Advito 2013 Travel Industry Forecast
Covington Travel is an Affiliate of BCD Travel, a leading provider of global corporate travel management. BCD’s independent consulting organization, Advito, has released its comprehensive 2013 Industry Forecast.
General Travel Outlook
Given the fear factor of the collapse of the euro or economic slowdown in China, companies are stockpiling cash instead of investing. Slowing growth in travel and little new supply of airline seats and hotel rooms will push costs upwards. Here are some actionable recommendations for the categories of Air Travel, Hotel, Meetings and Car Rental.
Air Travel
• Watch out for restrictions on fares. In the U.S. especially, conditions such as minimum stays are making a return.
• Step up your travel management in Asia Pacific, where savings through introducing a policy and will easily outweigh fare increases.
• Encourage smarter buying by travelers, e.g., booking earlier.
• Watch out for potentially higher prices in Europe because of the Emissions Trading Scheme, and a possible trade war that drags in airlines.
• Ancillary fees aren’t going away however airlines are starting to report on them to corporate clients.
Hotel
• Understand your buying power in better detail. It will be unrealistic to refuse all rate increases but don’t give in completely to hotels’ higher rate demands either. Better data analysis will help you identify where you can stand firm and where you should give way.
• Look again at supplier consolidation, perhaps reducing to only one property in less important locations in your program.
• Conversely, consider expanding the number of properties you use in high-demand markets to improve the likelihood of booking availability.
• Watch out for hotel negotiating ploys, such as giving discounts on standard rooms when no rooms at the property are designated as “standard.”
• Look for internal savings, such as minor downgrades in accommodation standards or setting price caps per city.
Meetings
• Watch out for hotels reducing how long they will hold space without an executed contract in place. It can be for as little as one to two weeks to a month.
• Lead times (the time between when a meeting is booked and when it takes place) will remain shorter than five years ago, although there is evidence of them lengthening again in the U.S. Beware that short lead times in the present marketplace will likely mean higher prices. But don’t make the lead time too short – not only might preferred dates and space be unavailable, but time to contract is taking longer.
• Try to be flexible about the dates of your meeting.
• Consider deals of two years or more to leverage spend, drive better concessions and lock in prices.
• Limit the number of hotels you ask to bid for a meeting.
Car Rental
• If you have not put your car rental program out to bid in the U.S. over the past 12 to 18 months, do so now to ensure your rates are still competitive and are locked in for longer.
• Rental companies are getting tougher about vehicle damage. Tell travelers to walk around the car and note damage both before and after rental.
Contact our Business Travel Services team or call 800-922-9238, 804-747-7077 with any questions.
Source: BCD/Advito 2013 Travel Industry Forecast
