With the news crammed full of stories on global uncertainty, such as soaring costs – from energy prices and fuel for transportation to hotel room prices – or airports introducing passenger capacities to deal with traveler demand, it may be tempting to hold off on budget planning for travel in 2023 until the last minute. Yet planning ahead could help add significant value to your travel programs.
Airline ticket prices will continue to rise, according to IATA Director General Willie Walsh, due to global demand post-pandemic and rising fuel costs due to the war in Ukraine. With business travel traditionally booking closer to departure times – with the understanding that tickets would cost more for a preferred flight time – this may not be the best move. As businesses look to find better ways to manage costs, the last-minute approach isn’t the best option for finding the best flight prices to incorporate into your 2023 corporate travel budgets.
“There are two ways to approach this challenge,” Reed & Mackay Client Success Team Lead James Reeve says. “Reducing the amount of travel that a company does or, if that’s unrealistic – and for a lot of our clients it is – combining more meetings into one trip. Instead of jumping on a plane for five separate trips in one destination, plan ahead to visit that destination once and arrange more meetings in one trip.”
Reed & Mackay sees that preplanning can make a difference; our in-house data suggests clients are increasingly booking air travel further in advance compared to last year.
We’ve seen an almost 11% increase in clients booking air travel more than 14+ days in advance in 2022, compared to 2021, while there’s been an almost 6% drop in booking trips 0-2 days before flying.
It’s worth considering advance purchase for flights ideally within a 21-day window before departure, as this is when airlines start adjusting their prices in accordance to demand. “Carbon commitments are also playing their part too, which means combining trips into one could be a key factor in 2023,” Reeves adds. “Being able to honor these carbon commitments needs advance planning.”
How does planning and booking accommodation in advance help save money in your travel budget? Reed & Mackay Global Program Manager, Commercial, Slavka Gindeva says that, aside from energy costs and hospitality staff shortages playing a part in soaring hotel prices, particularly in major cities, the pent-up leisure market demand has also made an impact. So it can be beneficial to incorporate accommodation choices further ahead in your budget planner.
“The real pain point is finding the best corporate hotel prices because hotels are full of leisure customers,” she says. “If bookings are left to the last minute – whether that’s for a big city hotel in London or a hotel with a great location in smaller cities across the world – corporate rates aren’t available.
“To help with this, hotels are now trying to encourage business travelers to book in advance by offering cheaper, non-refundable rates. If you definitely know that at least some elements of your travel program are going to happen, book in advance.”
Gindeva echoes Reeves’ suggestion of trip-batching, citing that it can make a real difference to getting better hotel rates, particularly if you stick to a few trusted hotel suppliers.
“If you limit to preferred vendors, you’ll develop strong relationships with the supplier, and that could help with contract rates. Plus, it’s worth noting that suppliers reward loyal customers, so make sure to sign up to your preferred supplier’s loyalty programs. Trip-batching also works well for keeping within the sustainability policies clients may have.”
The rising demand for corporate meetings and events also means hotels are getting busier, which highlights another good reason to start planning travel budgets and bookings sooner rather than later.
Elsewhere, the growth in hybrid working – with more people working from outside of the office, particularly on days either side of the weekend – means the busiest days to book hotels are Tuesdays and Wednesdays. Look to book outside those days for additional value.
Consider the regions that your travelers head to regularly and how geopolitical situations may affect prices and availability. For example, as Asia reopens following the lifting of remaining COVID-19 restrictions, such as in Hong Kong and Japan, these destinations may experience a surge in demand – pushing up prices and limiting availability.
did you know…?
Whether booking online with R&M/Book or via your dedicated consultant, Reed & Mackay’s technology ecosystem ensures you have access to the latest content at great value.
INTERESTED IN FINDING OUT MORE?
Contact us here, email helloUS@reedmackay.com or speak with your Client Success Manager.