Business need tighten travel policies

Posted by Derek Hodd on 13th November, 2009. Travel.

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Leading travel managment company, FCm Travel Solutions, says business travellers need to review and tighten travel policies to keep costs down during the fragile path to economic recovery.

Corporates in the UK will also continue to hold the whip hand for the foreseeable future in terms of expecting lower air fare and hotel rates, they say.

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.

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.

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.”

However, 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,” stated 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.”