The decline of business travel was highlighted last week in the release of “Q2 2009 Travel Industry Insight” by strategic advisory firm Hudson Crossing.
“Big adjustments are being made by travel businesses,” said Michael W. McCormick, managing partner of the New York city-based company. “We are seeing everyone from suppliers to travel agencies get much more creative in their approach to generating revenue. From deep discounts to the disappearance of fees, travel businesses are taking bold action to acquire a disproportionally larger share of a diminished pool of travelers. We believe these actions are a leading indicator that the industry is in process of establishing a new point of equilibrium.”
As the ripple effect of falling travel demand that is driven by the recession is felt across the travel industry, current trends are shaping the future of travel.
Some of Hudson Crossing”™s expectations for the second quarter include:
— The decline in business travel will remain in effect for the rest of 2009 and it will not begin to change until the next budget cycle late in the fourth quarter.
— Suppliers will take “bold action” with their loyalty programs and offer aggressively priced packages to lure travelers.
— “Online booking fees from online travel agencies such as Orbitz.com and Travelocity are likely gone for good” ”“ but whether or not it was a wise financial move in the longer term “is yet to be determined.”
In the report, Hudson Crossing also reviews travel industry events and actions in the first quarter of the year that provide a foundation for events to watch in the second quarter. The full report and details about Hudson Crossing’s expectations for the second quarter can be accessed online at hudsoncrossing.com
