Airlines Are The Stingiest Suppliers, Says GBTA Surveyby Barbara Peterson /
Photo courtesy: Khaosaming
As if anyone needed a reminder that those days are long over, a recent survey of travel buyers from the Global Business Travel Association found that airlines are the stingiest of all suppliers when it comes to throwing in added benefits for corporate clients, such as waiving fees for things like checked bags or itinerary changes.
Travel buyers are most likely to win favorable terms when negotiating add-ons and amenities with hotels and ground transportation companies, the GBTA survey found. More than 100 travel buyers in North America participated in the survey, which was sponsored by Amadeus.
One of the main findings was the discrepancy between what corporate travel agents and TMCs consider important to include in a supplier contract, and what they are actually able to secure for their clients, at least where air travel is concerned.
For airlines, travel managers’ top priority is eliminating fees for cancelled or changed itineraries, with 99% saying that they seek to work that item into a contract. However, the survey showed that they succeed in doing so only 25% of time.
The two other most frequently requested add-ons are name change waivers for tickets and ticket credits, and waivers for checked-bag fees. More than 90% of the buyers polled deemed them as valuable, but they are included in the final contract just 61% and 15% of the time, respectively.
For hotel contracts, the most sought-after amenities are free Wi-Fi, last-room availability, and free breakfast. Here, the track record for travel managers is much better, with more than 8 out of 10 final contracts including these valued add-ons (89%, 82%, and 82%, respectively).
For ground transportation contracts, nearly all travel buyers value cite expedited rentals as a valuable perk, followed by vehicle-class upgrades and vehicle choice. The survey said that these features usually appear in the final contract 80%, 70%, and 69% of the time, respectively.
That the airlines are effectively an outlier in this area is not a surprise, given how much the industry is raking in from fees for ancillary services. In 2015, ancillary revenue accounted for 8% of the U.S. domestic airlines’ total revenue, up from 3% just 10 years ago. That may explain why travel managers increasingly seek to protect their clients from these often unanticipated charges.
“Companies may see cost savings if the amenities and add-ons identified as valuable are more often negotiated into the final contract, particularly when it comes to airlines,” said Kate Vasiloff, GBTA director of research.
And it’s not just about the money saved. “While cost savings is generally the driver for contract add-on services and amenities, improving the traveler’s experience throughout the journey is also critical in maintaining employee productivity and satisfaction,” said Jay Richmond, Head of Amadeus North America’s Business Travel Group.