Affluent Business Travelers are Flying High
As the travel industry prepares for an uncertain summer season (amid airfare price hikes, decreasing demand and the growth of “staycations”), many advertisers are setting their sights on reaping the rewards of a re-energized business travel segment. Thanks to job growth, improved productivity and recent economic gains, the frequency of travel among affluent ($100K+) business travelers is starting to heat up. As a result, it's paying dividends for some leading brands.
Consider the growth of these brands (2012 vs. 2010):
Hotel Category (percent increase of Affluents that stay at brand past 12 months)
Marriott and Hyatt have both cited business travel or group travel as recent positive trends and Westin and Sheraton have always excelled at catering towards business travelers.
Car Rental Category (percent increase of Affluents that used brand in past 12 months)
Hertz and National both have upgraded their loyalty programs, catering to affluent business travelers, with status matching deals.
Airline Category (percent increase of Affluents that use brand most often)
While some airline growth may be due to mergers (i.e., AirTran and Continental), JetBlue has clearly focused on growing its business travel customer base and Delta has one of the best reward programs in the industry.
Wheels Up for Affluents
While non-affluent business travelers have decreased their travel frequency by 17%, affluent business travelers have increased theirs by 27%. This demonstrates a trend seen in many companies, where senior-level employees are bearing the brunt of most decision-making -– and business travel. Consider this, affluent employees making more than five round-trips each year now represent more than a third of all affluent business travelers. And senior executive affluents that travel frequently now represent approximately 41% of all executive business travelers. As these groups continue to make up a greater portion of the overall business travel segment, travel brands are taking notice, especially as leisure travelers gravitate towards staycations and delayed travel.
Another signal that shows affluent business travelers are hitting the ground running is:
Monthly Online Travel Agency Reservations (percent used past 30 days)
January 2010 - January 2012
Affluent Business Travelers 40% - 51%
Managed Travel Department Spending
Decision-makers for managed travel departments reported spending approximately $88,000 annually vs. $140,000 two years ago. The drop in spending reflects a decrease in convention attendance and other company events, placing more importance on conducting day-to-day business.
Tips for Targeting Affluent Business Travelers
1) Highlight your amenities. 58% of affluent business travelers report this is a factor for them when selecting a hotel.
2) Continue to integrate with online tools and sites. Currently, 33% of affluent business travelers book via expedia.com, highest among the OTA’s.
3) Focus on special promotions and value. 61% of affluent business travelers report that special promotions are a factor when selecting a hotel and 32% report value for the money is very important when selecting an airline.
Despite changes in travel patterns and uncertainty about leisure travel in 2012, the uptick in business travel is a bright spot that marketers should not overlook. Even within the business travel segment, affluent travelers are the most attractive audience; and -– for better or for worse -– they are the ones earning their miles.