Business fliers start to return to premium classes

September 26, 2011, 8:53 PM

— -- Business travelers are tiptoeing back to first and business class.

With corporate profits on the rebound, more travel managers are lifting restrictions and approving premium-class travel that was deeply cut after the 2008 financial collapse.

The number of North American companies that allow premium-class air travel rose 5 percentage points to 56% in 2011 from a year ago, according to the Global Business Travel Association.

European corporate travel managers are more optimistic. Despite gloomy economic indicators, 46% of European travel managers surveyed by the association say they're approving premium-class airline travel to North America vs. 34% last year at this time.

That coincides with the most recent figures from the International Air Transport Association, which reported last week that traveling overseas in first- or business-class seats rose 7.5% in July compared with a year ago. That follows a climb of 6.4% in June.

"Cost savings is still on top of their mind, but we're definitely seeing loosening up of some of the restrictions that were in place in who could travel in business class," says Megan Costello, managing director of the Association of Corporate Travel Executives. "But it's slow and steady. Not a huge opening of floodgates."

Higher-end hotels also are seeing a pickup as companies feel less pressure to avoid ostentatious settings for sales conferences or for rewarding incentive travel for employees. Revenue per room for the luxury segment of hotels in the U.S. — properties such as Ritz-Carlton, St. Regis and Four Seasons— rose 16.9% in mid-September, outpacing other types of hotels, according to UBS Investment Research. In comparison, revenue per room rose 10.1% for all hotels in the U.S.

The pace of recovery isn't quick enough for some travelers who were once accustomed to business-class seats.

Only 10% of companies let employees upgrade to first or business class on flights within North America, Global Business Travel Association data show. About a third authorize business class on flights to Europe or South America, it says. Nearly half do for trips to Asia.

Meanwhile, some of the cost-saving measures and planning restrictions that travel managers put in place in recessionary times will remain so long as the recovery is on the mend, Costello says.

According to the association survey, 56% of companies still require employees to consider lower-fare alternatives departing up to two hours before or after their preferred departure time.

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