Tough market for business travel buyers

14 February 2013

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14 February 2013 | Helen Gilbert

Travel buyers will have to maximise their skills and deepen their category knowledge in 2013 to contend with weak markets and upward pressure on rates, an Institute of Travel & Meetings (ITM) report has cautioned.

Airfare rises, a sharp increase in hotel costs and the continued weak economy in Europe will be among the challenges the sector will face over the next 12 months, according to ITM’s 2013 Industry Outlook, Trends in Corporate Travel.

The review – based on a number of studies and survey responses from more than 2,000 travel managers globally including 100 in the UK – forecast air traffic increases in all regions with carriers exerting tight restraint on capacity.

As a result, airfare prices across the globe look “certain to rise” particularly in EMEA, Asia Pac and the Americas, the report said.

Hotel rates are tipped to spike in Asia Pacific, while London was expected to see rate hikes alongside continued growth in the use of ‘aparthotels’ (a mixture of a hotel and apartments) and serviced apartments during 2013.

Other findings suggested that car rental rates were set to jump sharply in France, while moderate increases of between two and three per cent are forecast in Germany, Russia and the UK. Prices are, however, expected to fall in Italy.

“In order to minimise price increases (upward pressure on price) for their companies, travel buyers will need to use their negotiation skills,” ITM chief executive office Simone Buckley told SM. “Deep expertise in the travel category will help them as will a strong relationships with their supplier partners.”

Buckley said ITM had partnered with CIPS to develop three workshops - sourcing travel management company services and travel technology, airline programme negotiations and management, and hotel programme negotiations and management - geared towards helping buyers prepare.

“Understanding the key drivers behind how hotels [for example] set their rates will help buyers understand how to better negotiate – that’s the aim of the workshops,” Buckley said.

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