According to a new report from the Global Business Travel Association and corporate lodging and payment technology platform HRS, corporate travel is likely to return to 80 percent of its prepandemic volume by the end of this year. At the same time, travel procurement leaders are having a hard time getting discounts and compelling pricing from air and hotel suppliers, and do not see this changing soon.
Notable results from the survey on the current negotiation climate include:
- Less than a quarter (23 percent) of buyers said that over the past year it was easy to obtain favorable hotel rates, while only 18 percent say it was easy to secure favorable air discounts.
- European-based travel buyers are particularly challenged in the lodging arena. Nearly three quarters (74 percent) say it was “somewhat” or “very” difficult” to get favorable rates in the past year. This compares to about half (47 percent) of North American-based buyers with the same opinion.
- When asked to pick two categories that will prove most challenging when it comes to securing favorable terms in the next two years, most respondents pick air (69 percent) and hotel (56 percent).
- Despite this outlook, more than four in five travel managers (84 percent) say their company will conduct hotel Request for Proposals within the next year.
“There is no question that suppliers have leverage today, and corporations remain challenged to keep travel costs in line even as business opportunities grow,” HRS CEO Tobias Ragge said in a statement. “That said, the fact that 84 percent will conduct hotel RFPs demonstrates confidence in the evolving procurement landscape. For example, we see more companies taking extra steps to uncover and compile the entirety of their lodging data in the quest to maximize the value of their business to preferred hotel partners. In this environment, the ability to cumulatively bring transient, meeting and extended stay volume together—the core elements of convergence—is a necessary launching point for 2024 supplier negotiations.”
By collaborating internally to break out of silos, leaders are increasing program transparency and potential:
- While travel programs meet with some stakeholders regularly (54 percent)—like finance/accounting and sustainability—they typically meet with others on an as-needed basis. In particular, travel programs do not have regular meetings with meetings management and HR departments. Only a third (32 percent) of travel programs meet with these stakeholders on a regular basis.
- Managers can negotiate with hotels for multiple products, segments and services (e.g., room nights, meeting space, room blocks or extended stay) at the same time or using the same technology. Most travel managers (54 percent) think their company would achieve greater process or savings efficiencies via use of convergence, while only one in 10 say they would not.
- Half of travel managers (47 percent) say enabling travelers to book multiple segments on one platform would increase traveler satisfaction at their company.
“Travel managers increasingly recognize that convergence should be a significant element of their program approach moving forward,” said Suzanne Neufang, CEO of GBTA. “By collaborating with internal partners in key areas, they can facilitate even more value, cost savings and efficiency for their company, while also driving increased satisfaction among their business travelers.”