Online Travel Outfits Target Business Customers

The sad-sack business traveler has been put upon in recent years, coughing up thousands of dollars for last-minute flights, while leisure travelers snap up last-minute Web fares for a fraction of the cost. But that is all changing.

Business travelers, especially those at small- and medium-sized businesses, are now getting the chance to play on a level field, where Web fares mingle with corporate discounted fares and last-minute deals -- all on one screen.

On Wednesday, Travelocity, a unit of Sabre Holdings(TSG), debuted "Travelocity Business." With the move, the online travel outfit joined rivals Expedia(EXPE) and Orbitz in launching special products targeting companies with unmanaged and lightly managed travel needs.

"We allow corporations to load in their own negotiated rates, tell us who their preferred vendors are, which they can see along with all of Travelocity's unique content and fares," said Ellen Keszler, president of Travelocity Business. "Travel managers can set up their travel policies as they see fit and we'll encourage travelers to book the preferred carriers and help enforce the policy so they book the lowest fare."

Over the last six months, the online travel agencies have begun pushing into the low end of the corporate travel market, offering a variety of features at a fraction of the cost to companies so small they don't need to pay big bucks for full management of their travel needs.

"On average airfare booked online is 20% below what they'd buy from an agent on the phone," said Keszler. "And the corporation would save significantly on service fees. Ours is just $5 for online bookings and $20 for bookings over the phone. That's dramatically less than what full management costs."

Keszler estimates the market size for lightly managed or unmanaged businesses is $82 billion a year, which is one reason why all three online agencies have been creating new services for business. In 2002, the number of bookings at company-approved online agencies was $5 billion, according to Jupiter Research, which says that number will jump to $27 billion by 2007.