Spot buying becomes more popular with travel buyers

2 March 2012

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2 March 2012 | Paul Snell

Business travel purchasers are moving away from negotiated corporate deals with suppliers, even though the process of buying is becoming more professional.

According to a survey of 1,701 travel buyers conducted on behalf of AirPlus, there is less appetite for agreed deals in favour of spot purchases. The poll revealed both a fall in the number of companies with corporate rates for air travel - from 59 per cent to 54 per cent. There was also a reduction in the average savings achieved through negotiation, from 18.5 per cent in 2011 to 15.1 per cent this year.

“This surprised us because the more professional you are and the more data you have, the more corporate deals you can strike,” said Patrick Diemer, chairman of AirPlus. “Spot buying is increasingly gaining ground in our trade.”

The rise of a more professional process included the introduction of travel policies - up 11 per cent since 2008; analysis of travel spend - a rise of 4 per cent; a 6 per cent increase in the use of corporate cards and 11 per cent of firms converting to electronic invoicing.

The poll also found business travel volumes returning to levels seen before the financial crisis in 2008. Companies are now not willing to cut back on travel, as they see it as a way to increase growth.

But there was bad news about prices, with rises predicted in most categories. The average cost of a flight rose from £409 in 2010 to £429 last year, and the cost of a hotel stay rose from an average of £213 to £220. The average cost of a plane ticket increased partly because of a 2 per cent rise in the number of business class tickets purchased. “Trips will remain the same but 40 per cent [of buyers] expect to pay more,” said Diemer.

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