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Business Traveller

Say Farewell to Frills in Travel. We're Back to the Basics in Hotels; A Look at the Latest in Video Conferencing; Making Smaller Budgets Go Farther in Travel. Budget Conversions of Jumbo Proportions.

Aired February 14, 2009 - 13:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

RICHARD QUEST, CNN HOST: Hello, and welcome to "CNN BUSINESS TRAVELLER." I'm Richard Quest, this month reporting from Chinatown in London.

Now ideally, it would have been good to go to China itself to celebrate the new year, but these days, of course, are days of recession- cutting travel budgets, cutting costs where we can. So the year of the ox is going to be more austere than auspicious.

Coming up, it's farewell to frills on this month's show. We're back to basics, from five-star to no-star, saving money at the zero-star hotel. If you can't travel, transport yourself -- the latest in video conferencing. And budget conversions of jumbo proportions.

The great thing about a Chinese meal is don't have to spend a fortunate to have a feast and a banquet, which is all them ore important in these difficult economic times. We're still traveling, but we're doing it in different way.

This month, we're going to need some help learning about our future and our fortune. Perhaps, it's bad form to open the fortunate cookie before I've eaten the meal, but -- hand on -- we need all the help we can get. Ah, you must manage your money better in 2009.

Arms are shorter; pockets deeper. In other words, we have to make smaller budgets go a little further.

A report published by the "Economist's" Intelligence Unit, confirmed this somber mood.

JAMES WATSON, ECONOMIST'S INTELLIGENCE UNIT: One of the key factors that executives wanted from the hotels they were staying in was a good internet connection so they could log on to their business, update their e- mail and do all that kind of thing, whereas before, they might have been more concerned about, you know, is this close to a nice kind of museum that they might want to check out or, you know, is it in a good venue that maybe my family could come along too and get a good time out this. Much less interest in that right now, much more back to kind of sober productivity.

So in a sense, you know, business travel is not going to die away this year, but it's probably going to be a bit more boring.

QUEST: You must work hard in 2009. And that means more productive on the road, so travel diaries are going to look very different.

JIM MARSH, CEO, CABLE & WIRELESS: A year ago, I was probably doing two long-haul flights per month, most often to Asia, India, China, Singapore, but also to U.S., both east cost and west coast. Now, I probably travel less frequently, maybe one long haul every six weeks rather than one every two weeks.

When I travel overseas, I would have, you know, breakfast meetings, lunch meetings and dinner meetings to optimize the use of that time.

QUEST: This research was conducted by Amadeus. The M.D. of the travel booking company thinks that being seen to be frugal is just as important.

ANTOINE MEDAWAR, M.D., AMADEUS: They want to show certain visible austerity. They want to show to their boss, to there shareholders that, yes, they are flexible and they are ready to change their behavior.

QUEST: Right from the start of the year, cut costs, not corners.

According to the report, in 2009, they'll be four main cutbacks. Travel for internal meetings will be cut out all together. Booking business class will need signing off. Otherwise, it's always economy. There will be very little travel for junior members of staff. Four and five-star hotels are out. Mid-range, budget hotels are in.

Trading down doesn't just mean hotels and the class in which you fly. It's also the type of meeting.

JULIET SILVESTER, FUJIITSU: I think that's one of the things that have changed actually. There's less of an expectation that you would take clients out to dinner. Occasionally, it would happen if there's a business requirement and you can see that there are going to be real business benefits in doing that, then, yes. But on the whole, I think it's safe to say that it would be more of a meeting and a coffee and perhaps a lunch, but not necessarily something extravagant.

QUEST: For business travelers, down grading to mid-range hotels is not a problem as long as the image remains right.

ANTHONY GANJOU, BUSINESS TRAVELLER: Before, we were staying in four and five-star hotels. We're looking for the similar kind of quality and obviously a grand fit, a quirkiness that fits with what we do, but not paying as much as we were before.

QUEST: The budget sector is cashing in on this trend.

WATSON: We've seen advertisements for Travel Lodges and other budget travel hotel ranges are popping up in the "Financial Times" and the pages of the "Economist" that you probably would have been very surprised to see just a year ago, and now they're quite a regular occurrence. And I think that's kind of key indicator of the -- of the new mood within these chains and how they're going to seek to potentially grow quite aggressively and try to pick up their market share.

QUEST: With clients and customers now shifting loyalties, this is not a time for complacency. Making a few minor changes could easily keep regular customers and help attract new ones.

MEDAWAR: Why everybody uses their mobile as they do is because the telephones are expensive. So American ambitions out to be, please, the basics, give us a decent price on your telephone. Give us the water free or the soda free. Try to retain your customer. Give them more than what used to have, and give the same service for less.

QUEST: This year, you may have to think the unthinkable. I've already done that with this meal but opening my fortunate cookies early. To continue where we left off, less is more.

Nonessential trips are being substituted with video conferences. The report found that 41 percent of executives will cut back on travel using this technology. It could shave up to one-quarter of annual travel bills and buy back valuable time.

MARSH: For me personally, it saves me a lot of time, up to, I would say, at least two days a month that I'm not having -- having wasted time on an airplane. And also, it makes you more effective if you have teams working in collaboration across two (INAUDIBLE). They can meet over the video conferencing on a daily basis. And that leads to far better collaboration, far better working together, which delivers results quicker.

QUEST: With viable alternatives available, the default position has changed. That's the difference.

SILVESTER: We are really pushing the message with "Do you actually really need to do this." And in part of our travel policy, where we're talking about, you know, going overseas, the first thing in that is, "Can you do this by video conference? Can you do this by teleconference? And if not, why not"?

QUEST: If you're like me, you always thought video conferencing is a bit second class, an inferior experience. Well, in the year of the ox, we can afford no such thoughts.

So when we come back, we'll introduce you to telepresence, a form of video conferencing where we both feel we're really there, in a moment.

(COMMERCIAL BREAK)

QUEST: Welcome back to "CNN BUSINESS TRAVELLER." It's a miserable, rainy day in London. And I've got to talk to someone on the other side of the world. I could get on a plane or I could have a video conference call. One is very expensive and time consuming. The other is not a very good experience. Instead, I'm coming to this place in London where, I'm told, it will revolutionize both.

Right, so, I have no idea what's going to happen, but a vague idea of what might happen. Here we go. I have no idea of where I'm even heading to. Well, I'm here. And there is a stage I front of me.

IAN O'CONNELL, DIRECTOR, MUSION SYSTEMS, LTD.: Morning, Richard, welcome to our home.

QUEST: That's very clever.

Ian is in a studio on the other side of London. His image is coming through a fiber optic line. I need to have a look.

This is the stage. I'm here.

On stage, face to face. The effect is impressive. His image is being reflecting onto a giant foil and then onto the stage, full size, life size. Virtual handshake, not as good as the real thing. But I can interact with him as if he's really here.

O'CONNELL: It's a total immersive experience when you're facing one another. And I think that is, for us, a new way of communicating between two parties.

QUEST: How far away do you think from this technology being suitably accessible? For example, multinationals would have one in their London office, one in their New York office. How far away do you think we are from that?

O'CONNELL: I think in six months we'll have half a dozen installations. I think initially what will happen is a CEO will say, "I would love to have a room that I could hop next door from my boardroom, hop next door, do my keynote speech to a conference in Singapore and be back in time for coffee. That will be what drives it.

QUEST: At the moment, the effect of what we are doing is for the benefit for the people in front of us. I mean, I don't feel like you are in the room with me now.

That's because on stage, I can only see Ian on the television monitor, plastic smoke and mirrors. On the sofa, it all starts to feel real. It is from this viewpoint that business meetings will be conducted using this technology.

QUEST: So you can see me?

O'CONNELL: I can see you fine.

QUEST: I feel that I'm with you actually in the same room.

O'CONNELL: Yeah, yeah.

QUEST: Like many of us now, I'm -- we're using video conferencing for meetings between ourselves and my colleagues in Atlanta. Why is this better than that, do you think?

O'CONNELL: I think this has specific applications that the head-and- should stuff does not have. I'm a six-megabyte image and I could have three or four colleagues on the stage with me and we would still collectively be a six-megabyte image.

QUEST: Yes, I have to hand it to you, I mean, it is extraordinary.

O'CONNELL: Do you know feel you're talking to a video or a person?

QUEST: Oh, a person. Good question.

In fact, I'm almost expecting us to bring this to an end. I'll say thank you very much. And you'll just walk down the corridor and we'll shake hands.

(LAUGHTER)

I mean, that's how real and how much I feel that we are having a proper conversation here.

The psychology of this conferencing is crucial. You need to be in front of the hologram, not beside it.

Once I've tricked my mind, the image is real, now I can get down to business.

Video conferencing and telepresence suits definitely has a future, especially in these days of tightened budgets and concerns over the environment. But of course, we still have to get on planes to meet contacts. And when that happens, saving money is the order of the day.

Ayesha Durgahee has visited to hotels that are literally going for a song.

(BEGIN VIDEOTAPE)

BUSINESS TRAVELLER CORRESPONDENT: It sounds too good to be true -- go on line, book a room for the night and pay less than a latte.

In east London, the boutique hotel, the Hoxton, put 500 rooms up for sale on its web site for $1.50 a night. The unlucky ones got another go, with 500 rooms up for grabs. This time, at $40. It's a case of the fastest fingers first.

DAVID TAYLOR, GENERAL MANAGER, THE HOXTON: We sold out of all the rooms in 13 minutes, 7 minutes for the one-pound rooms and 13 minutes for the 29-pound rooms. And we had a staggering -- to the sum of 60,000 people trying to get those rooms. And there was a combination of bargain hunters, some of the regular customers and that sort. A few of them from U.K., the States, Italy, Norway. It was a real feeding frenzy of people looking for a bargain.

DURGAHEE: Every day, for a period of three months, five rooms are sold for $1.50, and another five for $50. You can only book one room though at a time.

The hotel first started the sale last April and now it's a quarterly event, and couldn't have come at a better time.

TAYLOR: We wanted to show that budget hotels don't need to be boring. The customers are going to expect the product to remain fresh, looking good. Everyone is finding that things are tighter for them. So when they come here, they expect us to be doing the same, delivering great service, recognizing all of our guests and actually giving them more. For example, we're introducing free phone calls for our customers calling anywhere in the U.K.

DURGAHEE: On the other side of London, in Notting Hill, three-star hotel UMI also had the same idea, offering the first night for $1.50 to frugal travelers. This time though breakfast is included.

STEVE LOWRY, GENERAL MANAGER, UMI: People couldn't quite believe it. And, you know, we had phone calls, "Is this really true"? You know, we did have people who were angry because they tried to update and it wasn't available. It's almost like putting a prize -- you get a free night -- basically, a free night's accommodation, breakfast, a nice latte in the morning. And we've had people that have enjoyed it.

The past few weeks, Tuesday and Wednesday nights have been our busiest, which shows there is a shift from the leisure to the business traveler.

DURGAHEE: On 31 out of the 117 rooms were in the sale, so no wonder there was a lot of disappoint. Fifty percent of bookings thought were business travelers, and 20 percent f them extended their stay.

Anthony Ganjou was one of the lucky ones.

GANJOU: It's obviously a great deal for what you're paying. And it does allow you to pick up the bill where you may have been a bit more conscious of picking up the bill, especially if you're meeting a client in a high-end establishment that you know is charging ridiculous amounts for coffee and tea to start. So it's great. It puts you in a position where you can spend more on collateral things that you'd be otherwise be very mindful of, especially in this kind of climate.

DURGAHEE: There's no mistaking that this is a marketing gimmick to keep occupancy rates up during times of austerity.

While these hotels are putting themselves on the map, they're also putting money back in our pockets.

(END VIDEOTAPE)

QUEST: After the break, budget doesn't have to be boring. We show you creative conversions from Switzerland and Sweden.

(COMMERCIAL BREAK)

QUEST: Welcome back to "CNN BUSINESS TRAVELLER." Over the years, I've shown you many different types of overnight accommodations. But we've never shown you anything quite like this. The Null Stern Hotel, zero staff, in Switzerland. This is different.

Underground in this Cold War nuclear bunker, no frills takes on a whole new meaning. For $9 a night, you get a bed, hot water bottle and a room with no view. And there's no heating, limited hot water and breakfast is not included. It's not the lap of luxury. And that's the point for the artists, Frank and Patrik Riklin.

FRANK RIKLIN, ARTIST: Actually, we try to keep the angst of the general megalomania of this time (ph). For example, it's also the entrepreneurs (INAUDIBLE) of the Atlantis (INAUDIBLE).

QUEST: For the brothers, the Null Stern Hotel was nothing more than a concept, an art installation.

For the businessman, Daniel Charbonnier, it was a real hotel and a business opportunity.

DANIEL CHARBONNIER, MD, MINDS IN MOTION: It gave me the vision. If they have -- they have almost showed me what I have been looking for all my life, which is the essence of hospitality. They have showed me like the life of the essence of the hospitality business, which is that you can make a guest happy with just people taking care of other people without anything else around, the flat screen and the big Jacuzzi, everything that is just on top of it.

QUEST: It's obviously a great gimmick. But why on earth would anyone want to stay here?

RITA MAYER-ZIEGLER, TRAIL GUEST: It wasn't very warm. You could hear the air ventilation system. But the experience of staying overnight with so many people in one room was great.

QUEST: Guests can share in standard class.

But you will actually have people sleeping like this.

RIKLIN: Yes, yes, all together.

QUEST: Or a great tiller luxury suit for just a couple of dollars more.

Null Stern doesn't open until April and already 1,000 bookings have been made.

The irony is, with their art becoming commercial, the brothers' zero- star concept may well end up adding zeros to their own balance sheet.

PATRIK RIKLIN, ARTIST: We couldn't make this idea if we are interesting in only money. But if the art can show something for the economic -- for the business world, then it would be also interesting for us as artists.

QUEST: The Null Stern, many meters below ground, but one thing is for sure, you won't be having to dig deep to stay here.

Making new use of buildings, converting them into hotels seems such an obvious idea. There are many more you can think of. Adrian Finighan explains.

(BEGIN VIDEOTAPE)

ADRIAN FINIGHAN, BUSINESS TRAVELLER CORRESPONDENT: When most people fall asleep on a plane, they wake up thousands of miles from home. On board this 747 however, they wake up in exactly the same place. Welcome to the Jumbo Hostel, a plane that once carried passengers to the skies and is now accommodating them on the ground at Stockholm's Arlander Airport. This former Singapore Airlines and Pan Am jet may well have ended up like this, moth-balled in the desert sun. But entrepreneur Oscar Dios spotting an opportunity to breathe life into the carcass and create a hotel with a difference.

(on camera): What sort of condition was it when you got it?

OSCAR DIOS, GENERAL MANAGER, JUMBO HOSTAL: Very warn out. And it's been standing still for 60 years, so it's -- the further back in the plane you came, the more mold on the chairs. And in the interior, the carpet was just ruined.

FINIGHAN: I love the touches that you've kept here, I mean, the original features. That's a really nice thing to do.

DIOS: Yeah, I mean, you had one whole plane, and we just wanted to keep as much a possible. Of course, that's not really feasible downstairs. But up here, we could really actually keep it more or less like a museum.

FINIGHAN (voice-over): The most coveted and expensive room in the hotel lies behind door 747, the cockpit. Tonight however, I'll be sleeping in economy.

738, let's go take a look at my room. Oh, fantastic. Comfortable bed. Three of them in here. Look at my wardrobe, one of the original overhead lockers. I want a great view, right onto the wing.

Now, for most people, when the plane touches down, it's a race to the exit at a final destination. Not so here.

THOMAS CASSEL, COMMERCIAL MANAGER, ARLANDA AIRPORT: That's interesting because you normally say that traveling, you don't travel to an airport. You travel to a destination and the destination is to a region or to the city or whatever it is. But actually, we have activities at this airport that can be -- the effort is a destination soon. So this is more than staying at the hotel room. It's an activity in itself.

FINIGHAN: At a cost of $160 a night for a standard room, the hostel is proving to be a hit with business travelers on a budget.

FREDDY HARTONO, BUSINESS TRAVELLER: It gives you a better value and certainly cheaper than most hotels out there.

Having -- just look at the cockpit. Spend a couple of minutes taking pictures of it. It certainly looks very -- I've never been to the cockpit before so it's my first experience. It's amazing.

FINIGHAN: And it's the small touches that make the Jumbo Hostel experience so unique.

Good morning.

Adelaide, good morning. Breakfast.

ADELAIDE, WAITRESS: Here you go.

FINIGHAN: Thank you very much indeed.

Well, I'm on board a plane. And as you'd expect, it's an in-flight meal, and a very hearty breakfast it looks too. If you ride here in the evening, you can also have a hot in-flight meal. Now then, I'm starving.

Jumbo in size, but budget in costs. It may never take to the skies again, but in the current financial climate, business for this old bird will surely be flying high.

(END VIDEOTAPE)

QUEST: All this saving money, who knows where we'll all end up staying.

And that's "CNN BUSINESS TRAVELLER" for this month. I'm Richard Quest, at the Null Stern in Switzerland.

Wherever your travels may take you, I hope it's profitable. And I'll see you next month. I think. If I every get out of here. Hello? Hello? Concierge?

END