For some business observers the Christmas turkey was barely cold before pessimistic predictions started going into print about 2016. With international threats to security and an unsure outlook for global financial markets, businesses at home and abroad are starting to tighten their belts in preparation for a potentially rough ride over the next 12 months. For businesses who engage in corporate travel abroad, the imperative to cut travel costs collides head-on with rising prices across the industry.
The stark truth is that hotel prices and airline fares are rising at a faster rate than travel budgets are expanding. This is a shock to many, as last year there was a great expectation of airfares falling as a result of rock bottom oil prices. So, how are businesses responding to these challenges and is there a way to cut travel costs despite the prospect of rising prices?
Online travel bookings
The trend for businesses using Online Travel Agencies (OTA’s) to book their corporate travel online is increasing as business travellers look for the best deal on comparison sites. According to buyingbusinesstravel.com, 53% of bookings are now made online through OTA’s, rather than directly through a supplier’s website.
However, recent concerns over GDS content, especially in regard to its lack of transparency and the impact of paper content on the validity of listings, is making more businesses look towards more traditional business travel agencies. The fact remains that many people – nearly half of those surveyed – prefer dealing with a human being when arranging their corporate travel. There are sound reasons for this, relying on the contacts and industry expertise of a corporate travel specialist is a good way for you to save money on your business travel – potentially more so than relying on anonymous GDS algorithm. Business travel agencies offer more flexibility, a wider range of options and more down-to-earth advice than you would get from an OTA.
Value versus low-cost
A possibly ironic result of rising hotel costs is a decline in bookings for budget hotels. Again according to buyingbusinesstravel.com, for three quarters of travellers, budget hotels account for less than 25% of bookings. Why is this? We suggest that the most important factor when budgets are tight is not how cheap something is, but the value for money it offers. When every penny counts, companies are likely to spend more money on better quality travel arrangements than they are to throw their budget away on dubious discounts. So the key question for business travellers is ‘how can I get the best deal’ and not ‘how can I travel on the cheap’
The benefits of a Corporate Travel Agency
When times are uncertain, the temptation is either to cut back on your travel budget or to look for the cheapest options but this is often false economy. The continued success of our economy in the coming year depends on businesses continuing to travel, to build new deals and develop relationships with business partners abroad.
The people best placed to help businesses get the best deals on corporate travel are business travel agencies. Over many years, companies such as UNIGLOBE have established personal links with thousands of different suppliers, airlines and hotels, putting us in a great place to help businesses save real money and gain real value from their travel arrangements.
