From the August 1996 issue of Entrepreneur

Some business travelers may still believe quality hotel service can be found only in places, say, 26 stories high, with sparkling chandeliers and a doorman outside. But with limited-service hotels, such as Days Inn, beginning to provide a higher level of service in recent years, many business travelers are discovering the joys of these more affordable accommodations. In fact, in a recent study by Frequent Flyer magazine, close to 92 percent of respondents said limited-service hotels offer everything they need.

"Originally, limited-service lodgings were thought of as 'econo-boxes,' or kind of a cheap place to stay," explains Karen Goodwin, editor in chief of Frequent Flyer. "But now, they have really set out to upgrade their image. The quality is pretty high, and business travelers are asking themselves, Why pay more?"

Why, indeed, when limited-service hotels boast prices averaging $35 to $79 a night; clean, comfortable rooms; and, in many cases, extras such as free local calls, incoming fax service, continental breakfast and more?

Budgetel Inns, for instance, now offer free incoming fax service, keyless door locks for extra safety, and continental breakfast delivered to your room. In addition, Budgetel has equipped all rooms with large desks and dataport jacks for business travelers, and plans to debut its new business-class rooms in coming months.

Up In The Air

The IRS caused an uproar last November when it announced frequent-flier miles earned by employees traveling on business might be taxable. At present, it appears the IRS has backed away from this controversial matter; it has no official plans to tax frequent-flier benefits. However, tax experts agree that the prospect of a frequent-flier tax is an ongoing debate at the IRS.

"A frequent-flier tax is always a possibility," insists Richard Janis, tax counsel with the Air Transport Association (ATA).

What's at stake? Typically, employers reimburse employees for business-related air travel costs and allow them to keep frequent-flier miles for personal use. If frequent-flier miles were to become taxable, says Janis, employees who travel on business and retain the frequent-flier mileage could be subject to taxes.

Exactly how a frequent-flier tax would work, if imposed, is anyone's guess. Myriad problems would need to be addressed concerning how mileage is reported, as well as how to value miles, says Janis. Also, since many travelers pay for business and personal flights with the same credit card, difficulties would arise in distinguishing mileage usage. Ultimately, tax experts predict such a tax would result in more paperwork for business travelers, airlines and the IRS itself.

With this issue still up in the air, only one thing is certain: Most business travelers strongly oppose a tax on airline mileage.

Hoping to put an end to the debate, Rep. Barbara Kennelly (D-CT) has introduced a bill prohibiting taxation of frequent-flier miles. The bill, H.R. 3111, is in committee; Kennelly hopes it will go to a vote before the end of the congressional session on October 4.

To share your opinion, visit the IRS' new Web page at http://www.irs.ustreas.gov, or write your local congressional representative.

Pick A Card

Are your entertainment bills going through the roof? Scads of dining cards have emerged recently that deliver deep discounts on dining out. They also aid business travelers in selecting appropriate restaurants in various locales.

Not all dining cards are created equal, however. Some programs include more restaurants in cities where you frequently dine. And some may include a slim range of cuisines, while others have eateries catering to nearly every palate. Terms vary widely.

For example, In Good Taste (800-444-8872) members pay a $48 annual fee, get 25 percent off meals (excluding tax and tip), and receive a plastic card and booklet of approximately 3,000 restaurants nationwide. Similarly, Transmedia (800-422-5090) cardholders pay no annual fee, receive 20 percent off the check (excluding tax and tip), and have a choice of more than 6,500 restaurants.

Worried that discount cards may not impress clients? For a $49.95 annual membership, Dining à la Card (800-833-3463) registers up to three of your credit cards for use at participating restaurants. At month's end, the company mails you a check for 20 percent off the total bill, including food, beverages, tax and tip-and your clients are none the wiser. "Being discreet and saving money is extremely attractive to many business travelers," says Fanette Singer of The Signature Group's Dining à la Card. The downside? It's only good for the first visit to a given restaurant each month.

Most airlines also offer credit card programs that give members frequent-flier mileage for dining at participating restaurants. Whatever method you choose, be sure the plan is flexible enough to meet your business's needs in a variety of travel situations.

Playing It Safe

The plane crash deaths earlier this year of Commerce Secretary Ron Brown and several company CEOs on an international trade mission brought home the risks a business takes when key executives travel together. In case of an accident, your company could be left without leadership.

Despite the dangers, however, a 1995 Runzheimer International study found nearly three-fifths, or 59 percent, of U.S. companies have no policy prohibiting key executives from traveling together. Worse, the study reveals small businesses are most at risk: 83 percent of small companies have no policy of this kind.

One-Stop Shop

Where can business travelers purchase a Mont Blanc pen and rent a computer for the day? Try Penfield's International Pen Shops in hotels throughout Massachusetts and Rhode Island. The stores combine upscale gifts with a slew of services for business travelers.

"We saw an opportunity to package a retail store in a hotel, offering not only traditional items like stationery and high-end pens but also business services that were sorely missing in most hotels," explains Walt Krawczyk, Penfield's vice president of operations.

In July 1993, entrepreneurs Fred LaSelva, 48, Al Carvelli, 52, and Krawczyk, 45, opened the first Penfield's store in Boston's Westin Hotel. Since then, Penfield's outlets have sprung up in three more hotels on the East Coast: Copley Plaza hotel in Boston and the Biltmore Hotel Grand Heritage and Holiday Inn hotels in Providence, Rhode Island.

With many hotels outsourcing business services to focus on traditional operations, stores like Penfield's are becoming more common. Beyond just a way for hotels to boost efficiency, though, many such shops offer services business travelers couldn't previously find at some hotels. For instance, at Penfield's, guests can rent cellular phones, computers and pagers; express ship documents; or use document translation, desktop publishing, secretarial, faxing and copying services.

So far, the formula appears to be working: Penfield's expects sales of $1.6 million this year, and Krawczyk expects to open two additional stores by year-end.

ROAD NOTES

Brand-name gourmet coffees and beers are finding their way onto hotel and airline menus. Both United Airlines and most Westin Hotels now serve only Starbuck's coffee, and Continental Airlines serves Pete's Wicked Ales as official in-flight specialty beers.

Holiday Inn's "Europe for Less" summer rates are still available through September 7; rates are $99 to $129 in most major cities.

You can earn 500 Delta SkyMiles when booking a rental car from Avis-but you must make advance reservations and show proof of a Delta flight within 24 hours.

Earn 500 miles per transaction by booking flights through Northwest's online reservation service, WorldNetwork, on CompuServe through March 31, 1997. Contact CompuServe at (800) 621-1258 for free software.

US Air Frequent Travelers must now request award certificates by calling the US Air reservations line (instead of the frequent traveler service center). Travelers get tickets mailed directly to them, instead of waiting for a certificate from the service center and redeeming it for the ticket.

British Airways now offers passengers delayed in the United States a prepaid phone card good for a short call anywhere in the world.

Continental Airlines has expanded its nonsmoking policy to include all flights other than those between Newark and Paris or Madrid, Houston and Paris, and Honolulu and Tokyo. Lufthansa has gone smoke-free on intra-European flights of 90 minutes or less and all intra-German flights.

Contact Sources

Air Transport Association, 1301 Pennsylvania Ave. N.W., #1100, Washington, DC 20004;

Budgetel Inns Inc., (800) 4-BUDGET;

Frequent Flyer, (800) DIAL-OAG, (708) 574-6000;

Holiday Inn, (800) HOLIDAY;

IGT Services Inc., 1111 Lincoln Rd., Miami Beach, FL 33139;

Rep. Barbara Kennelly, 201 Cannon Office Bldg., Washington, DC 20515;

Penfield's International Pen Shops, c/o Westin Hotel, 10 Huntington Ave., Boston, MA 02116, (800) 451-1447;

Runzheimer International, (800) 558-1702;

The Signature Group, 200 N. Martingale Rd., Schaumburg, IL 60173;

Transmedia Network Inc., P.O. Box 619400, Miami, FL 33261-9965.