Data trends • By Amon Cohen


dropped, pointing to the Airbnb effect. “Rates are going down year-on-year as corporates embrace the new approaches to booking home residences as lodging options,” says head of EMEA commercial cards, Melissa Gargagliano. Not all spend put through cards is for


travel. There is also the ‘E’ in T&E, and other transactions besides, which have led to two card companies seeing different results for their overall average spend per transaction, or average transaction value (ATV), to use the industry jargon. Amex says its ATV for small and medium clients has risen because they are increasingly routing high-value, non-T&E purchases (like materials) through their corporate cards. In contrast, ATV has fallen for Visa because contactless card payments are increasingly taking the place of cash for low-value transactions. “If you take those out, there was a small element of ATV growth,” says Visa’s Thompson. One category where Visa has particu- larly seen cards replacing cash is ground transportation. Companies like Uber only accept payment by card, and all licensed black London taxis will be required to take plastic from October this year.


FURTHER SAVINGS As always, this year’s crop of payments data also provides some clues where travel managers could find further savings to their travel budgets. For example, although only 5 per cent of air tickets bought through Airplus are in business class, that figure jumps to 38 per cent of tickets on long-haul flights. Business class flights account for 64 per cent of total long-haul spend, showing what a significant cost they are.


Another opportunity lies in advance


purchase of air tickets. Generally, fares rise closer to departure. The average number of days tickets are bought before depar- ture through Airplus is 20.6. A sizeable 11 per cent are bought 0-2 days before departure and another 27 per cent 3-7 days in advance. Reducing those figures could produce sizeable savings. There is the same potential for


hotels, where travel managers appear to be making headway. Virtual payment specialist Conferma reports the average time a booking was made


In association with


“The business travel market is tightening its belt and maybe switching to more economical options”


WHEN DO BUSINESS TRAVELERS


FLY? This chart shows which month UK customers of Airplus International fly their outbound journeys, as a percentage of all air tickets booked in 2015. Since almost no one flies for business between Christmas and New Year, it is unsurprising the lowest proportion of ticket sales is in December. August would clearly be a good month to fly in premium cabins.


January February March April May June July


August


September October


November December


8%


8.2% 9.9% 8.1% 8.2% 10% 7.4% 5.8%


10.2% 9.2% 9.5% 5.5%


Curiously, when people fly is affected by where they fly. The most popular months for domestic flights are March and June (both 9.9 per cent); for continental flights it is September (10.8 per cent); and for long-haul November (10.5 per cent).


Source: Airplus International, 2015


before check-in extended from 17 days in 2014 to 18 days in 2015. “The trend indicates corporates are continu- ing to drive smarter booking,” says chief executive Simon Barker. Another major hotel savings opportunity is to cut down on last-minute cancellations, for which more properties are charging higher fees. According to Conferma, average cancellation fees jumped 9 per cent to £113 last year. But there is better news on the gap between the cost of a reserva- tion at time of booking through one of Conferma’s virtual cards and the final billed value. “The difference dropped to an all-time low of 4.8 per cent, indicat- ing that corporates are adopting more prescriptive and precise controls on card spend,” Barker says.˜


UK BUSINESS TRAVEL AIR SPEND BY


NUMBERS AVERAGE TICKET PRICE All


UK domestic Continental Long-haul Economy


Premium economy Business First


PERCENTAGE OF TICKETS UK domestic Continental Long-haul


Economy


£529 £192 £312


£2,095 £328


£1,709 £2,976 £4,439


11% 37% 52%


93% (59% of spend)


Premium economy 1% (5% of spend) Business First


Source: Average of all air tickets booked by UK customers of Airplus International, 2015


5% (35% of spend) 0.1% (1% of spend)


BBT CORPORATE CARDS SUPPLEMENT 2016 25


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