preferred rate on a frequent basis. This also underscores the importance of auditing best available rates and comparing them to preferred rates on a regular basis, to validate the competitiveness of a preferred rate throughout the year.”
“These fluctuating rates sometimes work in favour of corporate buyers and sometimes the opposite”
following, which will have repercussions for corporate travel procurement over the next few years – particularly with the wave of consolidation within the hotel sector, including Marriott’s acquisition of Starwood and other moves, such as Accor’s purchase of Fairmont Raffles Hotels International.
“These fluctuating rates sometimes work
in favour of corporate buyers and some- times the opposite,” says Marwan Batrouni, senior director at BCD Travel’s research arm Advito. “This could potentially undermine the power of a preferred programme if the dynamic rate is lower than a negotiated
IS THE PRICE RIGHT? In any case, there is evidence to suggest that companies are not always getting access to their negotiated rates with hotels. Research by hotel booking specialist HRS and the Global Business Travel Association (GBTA) found that around 25 per cent of negotiated rates were listed incorrectly on systems or did not include the agreed hotel services, while 11 per cent of the prices analysed were higher than the rate negotiated between the corporate client and the hotel. Major hotel chains are also increasingly
targeting individual travellers to encourage them to book directly through their websites rather than managed travel channels, which could further weaken the effectiveness of negotiated deals. “While the direct marketing is an irritant,
as travellers aren’t aware of the different inclusions in the rate and that the price isn’t like-for-like, it is currently having a minimal impact,” says one UK-based buyer. Of course, dynamic pricing can also have its advantages for buyers due to the potential
2020 Vision: the future of pricing
What major changes will we see in travel procurement by the end of the decade?
“Procurement will have to find more creative and traveller-centric ways to produce savings in the future. There will be more emphasis on savings including ancillaries, booking fees and credit card fees rather than focusing on the ticket or room price alone. This will only be achieved by true collaboration between the buyer and supplier. Dynamic pricing will not necessarily replace but work alongside and complement traditional pricing models.” ITM travel buyer member
64 BBT May/June 2017
“Corporate travel technology will need to keep up with the retail market in order to manage travellers’ expectations to book in programme. We will see technology developing that alerts travellers if they are making incorrect decisions. This will drive decision-making at point-of-booking, providing travellers with guidelines to book within policy.” Peter Snowdon, multinational account manager, FCM
“Our prediction is that dynamic programme management and traveller
engagement using new tools and technology will be the biggest change. Constant monitoring of the performance of a hotel programme, as well as the performance of preferred hotel suppliers – through constant audits – will level the playing field. This will allow corporate buyers to hold suppliers accountable to their commitments.” Marwan Batrouni, senior director, Advito
“The landscape will become even more complex. Dynamic pricing is becoming
a mature science, but heavy supplier investment in direct channels will bring fresh procurement challenges if they continue to see the traveller as an individual, rather than a member of a corporate programme. As travel elements become
more commoditised, we see adoption of US-style bundled pricing – for example, economy class with seat pre-allocation and lounge access – gaining hold in the UK corporate market.” Adrian Williams, marketing and partnership director, Business Travel Direct
BUYINGBUSINESSTRAVEL.COM
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