Following 12 months of heavily discounted
airfares, globally competitive hotel rates and cheaper car rental
rates, corporates are now being advised to be prepared for
possible realignment in these areas.
FCm Travel Solutions executive general manager
Australia, Shannon O’Brien, said that while the second half of
2008 was about consolidating corporate travel programs and 2009 a
year for reducing costs; 2010 would see companies realigning their
procurement strategies to adjust to the changing travel
“As the world maps its recovery,
companies will need to adapt their mindset and buying behaviour if
they want to continue to achieve the best value for their travel,”
Mr O’Brien said. “We predict that 2010 will be a crucial year for
companies to reassess their procurement strategies including their
contracts with airlines and hotels to achieve maximum value in an
environment where the pendulum of power is slowly starting to
swing away from the consumer.
“During the past year
corporates have certainly held the higher ground on price
negotiation but as the pendulum begins to swing back the other
way, strategic direction from a travel management company is an
essential driver to successfully navigating the changing
While global hotel rates aren’t
predicted to rise substantially for at least another 18 months,
increasing interest in the cheapest airfares means flight bargains
are becoming harder to catch.
according to FCm, has created a corresponding increase in average
ticket prices and costs per mile for corporate travellers.
Mr O’Brien said the likelihood of higher fares and tougher
negotiating conditions meant businesses should be re-evaluating
their procurement strategies now, in preparation for 2010 and
“Many companies will be asking what they
can do now to prepare for the change in conditions during the next
12 months. To help guide companies through the core elements of
the realignment process, we have developed a priority-list of
recommendations, which can be worked through and implemented with
the help of your FCm travel manager,” he said.
These may include:
Consolidation – Make all your
bookings through one company for complete visibility. This will make it
easier to identify inefficiencies in your travel program.
Policy Tightening - Encourage travellers to book in advance,
take restricted fares where possible and use preferred suppliers
where they best suit your needs. Conduct reporting on travellers
booking outside your travel policy.
Reviewing Airline Contracts – Assess,
or get a company such as FCm to check, whether you are in a better position
staying with your existing airline deals and improving your
consolidation with that carrier to ensure volume targets are being
Opt for Best Hotel Rates -
Choose hotels that offer you the lowest rate of the day
if you can.
Benchmark Results - Continuously benchmark your travel performance and costs,
including your average ticket prices, costs per mile and hotel
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