Does your ‘small company’ find it hard to book travel?
12 August 2016 by Leigh Cowlishaw
How do the results of a Phocuswright report on how leisure travellers shop for online travel reflect on business travel?
I’ve recently shared my thoughts on whether business travellers from small companies pay more for travel than bigger organisations. My post, which challenges that theory, follows a report from IHG (InterContinental Hotel Group). The IHG report also cited that travellers from ‘small’ companies find business travel more time consuming and difficult to book, compared to larger firms.
My earlier post explained how travel management companies (TMCs), such as Capita Travel and Events, can help companies of all sizes, to effectively manage business travel and meetings costs and the associated travel experiences.
Since I wrote my last feature, research has been published in a report from Phocuswright, the travel industry research company. This new report highlights where leisure travellers shop online for travel - I’ll come back to that later. First, it’s important to point out the word ‘leisure’ in that last sentence. The people surveyed for the research were not travelling for business.
The results examine ‘direct’ booking – via airline and hotel owned websites - and ‘non-direct’ booking - through online travel agencies (OTAs) such as Lastminute.com and booking.com. OTAs have grown through a focus on travel for the business to consumer (B2C) market, rather than TMCs that specialise in travel and meetings for companies and their employees (business to business, or B2B).
Some global hotel chains seem to put TMCs in the same pot as these OTAs. As specialists in business travel, meetings and events, we have to disagree. In a similar fashion to OTAs, TMCs do offer an end-to-end service with many enabling customers to book all travel and accommodation needs through one central booking tool.
But many TMCs also provide companies with meeting venue and event management services, full visibility of spend through to VAT recovery that supports HRMC recording, customer negotiated rates and added value, business traveller wellbeing and duty of care through traveller tracking tools. In essence we’re an extension of most procurement and HR teams.
The benefits of TMCs for business travel go on, but the trends in the research proves interesting for hotel groups considering their mix of direct and indirect sales, or distribution channels – where they sell their hotel rooms.
Easy to book
The Phocuswright survey results differ depending on the global location of the travel booker. But, overall OTAs hold a big lead over direct channels, especially when it comes to hotel bookings. There are exceptions, such as the U.S., where some big hotel brands have much more dominance and can drive greater brand loyalty due to fickle buying behaviours and lack of policy and compliance.
The reasons that respondents gave for the indirect booking preference are important. 29% said it was because they find it easy to book all of their leisure travel in one place via an OTA.
That advantage is the same for business travellers using most TMCs but we don’t simply aggregate and compare prices like OTAs. Along with the other TMC benefits, our own booking tool includes negotiated hotel rates and fares and availability at each customer’s preferred hotels alongside other properties in the same area. This provides travellers and their employers with full transparency and helps drive demand for suppliers from the B2B market.
It gives customers value, variety and cost control - by pointing business travellers towards their company’s travel policy and nudging them into smarter buying choices that still meeting their needs.
Despite IHG’s report claiming that travellers from ‘small’ companies find business travel more time consuming and difficult to book, that really doesn’t need to be the case.
34% of the UK respondents in the Phocuswrite to the survey ‘agreed’ or ‘strongly agreed’ when asked if a non-direct booking channel provides better prices than via a suppliers own website. 30% also said that one of their reasons for using OTA was because they ‘typically have the best prices’.
Part of the appeal to price sensitive bookers is cited in report as the travellers’ ability to compare prices. Because leisure travellers can see a cheaper hotel rate in the same location, they believe that they’re getting the best price. The same can be said of TMC booking tools for business travellers.
In addition, our technology and teams provide a quick, efficient and fully auditable process for collecting, chasing and negotiating hotel pricing. Using our data, supplier relationships and economy of scale, we successfully manage hundreds of customer hotel rate programmes every year.
Interestingly, we regularly benchmark our best available rates on the day and compare them against those of well-known comparison or OTA websites. Our travellers can often get the better deal through our buying power and supplier relationships – those booking customer negotiated rates take advantage of prices that are up to 30% lower.
So TMCs can offer the convenience, choice and ease craved by consumers, alongside cost effectiveness for business of all sizes.
Trust in a brand
The final part of Phocuswrite research that I want to highlight is that 34% respondents said that they book via indirect channels because they trust the brand. That trend is important to us as a business; we feel passionately that our customers are using a brand they can trust.
But our responsibility doesn’t start or finish when a booking has been completed - that’s just one part of our expertise, and brands such as IHG, Marriot and Hilton in the main acknowledge this for the UK market. As well as negotiating prices and encouraging smarter booking behaviour, our end-to-end service means we track travellers throughout their journey. Businesses can be assured that if a major incident occurs anywhere in the world, we know which travellers might be affected and can work on contingencies to help ensure their safety and wellbeing.
For example, during the Brussels attack in March this year, we supported passengers whose travel was affected. In the same month, a customer group travelling on an incentive trip through Barcelona was faced with unplanned strike action by French air traffic controllers we supported the group of 92, re-arranging flights and quickly booking suitable accommodation where needed.
How travellers think
The Phocuswrite report provides some insight into how travellers think. It supports the growth of non-direct booking channels in leisure but also confirms my view business travellers can get the same advantages, and additional support, value and expertise, from TMCs.
It also brings me back to the main message in my last article – high quality services and savings are available for companies, no matter what the scale of the organisation. With current regional and global economic and political uncertainty in mind, managing business travel and meetings through experts is vital for all businesses.
Interested? Let’s have a chat about your company’s travel, meetings and events objectives - from the stuff that keeps you awake at night, to the everyday experiences of your employees! Call us on 0330 390 0340, or submit your details below.