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Picture: 123RF/MICHAELJUNG
Picture: 123RF/MICHAELJUNG

It’s a delicate thing – balancing cost, flexibility and traveller wellbeing when you’re defining your corporate travel programme.

The lower the fare, the more restrictive the ticket, the less flexibility you have. The more you save in the short term by flying employees in economy class on the red-eye, the worse the long-term effect on their wellbeing.

The seesaw corporates face when trying to keep costs as low as possible, while ensuring they have the flexibility they need to achieve their company’s goals and reduce the potential friction their frequent travelling staff may feel, requires an expert approach.

That’s why getting corporate contracting right is so important, says Oz Desai, Corporate Traveller SA’s general manager.

“You have to be familiar with how airlines and hotels structure their fares or rates and learn how to balance the opposing needs to cut costs, but increase flexibility so that you’re only paying for it when you actually need it, and choose the lower price when you don’t.

“Here’s where a good travel management company (TMC) can add true value. TMCs are skilled in balancing the risk of total fare loss for cancellations and can manage refunds or credits on your behalf when you enter into a contract with a travel supplier.”

It helps to look at your corporate contracts regularly when you’re reviewing your travel programme. “Remember, you’re not just looking to save money. Traveller safety and comfort are also important and skimping on these could mitigate any short-term gains you’ve made from saving travel costs.

“The key is to get the best return on your travel spend. So, ensuring that the value of that business trip goes beyond what you’ve put into it in terms of cost and traveller friction. At Corporate Traveller, we make it a priority help companies draw up and review travel programmes so that you achieve this balancing act.”

Desai highlights the importance of travel industry knowledge when negotiating corporate contracts. “An example of where this is essential is when you’re negotiating rates with providers based on volumes. There can be some important pitfalls to getting locked into a client-specific negotiated contract. If you miss your target, the deal will fall away and often rate discounts only apply to higher fares so you could be paying substantially more than the cheapest available ticket price.”

The same is true for negotiated hotel rates, says Desai. “The way most hotels manage their yield these days means that a static corporate rate is not a great option as you cannot take advantage of lower last-minute prices,” says Desai.

He explains that The Royal Palm in Dubai, for example, changes its rates up to 14 times per day depending on the market it is targeting and the availability of rooms. Being locked into one static rate means corporates could miss out on great savings.

Corporate Traveller combines the insights it has about corporate travel with the insights it learns about your organisation – your corporate goals, travel behaviour and staff requirements – to help you define a travel policy that best balances this need for cost control with flexibility and traveller wellbeing.

“When you’re trying to hit the sweet spot in this equation, it makes sense for you to turn to an expert that can help you craft a travel policy that’s right from the start, instead of learning as you go along and taking too long to tick all the boxes,” Desai says.

Learn more about how to negotiate your corporate contracts in travel, by reading this Corporate Traveller whitepaper, which notes some of the insider travel tips that could make a difference to your company’s travel programme.  

This article was paid for by Corporate Traveller.