Airlines High on Meeting Fares


Do the airlines' discount programs for meetings really mean anything in a world where consumers can access thousands of fares with a tap on their screen, and even procrastinators can find deep discounts themselves? That's a question airlines are mulling. 

In recent years, carriers have ditched other types of discounts, such as senior-citizen fares, student fares and other prices targeted to a particular demographic. Meanwhile, they're tightening restrictions on their lowest fares.

The relevance of meeting fares was further called into question following Delta Air Lines' decision to yank a discount for attendees to the National Rifle Association's annual meeting in Dallas, in response to the school shooting in Parkland, Fla., last February. The move sparked a nationwide controversy (and a backlash in the carrier's home state of Georgia), but to industry insiders, one detail in particular caught their attention: Just 13 NRA delegates had availed themselves of the Delta discount before it was pulled -- although the convention at that point was still fully two months away.

All this might suggest that convention discounts are facing extinction. But many industry insiders say there are compelling reasons to continue offering these traditional quid pro quo arrangements. "Giving price breaks or incentives in exchange for ticket sales that are greater than a single passenger -- that is a model that makes sense," says Gary Leff, an aviation expert who pens the View From the Wing blog. "For the airlines, the discounts are a relatively low-cost product -- at least until they become a media story," he adds with a trace of irony.

Changes in the Air
High fares, poor customer service, ubiquitous fees and cramped seating are perennial passenger sore points. The good news: Airlines are rolling out a slew of new tools and services that will not only take the sting out of getting from point A to B, but will ease your workload, too.

Airline prices should remain stable for the foreseeable future. (See "Forecast 2019.") While fuel prices are rising, competition is keeping fares down. As of mid-2018, average domestic fares were around $350 to $400 roundtrip. For group travel, industry-led New Distribution Capability technology will give more agencies and planners access to customized fare packages, rather than requiring them to assemble the components separately. 

Plus, with voice-enabled airline reservations taking off, screen-free searches are an appealing alternative to the clunky process of scrolling through interminable displays of flight and hotel choices.  

Next up: virtual-reality headsets that let you check out an airline seat or a hotel bed in advance, now being tested by European travel tech giant Amadeus.

Those "time to check-in" emails might soon become obsolete, as airlines are dispensing with this step. Delta will automatically check in passengers who've downloaded its app 24 hours in advance; the boarding pass will simply show up on their mobile devices. Lufthansa and Swiss are automatically checking in select passengers as well, and Southwest does so for "early bird" customers. 

Lufthansa is behind another industrywide innovation, an app called AirlineCheckins, available for Apple and Android smartphones, which can be used for up to 200 carriers worldwide. Its programming interface can be incorporated into corporate travel management systems, and personal information, including seating preferences and frequent-flyer programs, can be updated in the app.

Uninterrupted high-speed Internet with at-home speeds and bandwidth is becoming ubiquitous, not just over the continental U.S., but over the oceans, too. Gogo, which currently works with Delta and dozens of other airlines to provide inflight WiFi, is rolling out a satellite-based system that can offer speeds of up to 70 megabits per second. Delta recently said it would make WiFi free to all passengers, and free texting will also take off as more carriers join American, Delta and others in rolling out this perk.

Orlando Airport has announced it will soon become the first airport in the U.S. to scan all arriving and departing international passengers by using biometric technology -- in particular, biometric facial scans. Passengers who voluntarily provide their documents and get their picture taken can board through a separate self-service gate (assuming the scan doesn't detect a prohibited flyer). 

Delta, JetBlue and other airlines are testing other forms of the technology, like iris scans, to speed up the screening process, starting with passengers who have TSA PreCheck status.

Airlines are deploying robots that will roam lobby floors and let you handle a variety of transactions. A new model from appliance-maker LG can scan boarding passes and even give detailed directions in multiple languages. Airports also are positioning more wayfinder beacons around terminals to help you predict more accurately how long you'll cool your heels at the TSA checkpoint and, at some monster hubs like Atlanta or Heathrow, give you an estimate of how long it'll take to walk from point A to point B.

Why court groups?

Meetings fares have other benefits for airlines that can outweigh any potential loss in revenue: They put the airline's brand front and center for those organizing high-profile meetings and their participants, and can bring in repeat business year after year. Meanwhile, after years of losses and a wave of mergers and acquisitions, today all U.S. airlines are once again investing in their core product, buying new planes and upgrading inflight entertainment along with other amenities. 

Some carriers are even bringing back that staple of late-night comedians: the hot meal in coach (whether it tastes any better is another question).

Consider American Airlines, which emerged from the turbulence in the industry as the largest airline in the world and today is solidly profitable. "We have invested a lot of capital into improving our product," says Libby Severance, American's manager of group sales, referring to shiny new fleets and upgrades to inflight amenities. "That has given us an opportunity to reimagine travel for groups as well. We listened to our customers so we could deliver the right products and the best value to all of them." 

Part of that process was to move away from a one-size-fits-all approach to meeting fares. In fact, after weighing various options, last year the airline came out with a new meetings product called MCD, which stands for "meeting/conference discount," a program that tailors incentives and pricing to particular types of group travelers. 

What differentiates the MCD program from past iterations is that it carves out a niche for trade shows and other large events. The fare discounts range anywhere from 2 percent to 10 percent, and in certain cases can go as high as 15 percent. "These are discounts off any published fares, with the exception of basic economy, which is nice for the participants, especially those who want to fly in first class," says Severance.

Demand has been so strong that total MCD bookings have increased more than tenfold this year over 2017, according to Severance. "Our MCD program works for smaller trade shows all the way up to citywide venues that draw thousands of people." She emphasizes: "This isn't designed to compete with any of our corporate contracts, but rather to complement that product for the trade show or conference audience."

Lowest fare isn't always best

Most large corporations already have negotiated corporate rates in place with their airline partners. With airline consolidation, most of that business-travel revenue is going to four behemoths: American, Delta, United and, to a lesser extent, Southwest (which doesn't fly long international routes). That means some business travelers can use their corporate rates when attending a meeting or convention, which might be better than the convention fare arranged by the sponsoring organization.

That's where a meeting planner can get creative and combine elements of the traditional airline percentage-type discount with other money-saving options. "Just pick any client you could think of, and there's probably a convention or major meeting associated with that particular organization," says Patty Clark, director of global group transport services for CWT Meetings & Events, a division of the giant Carlson Wagonlit Travel group. 

With large clients, such as a major pharmaceutical industry association, Clark takes into account all of their airline relationships, and also weighs other options, such as blocking space on specific flights or even chartering an entire plane if it make sense. The client drives the process, she says, and simply going for the lowest fare isn't always the right move.

"We really focus on traveler convenience, Clark notes. "If you're going to be making a presentation on day one, you may not want to take a red eye to get the lowest price."

For one large CWT customer, a multinational agricultural corporation, a combination of meetings discounts and blocked-space bookings helped to greatly expand their incentive travel program, says Clark. According to a case study published by the company, CWT grew that client's group-air program by 1,000 travelers over a three-year period, for a total of $6 million in air-travel expenditures.

A careful analysis of options also is helpful when many attendees don't live near a major airport. For a group departing from the same place on the same date, a plane charter saves time -- and maybe money, as well. Sometimes charters can be arranged directly through a major airline, or with an aircraft charter broker. 

"In some cases, we use all three types of programs -- group discounts, block space bookings and charters -- to move a huge number of people," Clark says. "At the end of the day, it always comes back to the stated goals of the client."

When travelers go rogue

Another factor to consider: Business travelers are taking charge of their airline bookings. "One of our biggest concerns has always been the traveler who goes rogue," says a manager in group discounts at a major airline, who requested anonymity due to the sensitivity of the issue after the NRA flap.

Among the reasons they stray: Frequent flyers with special status are fiercely loyal to their carrier of choice. Also, if the company has corporate discounts with a particular carrier, they might not be inclined -- or even permitted -- to use a meeting fare. 

Airlines are taking notice: Delta recently rolled out a program that specifically addresses the meetings needs of its corporate clients. Called Delta Edge Meetings, the program is designed to coordinate travel and expense accounting for both convention and corporate travel contracts. It guarantees that perks included in the corporate contract -- such as priority boarding, preferred seating and faster rebooking -- will be extended to all meeting travelers, some of whom might ordinarily not travel enough to qualify for frequent-flyer status.

In announcing the program, Delta sales execs cited the "often fragmented nature of the meeting planning function" within many organizations, which can result in lost data and make it harder to get a handle on a corporation's overall travel volume. 

But more to the point, Delta Edge Meetings automatically provides corporate clients with the best price, whether it is the meeting discount or the fare included in the corporate sales agreement.

More programs are coming

Other airlines are responding to the uptick in meeting travel. According to a recent survey conducted by Oxford Economics, global spending on meetings and conventions has increased by a healthy 23 percent in less than a decade, accounting for a total of more than $325 billion in direct spending annually, with $42 billion of that total going for transportation to and from the destination.

United Airlines plans to release a new package of tools to help make the meeting planning process more efficient by early 2019. "We're creating a more customer-friendly, industry-leading registration and meetings management platform," says United's director of sales, Eric Schmauch. "We continue to work in tandem with our top customers and collaborate directly with them." 

Based on early feedback from clients, United reduced the minimum group size to qualify for a discount from 20 to 10, and is sending out productivity reports on a monthly basis instead of quarterly. Among the airline's biggest exclusive clients are the National Association of Collegiate Directors of Athletics, whose annual convention drew tens of thousands of attendees to Washington, D.C., in early July, and Houston's MD Anderson Center.

A number of organizations have found that developing a close tie with a single airline can produce results. The National Tour Association, for example, inked a deal with Delta a few years ago that made the airline its preferred partner for its annual Exchange confab, which typically draws more than 1,200 delegates. As part of the agreement, the NTA arranged for members to promote Delta as an air partner in the carrier's tour brochures. 

Delta's discount for gatherings like NTA's upcoming Exchange in Milwaukee is around 10 percent -- on the higher end of the range. "I do think that usage of those discount codes has increased over the last two years as a consequence of our elevating Delta as an airline of choice," says Katey Pease, vice president of business development for NTA. "Whether it saves you $5 or $60, it's worth it." 

Bigger isn't always better

It seems logical that the biggest airlines, with their vast route networks and international reach, would always win out in the meeting-business derby. But William Reed, director of meetings and community relations for the Washington, D.C.-based American Society of Hematology, says it isn't so. Despite the size of his organization -- some 17,000 members, many from abroad -- he doesn't think sheer size gives him any more clout than other groups might wield. The association's annual convention typically draws more than 20,000 attendees and is held in a large U.S. gateway city. 

And smaller carriers might not go out of their way to market their programs, but their group deals can be just as enticing. At JetBlue, negotiated group business has grown primarily due to word-of-mouth buzz, says Tamara Young, a spokesperson for the carrier. And its designation as the "official airline" for high-profile events like the Boston Marathon have helped buffed the airline's image for organizers of other big-name gatherings.

"This type of business is organically grown," Young says. "We feel like there will always be a need for this type of offer, whether it's the local orthodontist's office traveling for an end-of-year incentive or a large insurance company traveling to their annual meeting."