FCm advises Corporate Travellers On Best Way Forward

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 environment.

“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 conditions.”

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.

This activity, 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 beyond.

“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 met.

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 rates.

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