04 November 2009

Business travel policies still need tightening

Business travellers need to review and tighten travel policies to keep costs down during the fragile path to economic recovery, according to a leading travel management company.

Corporates in the UK will also continue to hold the higher ground for the foreseeable future in terms of expecting lower air fare and hotel rates, says FCm Travel Solutions.

The agency is encouraging travellers to book early for the best fares, take restricted rates where possible, use preferred suppliers - but only if they suit a client’s needs - and consider premium economy instead of business class.

The TMC is continuing to renegotiate corporate hotel rates and consolidate hotel programmes into a ‘bed bank’ in order to drive volume and savings from fewer hotels.

It is working closely with travel managers to place a greater focus on reporting travellers or bookers who act outside policy, or those generating the highest volume of missed savings.

FCm is continuing to see a US-lead transition towards use of online travel and expense tools such as Concur’s Cliqbook, as clients seek to capitalise on lower transaction fees and per trip processing costs.

Corporates are also instructing FCm consultants to decline booking requests for point to point travel offline, forcing the user to book online.

Account management director Alex Cousins said: "Key economic indicators are pointing to green shoots of recovery in the UK, but it is still very early days in terms of seeing any significant changes in how this affects corporate travel buyer behaviour.

"Mandatory travel policy is a reality, not an urban myth. There is a greater focus on booking at least 14 days in advance, and more emphasis on exception reporting with questions being asked. Procurement departments are in fact declining any travel expenses not booked via FCm.

"Airlines continue to flood the market with cheap fares and we have noticed average ticket prices is coming down by up to seven per cent closer to departure compared to the same class of travel in 2008.

"Our industrial clients remain fixed on obtaining the lowest cost per journey, for example, and are migrating even further to low cost carriers."

But London hotel room nights are holding up well with some properties being "very bullish" and refusing to drop rates.

Clients are therefore being equally bullish and moving business to alternative properties where they are guaranteed greater savings, according to the TMC.

"Most hotels are willing to renegotiate corporate rates and discounts of eight to ten per cent year on year can be achieved relatively easy," explains Alex Cousins.

"Generally, however, hotels are sensitive to maintaining and even increasing market share. We are receiving numerous enquiries from hotels asking to be accepted on programmes."

by Phil Davies

Post your comment

Your Comments (1)

Its time to get creative!

Buyers with a mature travel programme will have already done most of what is mentioned in this article. The next step is to get creative and look at alternative solutions to the standard ones that have traditionally been offered. This is the only way that the typical bundled fee structures will be unravelled and unnecessary hidden cost will be removed from the convoluted remuneration flow in this industry. This is the hot topic that our customers are asking advice about at the moment. www.bouda.co.uk

By Clare Murphy, Thursday, November 5, 2009