As the global aviation industry picks up steam again, U.S. airlines are getting more creative when it comes to keeping their most precious flyers: business travelers.
On average, US airlines want to replace around 86.5% of their sales from 2019. United Airlines revenue is down 85% so far this year.
Now United, the country’s third largest airline, is working with meeting and event space company Peerspace to bundle flights next to office space. The airline is looking for professionals whose jobs require long-distance travel again.
“We are an airline. We are not in the office space business or the meeting room business. But how can we solve the problem of people coming together safely? “Said BJ Youngerman, who leads United’s California marketing strategy. “Regardless of where someone lives temporarily or permanently, we have the opportunity to bring people together.”
Peerspace’s platform offers nearly 20,000 seats in 1,800+ cities, many of which are located near United’s hubs.
Youngerman said the idea was first discussed in April but has not yet been formally put together. Packages start at $ 5,000 and include round-trip airfare and a short-term work area or “unique collaborative” space for small gatherings.
According to the Global Business Travel Association, business travelers and their employers contributed $ 1.5 trillion to the global economy in 2019, with more than 60% of travelers staying in an “upscale or higher” hotel. In a typical year, business travelers make up 75% of an airline’s bottom line.
Airlines are not alone in their dependence on business travelers. According to STR, an analyst for the hotel industry, the group occupancy of more than 10 people is around 4.7%, which corresponds to a decrease of more than 80% compared to the previous year. Marriott’s business travel is down 79%, and Hilton hasn’t done better.
During a recent call for profits, Hilton CEO Christopher Nassetta came up with the idea of converting unused spaces into offices for meetings or short-term use by college students.
“We are examining every opportunity how we can use all of our spaces and public spaces in creative ways to complement and find demand,” said Nassetta. “Sell them as offices. Sell them as dorms. All of this flows into the room turnover. “
On Tuesday, Hilton announced a pilot program in the US and UK called WorkSpaces by Hilton that would offer a room, desk, and WiFi at a daily rate. Marriott is expected to launch a similar program soon.
At the end of September, the international luxury hotel brand CitizenM launched a subscription service for business travelers to become the “Netflix of the hotel industry”.
For USD 600 per month, guests have full access to CitizenM’s work areas, meeting rooms and amenities and can sleep there for three nights. There’s also a $ 1,500 deal called Global Passport that allows 30 days at any CitizenM hotel as long as guests stay at least seven nights at the current room rate.
“This concept of how to organize your workforce after a pandemic is a very hot topic among executives right now,” said Ernest Lee, CitizenM’s general manager. “Remote work, hybrid remote work will increase exponentially after the pandemic. There will still be areas where video conferencing is personally superior. We want to serve as a personal connection for these teams. “
While the plan was inspired by the pandemic – Lee described CitizenM’s workload as “not good” – it is part of the brand’s long-term business strategy.
There is already interest. Although refusing to name the specific brands, Lee said CitizenM is in talks with several “blue chip” companies as well as several startups.