Travel companies are ready to make a deal – The Globe and Mail
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Teleconferencing hasn’t changed business travel. What has changed is how far airlines and travel companies will bend over backwards to entice business travellers. It’s something companies can use to their advantage in many ways.
Specially negotiated deals
Business people sitting comfortably in first class and having access to special airport lounges are only the tip of the iceberg. The real perks take place in meetings held far from the airport.
These are where an airline representative sits down with a travel consultant such as Vicky Zaltsman, executive president of Toronto-based YYZ Travel Group and one of her frequent-flying clients to negotiate special deals.
For instance, Air Canada gives special treatment to companies spending $300,000 or more annually on travel with the airline, including carriers in the Star Alliance to which it belongs, Ms. Zaltsman said. WestJet and numerous other airlines, and other multi-airline alliances, offer similar special deals for frequent-flying corporate travellers.
“It’s a three-way communication,” Ms. Zaltsman said. The airline, the travel consultant and the corporate client will meet annually, at a minimum, to discuss discounts. Flights between the United States and Canada, for instance, are often discounted up to 10 per cent, and international flights even more, Ms. Zaltsman said. “And if it’s business class, they get even greater discounts because they [the airlines] would like to push business class.”
Smaller businesses with tighter travel budgets typically won’t have this level of direct negotiation, but they can use corporate rewards programs, in which companies get discounts whenever their spending hits certain tiers. The greater the spending, the larger the discount.
Buying in bulk
Another option are corporate flight passes, allowing companies to buy tickets in bulk. They are similar to a bus pass allowing a specified number of one-way trips, and there are different passes for short-haul and long-haul flights, local and international distances, and for the level of service (from regular coach to business class).
A pass could be designated for 10 trips between Toronto and Montreal, say, or for six trips between Western Canadian cities and Asia. The trick is deciding when to use the pass and when to pay the fare.
If the carrier is having a seat sale, it may be better to save the pass for trips when fares are higher. It depends on how much the pass breaks down in terms of the cost of each individual trip.
“What we are finding this year, in particular, is that more pass purchases are happening. That seems to be a bit of a trend, that buying in bulk has better value for most corporations,” said Sherry Saunders, senior vice-president and general manager of Canada for the travel booking company Carlson Wagonlit Travel in Toronto.
The sharing economy
Just as airlines, along with hotel chains and car-rental companies, are offering discounts and business perks, so are sharing-economy companies such as Uber and Airbnb.
“We are continuing to watch that space closely,” Ms. Saunders said. These companies are increasingly entering the business-travel market, but she added that companies have to answer whether “this is the right fit for you as a company.”
Using Uber could mean not taking advantage of larger corporate deals that rental-car companies may offer. Or using Airbnb could undermine hotel deals.
Yet, Ms. Saunders noted that Airbnb is offering more hotel-style apartments for rent. Less like the personal accommodations usually available through the company, they are apartments that feel more like well-appointed hotels in condominium towers more conveniently located for business people. However, there is still the risk of an Airbnb accommodation being too far from restaurants, regular taxi routes or other services, and the question of how safe an employee feels staying there.
“There are a number of things that corporations would really have to consider: Does this work in your travel culture to incorporate something like Airbnb in your corporate program? And then, what impact does that have on watering down the spend that you could give to a traditional hotel supplier, who is prepared to give you a discount?” Ms. Saunders said.
“We’ve done some of our own studies that would suggest that Airbnb can be less expensive. But that’s only one component that a corporation needs to consider,” she said.
For all the deals and overtures from travel companies and airlines, businesses are finding that travel savings are mainly coming from within, from changing the habits of their own employees. It can be difficult. Tightening travel budgets and scrutinizing expenses only go so far.
Negotiated travel discounts have little effect if employees are still booking their own travel, said Ms. Zaltsman at YYZ Travel Group. And yet, regular business travellers have their idiosyncrasies. These aren’t just about comfort. They are about doing their job more effectively on the road.
“Getting a deal is the easier part of managing your program. The part that corporations are now spending much more of their time on is managing behaviour,” Ms. Saunders at Carlson Wagonlit said. “It’s great to have a deal. But if you never use the deal, then the deal has no value.”
A different approach rather than mandating that employees use a preferred travel company is to open communication between all parties, to try to make sure employees’ needs are met by the preferred company.
Carlson Wagonlit will send an e-mail to a client’s employee if he or she hasn’t booked with the preferred company, but it’s gently worded, in the language of the company, noting the benefits of the other company.
“So you can take more of a carrot approach, as opposed to the stick approach, to say, ‘By the way, we would really like you to support the preferred program, and here’s why it’s good for you as a traveller, and here’s why it’s good for the company,’ ” Ms. Saunders said. “So, a focus on behaviour has really become the shift, I would say.”
Travel companies are ready to make a deal – The Globe and Mail