From flight upgrades to limos, airlines and hotels are becoming more creative to reward loyalty as company budgets tighten

The economic slump has had a natural impact on business travel. Figures for January 2009 saw a 20 per cent decrease in activity from the previous year. As Jacob Fonderson, director of business concierge company BCS Universal, says: "Business people will always have to travel to some extent, but we have seen a fall-off in the number of ad-hoc trips." And he adds that trips have become shorter. "Where people would go for three days of business and then stay longer for a leisure break, they now want things more compressed and more tightly organised." His firm offers travellers a PA service in the country they are visiting, and he says that this has been a popular service on shorter trips.

But is this necessarily bad news for travellers? A surge in hotel building in recent years has created an excess of room supply and with demand slowing that is now forcing prices down. Robert Cook, chief executive of UK chains Hotel du Vin and Malmaison, admits that demand is "noticeably tighter". He says that while his company has maintained occupancy rates, this has only been achieved by being "extremely flexible" on price.

His advice to directors is to plan ahead and go direct to hotel websites for the best deals. "We have to be flexible and play different games. But most of the best offers are available directly through our website," he says.

Peter Muller, UK country manager at travel management company ATP, agrees that the market is slow, but he questions whether in tough times directors in small firms should be seeking the best flight deals themselves. "Surely they should focus on running the business," he says.

But business travel providers compete on more than price. Directors can often now get upgrades or additional services for free that might have been denied them in the past.

Paul Liczbinski, sales and marketing director at the new St James's Hotel in central London, says: "We've had the double challenge because we've launched a new hotel at a bad time. We are thinking differently about services we offer. We have to listen more to what clients want. We've added different elements, including a chauffeured limousine service from the airport."

Despite slack demand, directors can cut costs by planning in advance. More providers are adopting the airline model of demand-based pricing; the more people who book into a hotel or on to a flight, the more expensive it gets. This means that booking late often leads to more expense.

More than ever, emphasis is being placed on loyalty. Whether through extra services or flight upgrades, providers are keen to reward loyal clients. As always, it pays to ask. As Liczbinski says: "We'll do whatever we can to retain customers once they've offered us their support."

Secrets of the savvy traveller

1. Plan ahead and book early There are fewer last-minute deals. The best are available for those prepared to reserve on a non-refundable and non-flexible basis in advance.

2. Go direct to providers If you are booking your own travel, start with hotel and airline websites, which often list the most attractive offers.

3. Consider a specialist It may be worth employing a travel management company (TMC), rather than booking yourself. TMCs save money through bulk discounts and even after commission may still be cheaper. They can also offer services such as automated expense management.

4. Choose carefully As a small firm, make sure you use a TMC that takes your business seriously and is willing to make the effort for you.

5. Shop around If you don't employ a TMC, take your time to look for the best deals.

6. Ask for more Don't be afraid to ask for an upgrade or extra services. The more you travel, the better your bargaining position will be.