Thursday, April 21, 2016

What did business travelers prefer in 1Q16?

Ride-hailing over rental cars, Starbucks over Subway, Hampton Inn over Hilton


A report by travel and expense management software provider Certify shows that ride-hailing services, which passed taxis in 2Q15, continues to widen the gap as the most popular form of business transportation.

A special addendum to the Certify SpendSmart report for the first quarter of 2016 (1Q16) showed that ride-hailing services accounted for 46 percent of total paid rides nationally. Car rentals, which accounted for 55 percent of paid rides in 1Q14, now only command 40 percent of the market, while the taxicab category, which includes traditional taxicabs, limousines and shuttles, has dropped to 14 percent of paid rides.

The Certify SpendSmart report, which is issued quarterly, tracks spending across major categories such as food, airlines, lodging and car rentals and highlights top vendors for business travelers using data from millions of business expense receipts processed using Certify.

The report also lists the hotel chains, restaurant chains, car rental companies and airlines that are most frequently expensed, the average amount of those expenses, and the ratings of the service providers.

Overall, Southwest Airlines (NYSE:LUV) gained 0.1 points from the 4Q15 survey and moved into a tie for the he top spot with 4.5 out of a possible five points as the airline rated best by those who filed expense reports. JetBlue, which was alone at No. 1 in 4Q15, also earned an average rating of 4.5 stars. Alaska Airlines (NYSE:ALK) dropped 0.2 points to 4.2 stars to tie for second place with Delta Air Lines (NYSE:DAL). American Airlines (NASDAQ:AAL) was fifth at 3.8 points.

Despite their proclaimed preferences, Delta was the airline with the most frequent expense submissions. Business travelers expensed tickets for Delta 21.56 percent of the time, American Airlines 19.84 percent of the time, Southwest 14.77 percent, United 13.39 percent of the time and jetBlue a mere 1.44 percent of the time.

Hotel chains reflected a similar disconnect. While travelers' ratings saw Embassy Suites, Hilton, Homewood Suites and Residence Inn tied for top-rated with each garnering 4.3 of a possible five points, Embassy Suites, Homewood Suites and Residence Inn were each expensed less than 2.0 percent of the time. Only Hilton was in the Top 10 most expensed hotels. It was No. 6, expensed 4.14 percent of the time.

Hampton Inn was the most expensed, showing up on 9.05 percent of expense reports. Marriott Hotels (NASDAQ:MAR) were second at 8.98 percent and Courtyard by Marriott was third at 7.22 percent. Hilton Garden Inn was fourth most popular at 4.73 percent, and Holiday Inn Express rounded out the opt five, expensed on 4.42 percent of reports.

When it comes to eating while on the road, travelers seem to be sticking with well-established patterns. Starbucks (NASDAQ:SBUX) continues to be the most frequently expensed, followed by McDonald’s (NYSE:MCD), Panera Bread (NASDAQ:PNRA), Subway and Dunkin’ Donuts (NASDAQ:DNKN).

Interestingly, the restaurants patronized most often do not strictly align with those travelers rated highest. While the most frequently expensed, Starbucks tied for third in the category of top-rated restaurants. Chick-Fil-A was rated best at 4.5 out of a possible 5 stars by travelers but ranked sixth most expensed restaurant chain. Panera Bread was ranked second at 4.3 followed by Starbucks at 4.2. Perhaps owing to its recent troubles, Chipotle (NYSE:CMG) also earned 4.2 points, dropping it to the No. 4 most-favored position from No. 2 in the previous quarter. However, despite ranking well in travelers' ratings, it was expensed only 0.45 percent of the time.

Starbucks continues to be the restaurant most frequently expensed for breakfast and has 16.58 percent of expense entries for the morning meal while Subway is the most expensed for lunch at 3.46 percent, the same percentage as in the 4Q15 report. McDonald’s was the most expensed for dinner at 1.86 percent. In all, the percentages for the top 15 most frequently visited restaurants total less than 20 percent, possibly indicating that a significant majority of business travelers eat at restaurants that are either stand-alone operations or part of very small or local chains.

Buffalo Wild Wings (NASDAQ:BWLD), which was the No. 15 most frequently expensed restaurant, returned the highest average cost, at $41.99. Panera Bread had the second highest expense level at $41.14, followed by Jimmy John's ($38.08), Applebee's ($37.37) and Chili's ($34.53). Applebee's is owned by DineEquity Inc. (NYSE:DIN), while Chili's is owned by Brinker International (NASDAQ:EAT).

When it comes to renting a car, the “most expensed” and “top rated” lists are in closer sync. In the first quarter, National Car Rental was the most expensed and the travelers’ favorite while Enterprise was the second favorite and second most frequently expensed. Avis and Hertz (NYSE:HTZ) were the third and fourth highest rates favorite, respectively, and the fourth and third most frequently expensed. Budget was both fifth favorite and fifth most expensed. All of the rental car companies except Hertz are operated by Enterprise Holdings, which is privately held.

Visit my main page at TheTravelPro.us for more news, reviews, and personal observations on the world of upmarket travel.



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