Skift Take

It's no surprise that travel buyers want to save money for their company. But they also need to realize that uncomfortable or inconvenienced flyers are going to spend extra on seat upgrades, Wi-Fi, meals, and more.

Perhaps at the cost of comfort for their travelers, travel buyers are firmly fixated on driving savings when they negotiate agreements with airlines, according to a new report.

“The Evolution of Airline Agreements” report from the Association of Corporate Travel Executives (ACTE) looks at the priorities of travel buyers when it comes to airline agreements and ancillary purchases.

Considered along with another recent report on travel manager priorities, this new report shows some of the causes of friction that plagues the corporate travel ecosystem.

For the report, ACTE polled 212 travel managers on their goals and habits. The results show that traveler satisfaction and comfort is less important than receiving discounts and rebates. The good news is that many said that comfort could become more important to their travel policy in coming years.

Nearly half of respondents work in the Americas, while 36 percent work in EMEA and 19 percent work in Asia Pacific.

Here are four takeaways from the report.

Airline agreements are all about the money

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It’s not a surprise that discounts are the most important part of airline agreements for travel buyers; their job is to make deals that end up saving money.

Traveler comfort packages and service are the least important factor for travel buyers.

“To be brutally frank we don’t factor in service today as one of the main decision parameters – it is almost all on price – but that might change next year due to a possible update in travel policy,” said a global sourcing lead in Europe.

Traveler satisfaction is secondary to savings

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Traveler satisfaction and the value of benefits provided to travelers lag behind discounts when travel buyers assess the value of their airline agreements.

“Today less than half of buyers include the value of traveller benefits like upgrades or traveller satisfaction when they assess the performance of their agreements,” reads the report.

Most ancillaries aren’t integrated into online booking tools

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The role of ancillaries in business travel is still emerging. Less than half of those polled said their company’s booking tool allows users to book seat, baggage, or grand transportation products.

It’s a big issue that travelers aren’t informed enough to understand how spending on ancillaries impacts the final cost of their business travel to their company.

“There’s an education job needed with ancillaries. Travelers are mostly well-informed but they have a blind spot on the cost implications of ancillaries,” said a regional category manager in North America. “One of my travellers last month got a cheap fare with a low cost carrier – and then got $300 of fees for two items of baggage.”

Corporate policy is slowly adapting to the reality that most business travelers will buy Wi-Fi access while flying, though. Business travelers booking ancillaries outside of of authorized channels like an online booking tool is becoming a bigger issue in corporate travel as airlines have doubled-down on merchandising seat upgrades and baggage fees.

“Our policy on ancillaries today is unclear,” said a European buyer. “But ancillaries will become more and more important due to travel industry and technology evolution and traveller requests. When airlines find a way to offer ancillaries in a way that’s transparent and bookable then they will become more interesting for us. But other buyers are pushing forward with their own initiatives, such as allowing their travelers to buy mobile WiFI on their booking tool.”

Airline buyers don’t want airlines pushing offers to their flyers

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It makes sense that travel buyers don’t want airlines pushing offers and deals to their flyers that could end up increasing the overall cost of the their trip. But travel buyers do want flight status alerts and notices about traveler benefits from the airlines.

There’s also the worry of airlines pushing products from their partners, like car rental services and hotel chains.

“On the one hand buyers warmly welcome direct communication from airlines that enhances traveller service,” reads the report. “A substantial majority (90 percent) are in favour of flight-specific updates from carriers such as departures, gate changes or information about ground transfers…

“But buyers are much less receptive to airline marketing directed at their travellers, which can cover special offers, competitions or ancillaries. Almost half (46 percent) oppose promotions for future bookings. Opposition is even stronger to offers from airline partners (car discounts, local hotel deals etc.): over half (52 percent) oppose this kind of communication.”


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Tags: airlines, travel managers

Photo credit: Corporate travel buyers are focused on savings, not providing better experiences for their flyers. Travelers are pictured on line at Terminal 1 of Minneapolis-St. Paul International Airport. 170006 / 170006

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