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Business travel costs are up but travel managers keep expenses down

Posted on July 31, 2013 by FCm Travel Solutions

Brisbane has been named the most expensive city in the world for business travellers according to a global report by travel technology provider Concur.

Sydney and Perth were also named in the top five ahead of New York, Paris and Zurich.  Melbourne ranked seventh most expensive in the global top 10.

FCm Travel Solutions General Manager James Kavanagh said despite these figures, companies partnered with an experienced travel management company (TMC) could mitigate the rising cost of corporate travel through smarter buying policies.

“TMCs and Australian businesses recognise domestic travel can be costly if it’s not managed strategically,” James said.

“We’re still seeing competitively priced airfares around but prices for hotel rates are predicted to continue strengthening.  This is a result of high demand for accommodation in capital cities with only a limited number of new properties.

“Ground transport is another expense that can also be very costly and should be managed strategically, particularly for businesses with hundreds or thousands of travellers.  In Australia, a taxi fare can be almost as much as an airfare from Brisbane to Sydney.”

The report stated Brisbane hotels cost AU$331 per night on average compared with AU$211 in New York.

Brisbane’s mining driven construction boom along with a significant fly-in fly-out workforce has contributed greatly to strong market conditions.

Mr Kavanagh said companies partnered with a TMC, such as FCm, were in the best position to leverage volume driven travel deals with airlines, hotel or car hire suppliers and develop travel programs with smarter policies.

“A travel program that includes a best fare of the day policy, advanced purchase on flights, flexible flight schedules and corporate negotiated rates is a sure way to achieve more bottom-line savings,” he said.

“Businesses with a high volume of room nights per year should work with a TMC for assistance in negotiating the right contracts with hotels.  There are many variables that impact contract negotiations from quantity of rooms, dynamic versus static rates, block-out periods and the ever growing list of inclusions and exclusions.  

“The earlier in the financial year that contracts are negotiated, the better.”

Booking and buying strategies supported by TMCs can insulate businesses from bullish prices and market fluctuations on airfares, hotel rooms and ground transport.

“Domestic travel makes up a significant percentage of corporate travel budgets and given the current state of the market, businesses need every advantage they can to help their bottom line,” Mr Kavanagh said.

 

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