Bonnie Smith | General Manager | FCM Travel Solutions | mail me |
Soaring flight prices, persistent inflation in South Africa, and rising hotel rates in major business hubs have yet to deter business travel. In fact, the GBTA Business Travel Outlook 2023 illustrates global business travel is expected to recover to its pre-pandemic level in 2024, a full two years earlier than anticipated.
The Q1 2024, our Trend Report noted an increase in hotel rates in Cape Town, Lagos, and Dubai compared to Q1 2023. January 2024 saw a rise in the average paid ticket price in economy class by 11% and business class by 12% compared to the same period in 2019.
Despite these challenges, savvy business travellers are finding innovative ways to cut costs. One of the most impactful strategies is airfare re-shopping, which involves automatically rebooking flights at lower prices when they become available. This proactive approach ensures that companies aren’t overpaying for airfare.
Airfare re-shopping, although not new, has become a game-changer in this economically difficult climate. With technology constantly monitoring fare changes, you can save significantly without the hassle of manual tracking. The benefits go beyond savings. Knowing you’re always paying the lowest fare provides peace of mind. You can allocate travel budgets more effectively when you’re not overspending on airfares.
Longer stays, bigger payoffs
But cost-saving measures don’t stop at airfares. A new trend towards extended hotel stays is helping companies maximise productivity and consolidate travel costs. Negotiating corporate rates can slash hotel costs by up to 35.1%, according to our data, making it a vital strategy for businesses with consistent travel patterns.
According to the Q1 2024 Quarterly Trend Report, the average hotel stay has increased to 4.4 nights, up 0.3% compared to Q1 2023. This shift reflects a strategic approach by companies to enhance return on investment by consolidating meetings into longer trips to accommodate more meetings, increasing productivity and reduce the annual business travel tab.
We noted that even for shorter domestic trips, travellers often add a few extra weekend nights to maximise their experience. Extending a stay can also unlock additional savings beyond airfare consolidation.
The longer you rent a car, the cheaper the daily rate becomes. Adding those extra days can provide significant savings.
– Judy Jacobs, Senior Account Manager at FCM
Expert guidance for optimising travel spend
Negotiating the best corporate rates for extended stays is crucial. The importance of partnering with an experienced travel management company (TMC) with extensive hotel programme negotiating expertise and data analytics capabilities is emphasised.
We leverage our clients’ total volumes globally to secure the best deals. Even if a company’s travel footprint in one city is modest, by pooling their nights across all markets, we can secure preferred rates they couldn’t get on their own.
– Jonathan Scott, Senior Account Manager at FCM
TMCs also guide clients on when to push for a special negotiated corporate rate versus taking advantage of promotional deals or pre-negotiated discounted rates. Analytics show when a company has enough consistent travel to a particular city or hotel chain to justify dedicated negotiation. But there’s an art to it as well, which is where an experienced TMC partner is invaluable.
When to negotiate rates
When does it make sense to negotiate a contracted hotel rate?
Our consulting report identifies key criteria:
- Room night volumes exceeding 100+ nights annually
- Very consistent travel patterns
- High employee satisfaction with particular hotels
For companies meeting these thresholds, the savings can be substantial. Our data shows that negotiated corporate hotel rates are currently 35.1% below the best available public rate.
Maximising every Rand
While tactics like airfare re-shopping and negotiating hotel rates have been options for years, their widespread adoption illustrates how businesses are sharpening their focus on travel spending. Every company should analyse their hotel and airfare data to identify savings opportunities.
If you have consistent travel patterns but aren’t capturing negotiated rates or re-shopping airfares, you’re leaving money on the table. Tight budgets and cost scrutiny make it essential to maximise every Rand.
