NEWSWEEK: What’s unique about small business travelers?
Ed Perkins: When you contrast small business with big business, you’re talking about a whole different set of circumstances. Many medium-sized to big corporations have sweetheart deals with one or more airlines and hotel chains, and when the business traveler takes a trip, a lot of decisions about which suppliers to use are automatic. This is the big challenge [for the small business traveler]. If you don’t have the clout to get sweetheart deals, the travel industry has you targeted for a fleecing. The trick is to get the trip that serves your needs best but to figure out how NOT to pay top dollar for it. That’s the focus of my book.
Why does the travel industry use multiple pricing?
The whole idea is to extract the maximum dollar amount that each customer is willing to pay. It never works out quite that precisely.
How does hotel pricing work?
Historically, hotels cut prices by going through third-party hotel discounters… Now, more and more, when you go to a hotel Web site, any rate you see on the hotel chain’s own site is likely to be as good a rate as you’re going to get through any discounter. I was recently looking up rates for a place I had visited–Bangkok. For of the top-rated hotels in town, the [hotel’s published rate] was something like $275 dollars a night. But on their own Web site, this hotel was selling an “Internet special” for $120. There were some limitations–just as with the airlines, you had to buy in advance, and there was a cancellation penalty and some restrictions that made it less attractive. But you can find a lot of different rates. All you have to do is to go on to any one of these major hotel chains’ Web sites.
For the best deals at hotels, should you go to a hotel’s Web site first?
At this point, you should always start with the hotel’s own site. There’s a good chance that you’ll get as good a deal there as you will anywhere else. There’s a reasonably good chance–and again, this is not a 100 percent kind of thing–that the rate you get through the hotel chain’s site will be less restricted than the rate you’d get through a discounter. If you want to spend some time looking around, check one of the discounters. The biggest in the country is Hotels.com. One of the ones I like is Quikbook.com. With Hotels.com, you actually have to pay Hotels.com–if you make a change or get a refund, it has to come through hotels.com. Quikbook.com makes a reservation for you and you pay at the hotel the same way you would if you paid a regular rate. So it’s a little more flexible. Then there is another site called Placestostay.com. On my favorites list, I probably have–I’m guessing–about 60 or 70 hotel discount outfits, from all over the world… You can go to one of the sites like Travelaxe.com or Sidestep.com or Bookingbuddy.com, one of the so-called screenscapers, sites that check everybody else’s site… The only odd thing about these types of sites is that they don’t include the hotel’s own site.
Sorting through all of this information doesn’t always seem worth the time spent on it.
It’s awfully easy to sit at a computer and spend two or three hours trying to knock 20 or 30 dollars off a hotel room. And it’s a pretty poor use of time. There’s still a very good case to be made for a small business traveler to use a travel agent… This is another area where the big online sites are coming in: Expedia, Orbitz and Travelocity. Part of their business model for small business is a kind of hybrid, where online transactions can be used but there’s also a fully manned travel service with professional travel agents. So if you need a little bit more hand-holding, they’ll do that for you too. They are pushing that concept, and I think with some success.
How would you go about finding the best airfares and air-travel deals?
The major travel Web sites pull the pricing out of the same databases. But they do not have deals with JetBlue and Southwest. It seems to me that until they solve that problem, they are not going to have the full solution to business travel that they like to claim they have.
Any tips for small business travelers when they rent cars?
The biggest thing you have to worry about with rental cars is the huge number of add-ons. I have an example in the book about something that was nominally supposed to be $32 dollars that ended up being $65. The difference was all add-ons.
I’ve heard that if you rent a car when you are overseas, the price will be different than if you reserve it from here in the United States.
If you’re talking about Europe, it’s usually cheaper to reserve from the United States. I haven’t checked the prices lately, but if you were in France, say, and you suddenly decided you wanted to rent a car, the best way to do it would be to get on the phone and call Hertz or Avis or someone like that in the United States. You’d get a better price than calling the local Hertz or Avis office in France. I can’t guarantee that’s still the case, although I suspect it still is. But rental car companies do charge differential rates depending upon the location from which you call.
So, how do you avoid those add-on charges?
A lot of them are airport-related, so if you don’t need a car for the first day or so, you’re probably better off not renting from the airport. Just take a cab or the shuttle to the hotel, then rent a car from there a day or two later. But it does not pay for a business traveler to say, “These airport rates are high so I’ll take cab in to town and rent a car in town.” You’re talking about a cab fare, you’re talking about extra hassle, and I think most people would just as soon pay an extra $10 or $15, which is the kind of money we’re talking about. When you compare rates, you should go to Orbitz or Travelocity, both which give you the option of comparing total costs, not just base rates. Expedia may have this now too. At least that gives you an accurate comparison about how much you’re going to pay.
What would you say are your three most important pieces of advice for small business travelers?
Number one, which is perverse, is that the best way to save money on travel is to stay home. Which means you should do a rigorous job of planning when you really need to travel. Don’t travel when it’s unnecessary. Do your own cost-benefit analysis. And don’t spend the kind of money that a trip costs these days unless you can be reasonably sure that it’s going to be profit positive for you. Number two: Use a consistent strategy. The one I recommend is to check the benchmark for the most obvious, most efficient trip, and then see if you can beat that benchmark without compromising efficiency. And No. three: Don’t spend hours looking for cost reductions of pennies. Make sure what you do is an efficient use of your time. Consider using a travel agent or one of the online services that has that capability, rather than spending hours and hours on the Internet tracking minor improvements.
