Dispatch 14

We’ve been telling you for a few years about airlines aiming to minimize corporate discounts, limit who gets them and shift to other forms of contract value. (See here, here, here, here, here and here.) Reflecting all that, a new American Airlines offer sits between the AAdvantage Business small business program and bespoke, large corporate discount deals.

We heard the carrier has gone to some companies that never had discount programs — or had them taken away in AA’s 2022-2024 value destruction exercise experiment — with modest fare discounts and goodies including waivers, loyalty program status appointments and flexibility on unused tickets.

AA did not confirm any details. “American is continuing to engage with our partners to offer agreements and discounts that advance our strategy to continue recovering share in indirect channels,” according to a spokesperson.

AAdvantage Business is positioned as the airline’s small business program, but materials indicate it can be for any company. Some buyers aren’t sure which companies such supplier “small business” programs target.

Cookie-cutter programs may be better than nothing in a generally supplier’s market, even though there’s no great way to measure such value-driven programs.

Protect the planet or protect your body and your stuff from the ravages of Cimex lectularius? A Helsinki-based company doesn’t want you to have to choose. It’s pushing a pesticide-free, non-toxic treatment to eradicate bed bugs.

According to Valpas, which commissioned an independent study on the matter, one in 50 hotel rooms experiences an infestation each year, costing the industry 15 billion euros in lost revenue. Ridding a 50-room property of the pests using traditional means involves “heavy-duty chemical fumigation” in the affected and adjacent rooms, along with “full-property preventive chemical treatment,” resulting in 70.8 tons of CO2 emissions annually. According to Valpas, that’s equivalent to one passenger flying between London and New York 229 times. Meanwhile, commonly used pesticides “disrupt biodiversity and reduce vital pollinators.”

The Valpas solution uses special legs installed on guest beds. Bed bugs cannot climb over the coated surface and instead get trapped. The devices also convey info about bed bug activity.

Reaction: Thanks for commentary from readers, including Mat Orrego, Nicole Del Sesto (and again and again), John Harvey, Lisa Simpkins, Chris Dane, Andy Menkes, David Bishop, Kevin Trill, Steve Luzzo and Tony O’Connor.

Around The Web

• Here’s coverage in Business Travel Executive of the “divide and conquer” approach to travel management program control and support from the October BTE Town Hall event co-hosted by The Company Dime. The December Town Hall episode produced this report on working with new entrants.

• When The Wall Street Journal on Jan. 20 published “These Frequent Fliers Are Done With Loyalty Programs,” we assume they had already read, “Frequent Fliers Are Rethinking Loyalty Programs and Setting Themselves Free,” published Nov. 28, 2024, by The New York Times. Bottom line? Some flyers are complaining about devalued loyalty programs and declaring their independence.

• Both papers also weighed in on expense management, with “In a Perfect World, We’d Eliminate Expense Reports — We’re Getting Closer,” by the Times on Nov. 3, and “Strippers, Christmas Gifts and an RV: Workers Push It With Company Cards,” by the Journal on Nov. 20. The Journal even used that priceless expression: “the company dime.” More recently, AccountingWEB on Feb. 10 highlighted “The 5 Types of Fraud That Are Draining Your Business.”

• One more from the Journal: “How Uber and Lyft Are Gearing Up for the Robotaxi Revolution.”

• Here’s VentureBeat (by way of Google) on AI agents.

• PitchBook gives TravelPerk a 97 percent chance of going public.

• The Onion gets the last laugh. Real ID — too easy?

Go Figures

Delta and United are killing it internationally. In the fourth quarter, United reached its pre-pandemic transpacific capacity level and reported a full-year profit margin in the region that atypically beat its system average. The carrier’s transatlantic passenger unit revenue growth topped 7 percent year over year, the highest among its regions. United has more international capacity than any other U.S. airline.

“International is just unbelievably strong right now,” United chief customer officer Andrew Nocella told equities analysts on Jan. 21. “It is going to continue to lead the way for the coming years.” The constrained supply of widebody airframes and engines is a big part of that outlook — plus torrid demand, equals higher fares.

Delta president Glen Hauenstein called transatlantic performance “really, really strong … not only advanced bookings, but close-in business travel.” Considering the fourth quarter is “off-peak,” the carrier’s transatlantic results were “unprecedented,” he said on Jan. 10.

Meanwhile, BCD Travel’s Advito reported higher fourth-quarter business- and economy-class airfares from North America to every other region except Latin America. Business class fares to Europe were up 9 percent versus 2023.

For bookings in Concur Travel, international airfares were flat in July and then rose by an increasing margin in each of the next five months, according to an SAP Concur report. In December, the average international fare was $2,885, 11 percent higher than a year earlier.

Looking ahead, buyers are bracing for more travel cost inflation. In a GBTA January poll of 339 travel buyers, more than four in five identified rising travel costs as one of the “most significant” business travel issues this year.

GBTA’s latest industry poll results gave a fairly rosy outlook but buyer expectations for growth were not as robust as their observations for 2024. Seventy-one percent saw their company’s business travel bookings increase last year versus 2023 and 77 percent said travel spending increased. For 2025, 48 percent anticipated trip volume to go up versus 2024 and another 39 percent predicted no change. A larger proportion, 57 percent, said 2025 business travel spending would rise versus last year, with 31 percent forecasting flat expenditures.

The biggest trip type bucket is expected to be sales and account management meetings with current and prospective customers — as it had been in several previous GBTA polls in recent years — accounting for 27 percent of 2025 trip types. For all trip types, more respondents expected increases than decreases. Nearly half said project-based business travel would increase this year while 5 percent said it would fall.

Pithy Wisdom

“There is a feeling that loyalty programs are redefining loyalty, and I would say loyalty is not how much you spend; loyalty is whether you stay in X Hotel on a Tuesday night or choose to stay somewhere else. That loyalty is choosing to stay with Chain A, not Chain B. So I do worry that programs are moving towards how much are people spending and I don’t think that’s loyalty.”

Nicholas Nelson, ESG, global supplier and developing markets travel leader at EY, during the November 2024 GBTA Europe conference in Copenhagen. Image: GBTA