In April, Silver Spring management consultant Yvonne Braxton stopped driving her 1989 Acura Legend on trips to Pennsylvania, New York and New Jersey. The standard 37.5 cents per mile government reimbursement -- a figure set for 2004 long before gas prices began soaring -- didn't come close to covering her costs anymore.
Braxton said she doesn't plan to drive her own car on business until the price falls below $1.50 a gallon. Instead, she'll rent a car under her company's corporate contract, which locks in much lower fuel costs than she'd pay on her own. She doesn't pay out of her own pocket to drive, and the company just passes the cost on to clients.
"As long as we have a reasonable rate, it behooves us to just go ahead and rent a car," Braxton said. "It just makes more economic sense."
Richard Broome, a spokesman for Hertz, said the company has seen "double-digit" growth in the number of corporate-rate rentals during the past two months. In fact, Broome said Hertz is experiencing its largest boom in rentals since the weeks following the Sept. 11, 2001, terrorist attacks. At that time, many business travelers were avoiding planes for security reasons and instead renting cars for shorter trips.
Just as the government mileage reimbursement is locked in for a period of time, so are rental car rates under corporate contracts. And with the big change in gas prices, renting a car now can be a significantly better deal for business travelers.
In a recent survey of 140 members of the Association of Corporate Travel Executives, 67 percent said they had already negotiated fuel prices with the rental companies before the increases took place.
Higher Fares Don't Fly: For at least the fifth time this year, the airlines have backed off on an attempt to raise fares, fearful that passengers wouldn't pay them.
This time, Continental Airlines attempted to add $10 each way on flights less than 1,000 miles and $20 each way on longer ones. It was the third attempt by Continental alone since April to raise fares. Late last month, United Airlines tried to add a $5 fuel surcharge on each flight leg, but backed off the increase within a week.
In an industry where customers can find the lowest price with a click of the mouse, no one wants to be stuck pricing the same product higher than their competitors. So, unless all the major airlines go along with a fare hike, they generally all back off.
Yet this may be as good an opportunity the airlines have had to raise prices in quite some time. Many frequent travelers can relate to the airlines' desire to recoup their soaring fuel costs.
Washington frequent flier David Biderman said paying as much as $20 more each way wouldn't cause him to fly a cheaper airline, all other things being equal.
"Of course I sympathize with the airlines paying higher fuel bills. After all, I am doing the same at the gas station," said Biderman, who is general counsel for the Environmental Industries Association.
Fairfax software technician Kate Schwarz said she was glad that the airlines were honest enough to reveal the reasons behind their price increase "instead of trying to hide them or disguise them as something else."
Dan Gallagher of McLean said airlines should increase ticket prices on the cheaper, advanced-purchase tickets, not on the last-minute tickets that business travelers often purchase that are more expensive.
"They should not nickel-and-dime the higher-fare-paying business customers like myself," he said.
Minneapolis-based fare expert Terry Trippler said he expects the airlines to try to raise fares again, possibly within another week. He said fares remain at historically low levels, another reason airlines continue to lose money despite filling high percentages of available seats.
Use 'em or Lose 'em: For the first time since Hilton created its frequent stay honors program in 1987, the hotel chain has sent out letters this year alerting members with inactive accounts to stay at a Hilton property or use a Hilton co-branded charge card or their account will be terminated.
Mary Jackson received one of those letters. The frequent business traveler and senior director for the Association of Research Libraries in Washington hasn't stayed at a Hilton since March 2003.
But Jackson has been a member of Hilton's program since it began. With nearly 41,000 Hilton points, she could redeem her points for a free weekend stay at Hilton's famed Waldorf-Astoria in New York. Jackson said she understands why Hilton wants to drop her, but she said she was disappointed that the chain would end her relationship since she has been with program since its inception.
Hilton says it sent the letters to streamline its program and reduce the financial liability. Just as airlines carry millions of dollars in liabilities on their balance sheets for outstanding frequent flier miles, so do hotels with their frequent guest points.
"Some value has to be placed on these points. They can either stay with the program and keep their account alive or redeem their points and go away," said Cindy Baker, vice president of Hilton's frequent guest program, which has 13 million members.
Hilton seems to be the only major chain trying to shake off its dead weight. Spokespersons for Marriott and Hyatt said that while they could terminate inactive members under their agreements, they have never sent out such a letter and have no plans to do so.