of Food Service / 12%
Retail Shopping / 0%

What Airport Services do Business Travelers Value? In general, most members believe the overall “Ease of Use” of an airport is of greatest importance for business travel purposes. Specifically, Long-Term Parking (40%), Baggage Claim (35%) and Security Checks (32%) were cited as most important by respondents.

10. Question Asked: Which airport has the best overall services for business travel purposes?

(n=114)

Dallas/Fort Worth International (DFW) / 8%
Houston Intercontinental (IAH) / 8%
Chicago O'Hare International (ORD) / 7%
Tampa International (TPA) / 4%
Baltimore/Washington International (BWI) / 4%
Singapore Changi International (SIN) / 4%
Denver International (DIA) / 4%
Pittsburgh International (PIT) / 3%
London Heathrow (LHR) / 3%
Washington Dulles International (IAD) / 3%
Calgary International (YYC) / 3%
Minneapolis St. Paul International (MSP) / 3%
LaGuardia Airport (LGA) / 3%
Orlando International (MCO) / 3%
Hartsfield Atlanta International (ATL) / 3%
Buffalo Niagara International (BUF) / 3%
Philadelphia International (PHL) / 3%
Newark Liberty International (EWR) / 3%
Los Angeles International (LAX) / 2%
Detroit Metropolitan (DTW) / 2%
Harrisburg International (MDT) / 2%
John F. Kennedy International (JFK) / 2%
San Francisco International (SFO) / 2%
Bradley International (BDL) / 2%
Frankfurt Airport (FRA) / 2%
John Wayne Santa Ana (SNA) / 2%
Other / 18%

Best Airports for Business Travel – Dallas/Ft. Worth and Houston. Respondents cited Dallas/Ft. Worth International Airport (8%), HoustonIntercontinentalAirport (8%), and Chicago O’Hare International Airport (7%) as having the best overall services.

C. Pleasure Travel Trends

1. Question Asked: Which airline do you use most frequently for pleasure travel (e.g., vacations)?

Southwest Airlines / 13%
Delta Airlines / 13%
American Airlines / 13%
United Airlines / 10%
Continental Airlines / 7%
Northwest Airlines / 7%
US Airways / 6%
AirTran Airways / 3%
America West / 3%
JetBlue Airways / 2%
ATA Airlines / 1%
Do Not Travel for Pleasure Purposes / 4%
No Answer / 18%

Southwest, Delta and American Top the List for Pleasure Travel. Southwest Airlines (13%), Delta Airlines (13%), and American Airlines (13%) were all cited as the most frequently used airlines for pleasure travel.

2. Question Asked: What is the most important criteria you use when selecting an airline for pleasure travel?(Please Choose No More Than Two)

Lowest Ticket Price / 80%
Frequent Flyer Program / 24%
Frequency of Arrivals and Departures / 19%
Convenience of Arrival Airport / 15%
Aircraft Comforts (seat, leg room, etc.) / 9%
Aircraft Amenities (e-mail, TV, etc.) / 0%

Lowest Ticket Price – the Overwhelming Choice. Four-in-five respondents (80%) cited “Lowest Ticket Price” as the most important criteria when selecting an airline for pleasure travel. Coming in a far distant second was “Frequent Flyer Program” (24%). Once again, Aircraft Comforts (9%) and Aircraft Amenities (0%) were ranked as the least important criteria by members.

3. Question Asked: What is your favorite airline and why:

(n=143)

Delta / 15%
American Airlines / 12%
Southwest / 12%
Continental / 9%
United / 7%
Singapore / 6%
Northwest / 5%
British Air / 4%
Jet Blue / 3%
US Air / 3%
Air Canada / 2%
Air Tran / 2%
WestJet / 2%
Alaska Airlines / 2%
ATA / 1%
Midwest / 1%
Other / 15%

Delta is the Darling. Members were asked to choose their favorite airline overall and tell why. Fifteen percent (15%) chose Delta, which was highlighted for its Frequent Flyer Program and the convenience of its flight schedules.

As RAD9830 put it, “Delta: good frequent-flyer program; accumulate points quickly.” NOM0717 adds, "Delta meets my geographic area best."