Drop in business travel hurts hospitality industry

It was 2 p.m. on a recent Thursday outside of one of Pittsburgh’s busiest business hotels, and the cabs parked there hadn’t had a customer in the last hour and 20 minutes.

It was 2 p.m. on a recent Thursday outside of one of Pittsburgh’s busiest business hotels, and the cabs parked there hadn’t had a customer in the last hour and 20 minutes.

Charles Chuckee knew exactly how long it had been because that was how long he had been sitting in his cab waiting for a fare. The guy in the cab in front of him had given up and driven away.

You don’t have to tell cab drivers in Pittsburgh that there has been a drop in business travel.

You don’t have to tell Mike Vargo, either. Vargo is spokesman for West Mifflin, Pa.-based Corporate Air, which services private jets and leases them when their owners aren’t using them. Most of the travellers are salesmen and executives.

A drop in flights has cost some of the people who schedule, clean, maintain and refuel the planes their jobs. They’ve been the ones hurt, Vargo said, by the demonization of traveling on private jets — not the CEOs who have been labeled as fat cats.

At most, he said, those executives are inconvenienced, and the companies spend more to send them on commercial flights, if their hourly wages are taken into account.

Two factors are driving down business in the sector. First is the overall state of the economy. As Susan Gurley, executive director of the Association of Corporate Travel Executives, said, “A lot of this is: Business is down, ergo, people travel less.”

The other factor affecting business travel is what Gurley calls the “sniff test,” or how a meeting would be portrayed if a newspaper reporter walked in and wrote about it. Would it stink in the next day’s paper?

That stench covered AIG when, one week after the insurer was bailed out in September, executives went to a resort in California where they included more than $30,000 for spa treatments and greens fees in the $400,000 bill.

To avoid the bad smell, Gurley said, many organizations are choosing to hold their meetings in less “glitzy” locales.

It’s a trend that has helped Pittsburgh but hurt Las Vegas, even though Vegas is often easier to get to and, in many cases, has more hotel rooms available for less money.

Gurley said most business travellers weren’t going to resort locations for the amenities. Most business travel involves long meetings and working from early in the morning until late at night.

“It’s a slog,” she said. “The business traveller doesn’t have time for these spa services.”

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