Air and hotel fare hikes expected in 2019 worry travel managers
The generalized increase in the prices of air transport and accommodation around the world, and particularly in Spain, anticipated by some international reports, worries corporate travel managers, as has become clear in the sessions of Forum Business Travel held in October in Madrid and Barcelona. The generalization of the so-called dynamic fares also opens up new challenges in terms of negotiating with suppliers.
Travel managers gathered by Forum Business Travel cannot hide their concern about rising air and hotel fares. According to some international reports, such as the one recently published by the Global Business Travel Association (GBTA), next year the price of airline tickets will rise by 2.6% worldwide, 4.8% in Western Europe and 6.7% in Spain. The price of accommodation will also rise in Spain above the average, specifically by 8.5%, compared to 5.6% in the EU or 3.7% globally. The land transport will hardly suffer variation in 2019.
Against this situation, corporate travel managers are “concerned”, as stated Marian Caturla, global travel manager at Prosegur, or Cristina Badia, services technician at Abertis, two of the speakers at the sessions held by Forum Business Travel in Madrid and Barcelona, with the participation of more than a hundred travel managers. This situation is further complicated by the widespread use of dynamic rates, which suppliers use to vary prices in real time according to demand.
The questions are in the air: “??Is it worth negotiating fares with airlines if there is no chance they will be honored due to market fluctuations? “, wondered Óscar García, founding partner of Forum Business Travel, to the attendees. Among other difficulties, corporate travel managers find that “conditions vary according to the booking channel and in many cases do not include fees or complementary services”, the so-called ancillaries.
The hotel chapter also raises serious questions. As underlined by Óscar García, “it is increasingly difficult to know what the total price of a room is, because rates are broken down, a trend that complicates comparison with previous years and the setting of savings targets”. In addition, the yield management policy being imposed by the chains in all their distribution channels prevents companies from benefiting from their negotiated rates on many occasions.
With regard to the relationship with travel suppliers, Marian Caturla recommends “periodically reviewing the travel program to propose the relevant changes”. This requires companies to make a technological effort to improve their analysis tools, especially the activity data provided by travel agencies and payment methods. Another suggestion from Prosegur's travel manager is to "involve employees and encourage their cooperation in complying with the travel policy, without this undermining the quality of their trips."
The Forum Business Travel sessions in Madrid and Barcelona have also analyzed the Business Travel sector forecasts for the coming years. Despite the slowdown in the economy, corporate spending on business travel will increase by around 5% each year on average worldwide until 2022, according to GBTA. After an expected 7.1% increase by the end of 2018, there will be moderation in subsequent years, with a 4.9% increase next year, 4.7% in 2020, 4.3% in 2021 and 5% in 2022.