From the December 2000 issue of Entrepreneur

If you travel a lot, you'd probably rather forget 2000. Airline passenger complaints and flight delays reached record levels. Plus, prices for nearly every travel-related consideration climbed.

Will 2001 be any better? Maybe, maybe not. Anna Magliacano, a senior travel analyst for ShareMax in Parsippany, New Jersey, predicts the hotel business will experience its "highest level of profitability in more than a decade" next year, thanks to higher room rates.

According to Runzheimer International senior consultant Rolfe Shellenberger, travel costs will escalate next year. "This is the biggest increase we've forecast in 20 years," he says, blaming the changes on a projected rise in inflation and suppliers trying to "get more yield from fewer customers." An example: Airlines offering more legroom have smaller passenger capacity. Therefore, they charge more to realize the same revenue per plane.

Shellenberger says business owners aren't powerless to prevent their expenses from ballooning out of control. By carefully monitoring travel-related expenses and taking advantage of advanced-fare purchases, businesses can beat the high prices.

But the news isn't all bad. Along with rate hikes, expect innovation in the travel industry. For example:

Improved travel Web sites. Peter M. Sontag, who runs LowAirfare.com, believes more Internet travel businesses will emulate his model of integrating live agents and online interfaces. "People are so frustrated with the Expedias and Travelocitys of the world, where you have to follow their patterns and do what the computer says," observes Sontag. "Internet users want something where they can go back and forth between a person and the Web."

Card games. What about those long-expected smart cards? This could be their year, suggests Walter Sanders of Diners Club. He says the technology is available to store everything from airline seat preferences to travel policies on a card-based microchip, but the market has been slow to embrace it. "It's a slow evolution," he says, "but I'd expect to see more smart cards in 2001."

Wireless action. Rick Collins, who directs United Airlines' e-commerce marketing efforts, thinks wireless applications are moving to a common platform-meaning it'll be easier for cell phones, personal computers and other computing devices to communicate with one another. "In 2001, users will get information wirelessly and interact with it," he predicts. "You'll be able to track luggage, book and re-book a flight, or get paged with a flight's status."

More niche sites for business travel. Delta Air Lines is offering business travelers a service called MYOB (Mind Your Own Business, www.myobtravel.com) travel. "It offers a full-scale online travel agency for businesses, with access to air, car and hotel services and profile-driven booking in three mouse clicks or less," says Jackie Yaney, a consultant and business partner on small-business travel for the Atlanta-based carrier. Sites such as Trip.com and Rosenbluth Interactive's biztravel.com already offer similar services. Expect more in the coming year.

No one knows the future. But to paraphrase Charles Dickens, 2001 could be the best of times and the worst of times.


Christopher Elliott is a writer in Annapolis, Maryland. Contact him at www.elliott.org.


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