More than three-quarters of travel buyers (77 per cent) believe the negotiation environment currently favours suppliers, while European travel managers are particularly struggling to secure preferred rates, according to research from GBTA and HRS.
The survey of more than 250 travel managers globally was conducted in May this year and found buyers now face a “uniquely challenging” environment.
Less than a quarter of buyers (23 per cent) say it has been easy over the past year to obtain favourable hotel rates, while the figure dropped to just 18 per cent for air travel.
European-based travel buyers are particularly challenged in the accommodation arena. Nearly three quarters (74 per cent) say it was “somewhat” or “very” difficult to secure favourable rates in the past year. This compares to about half (47 per cent) of North American-based buyers.
When asked to pick two categories that will prove most challenging when it comes to securing favourable terms in the next two years, most respondents picked air (69 per cent) and hotel (56 per cent).
Despite the trend, more than four in five travel managers (84 per cent) say their company will conduct hotel Request for Proposals (RFPs) within the next year.
HRS CEO Tobias Ragge said: “There is no question that suppliers have leverage today, and corporations remain challenged to keep travel costs in line even as business opportunities grow… that said, the fact that 84 per cent will conduct hotel RFPs demonstrates confidence in the evolving procurement landscape.”
Ragge said the company has seen more companies taking extra steps to uncover and consolidate all their accommodation data and spend to maximise the value of their business to preferred hotel partners.
“In this environment, the ability to cumulatively bring transient, meeting and extended stay volume together – the core elements of convergence – is a necessary launching point for 2024 supplier negotiations,” said Ragge.
Benefits of
convergence were cited by travel managers as consolidated data (70 per cent), greater discounts (66
per cent), process efficiencies (57 per cent), and time saved on RFPs
(57 per cent).
Suzanne Neufang, CEO GBTA said: “Travel managers increasingly recognise that convergence should be a significant element of their programme approach moving forward.
“By collaborating with internal partners in key areas, they can facilitate even more value, cost savings and efficiency for their company, while also driving increased satisfaction among their business travellers.”