Nearly 70% of European companies that are present in only one country centralise their travel bookings with "travel arrangers" compared to just 40% of companies with multi-country presence, reveals a study.
Egencia, the Expedia-owned travel management company, conducted a study among 5,190 of its clients across 13 countries including Germany, Belgium, France, Spain, Ireland, UK, US, and Switzerland.
Egencia defines "travel arrangers" as someone that makes more than 50% of reservations for others. And, "self bookers" are the ones that the make majority of their reservations themselves.
The study was carried out to understand (comparison, pattern, takeaways) the "centralised" and "decentralised" process of business travel booking that exists across companies in Europe and the US.
When more than 60% of reservations are made by travel arrangers or internal travel services, the process is referred to as "centralised".
When less than 40% of reservations are made by travel arrangers or internal travel services, then the study calls it as "decentralised".
Compared to Europe, the percentage of companies in the UK with centralised booking is slightly lower (60%).
Companies with operations in several different countries tend to decentralise their travel purchasing more than companies operating in only one country.
In North America, 70% of companies based in one market decentralise the management of their business travel and in multinational companies 100% of reservations are made by self-bookers.
Centralised model: What travel arrangers do?
In Europe, travel arrangers make an average of 64 reservations per year, this is seven times higher than a self-booker. However, in the UK, travel arrangers book six times more than a self-booker.
Travel arrangers often make reservations for travellers who do not have direct contact with the travel agency. As a result, 50% of European travellers and 40% of UK travellers do not have contact with external travel consultants.
Irrespective of whether a company centralises or decentralises its travel reservation, the mix of air, hotel, train and car reservations made are identical in both models.
But, travel arrangers tend to reserve more flights with refundable and exchangeable fares than self-bookers do. Self-bookers reserve 40% fewer fully-flexible tickets than travel arrangers, and 50% more no-cancellation and non-refundable tickets.
Also, 75% of hotel reservations by travel arrangers are for preferential rates that offer value-added services (Wifi, breakfast, parking).
Lessons from centralized model
Travel arrangers prioritise their choices in order to meet the expectations of their varied traveller profiles: demanding or VIP travellers, complex itineraries, or simple trips. Ability to offer flexible solutions for travel arrangers is seen as one of the key needs.
Travel arrangers often adopt a Total Cost of Ownership (TCO) model. They choose tickets that may be refunded or modified free of charge in order to avoid penalties.
Travel arrangers are often expert buyers and know that advanced booking can save money. They acquire a professional level of expertise through managing high volumes of transactions.
Whenever travel arrangers see value add in online tools, they choose to reserve online rather than going to an agent.
Decentralised model: What self-bookers do?
30% of European companies (mostly multinationals or large companies) decentralise their reservations.
Self-bookers are quick to adopt online booking and use them for more than 80% of their reservations. 75% of self-bookers make more than three reservations per month.
When it comes to the booking pattern of self-bookers, they
- Cancel two times fewer reservations than travel arrangers
- Reserve 40% fewer fully flexible tickets
- Bok 30% more no-cancellations and non-refundable tickets than assistants do
Lessons from decentralised modelProviding efficient and familiar booking tools to self-booking travellers can help them to consistently book travel that complies with company policy.
Since travellers know their schedules better than a travel arranger might, self-bookers reserve fewer fully-flexible tickets and more restricted fares. Also, they are more able to accept the risk of buying a restricted fare.
When it comes to taking key decisions, travellers can decide to book a lower standard hotel if it offers a better location. A travel arranger might not take that risk when they do not know the traveller’s priorities.
NB: The full report can be downloaded here.
NB2: Traveller image via Shutterstock.