Planning travel in advance is a simple (but often overlooked) strategy for making savings for your next business trip, just as it is for your vacation. Research conducted by Corporate Traveller has indicated business travellers can pay up to 164%^ more than the average ticket price for airfares purchased one day out from travel. Whether your business uses an open sky policy, best fare of day from preferred airlines, or has a corporate negotiated contract in place with a specific carrier, advance purchase is a versatile solution that can be used in conjunction with other policies to increase savings.
BEWARE THE LAST MINUTE FARE
Corporate Traveller’s research compared ticket prices based on the length of advance purchase to six key global destinations (Dallas, LAX, Hong Kong, London, Sydney and either of Toronto or Vancouver) out of both Toronto and Vancouver.
Regardless of cabin, passengers who booked within a week of departure were typically subject to significantly higher airfares across all destinations, most especially for the international destinations and for tickets purchased within a day or so of departure.
According to the study:
- Passengers travelling in economy purchasing tickets at least 21 days out typically save up to 48% compared to the average fare paid. Even those travelling in business class can also see savings of over 40%.
- Passengers purchasing tickets within 7 days of travel should expect to pay in excess of 26% more than average in either cabin.
- For travel outside of North America, those differentials can be doubled or more.
Presumably a business trip would also require a hotel stay and the same sorts of savings can apply in this space also. Indeed, if you're travelling to a city that typically hosts conventions or events, you may need to book accommodation months out to secure not only a good price, but also the location that best serves your needs. An out of the way hotel adds time and money to your trip as well and making your business day that much more challenging.
Of course these savings have to be offset against possible changes to schedules, which means if you buy your airline ticket in advance your chance of having to pay change fees increases. So, sometimes booking more expensive (typically more flexible) tickets, or waiting until you are sure not to change can have its benefits. Sometimes…
REDUCING YOUR AVERAGE TICKET PRICE
Economy Class seats are generally staggered in price from headline fares for the cheapest seats to fully flexible for more expensive seats. This is also true in the premium cabins, especially to long haul destinations. By working with your travel manager to implement an advance purchase strategy, your business can ensure access to the best value fares every time and reduce the bottom line impact from seasonal and market fluctuations. As noted, sometimes it is better to buy-up to a higher more flexible fare (which may also come with added frequent flier benefits as well), but that won’t always be the case. Prices increase more rapidly during peak travel periods, making advance bookings particularly important for high frequency travellers. Corporate Traveller’s study shows the lowest fares are generally advertised 21 days or more out from departure regardless of the season or destination.
Implementing an advance purchase strategy into your travel policy is an effective way of overcoming price fluctuations in ticket classes. Your travel manager can identify opportunities to save by negotiating an airline agreement with your preferred carrier including cheaper, restrictive fares that can be booked in advance and at the same time weighing up the chances of having to amend your plans and the costs associated with that.
Combining an educated advance purchase strategy with a best fare of day policy can effectively reduce travel costs and meet budget objectives.
^164% based on flights between Vancouver and London 21 days out vs next day travel