Are you getting the best price for your airfare?
Book on Wednesday. Book just before midnight. Shop around to compare airlines. Book 57 days in advance. There’s no shortage of statistics and advice on how individuals can secure the best price on air travel, some of which can be debunked quite easily. For corporations though, unlocking the secret of securing lowest fares at scale, could mean big savings.
Understanding price fluctuations
However, airline pricing is complicated, with fares fluctuating an average of 90 times between listing and the day of flight. The price can vary for many reasons. There’s supply and demand – if demand is high, prices are likely to be higher (e.g. on peak routes and during holidays). And if demand is low, prices can be dropped in order to fill seats.
An airline also typically offers a certain number of seats per flight at discount prices, and then, once those have been sold, it moves onto the next category of pricing all with different thresholds for re-booking, cancellation fees, and flexibility.
Another major influence on pricing is an airline’s competition. These days, airlines deploy advanced technology can tell it in real time how its competitors are pricing similar tickets. The airline can then adjust theirs accordingly to stay competitive.
Challenges with corporate bookings
Understanding the complex world of airline pricing is difficult enough. Then, in business travel, having the flexibility to carefully consider when to book a fare is rarely possible. Corporate travel policies often state that travel should be booked within a certain time frame, and offer guidance on booking complaint fares. However, business trips are often booked when the need arises, which is unlikely to be when flights will be at their cheapest.
Lowest fares equal big savings on corporate travel spend
Imagine a business class fare from London to New York in April; at the time of booking in early March, your traveler secured a fare of $4,000. However, two weeks later, the same ticket is being sold for $3,500. Had you known this, you undoubtedly would have told your employee to wait to book.
A recent study by JP Morgan found that companies spend an average of 1% of their total revenue on travel (2018 Corporate T&E Spend Benchmarks Report), or 10-12% of their annual spending budget. That’s a significant amount. So imagine being able to book all of your corporate travel fares when they are at their cheapest. That spend would decrease significantly.
A very small percentage of travelers on any flight will have paid the cheapest offered price for their tickets. Those that have will have booked at the right time, and under the right conditions – probably as a result of luck. Everyone else will have paid higher prices – and most have no real way of knowing how their purchase price compares to that of other travelers.
Saving after booking
The hard truth is, there’s no reliable means of predicting whether fares will go up or down, and when is the right time to book. This, coupled with booking travel to fulfil the needs of your business, makes it impractical to wait around in the hope of a price drop.
The good news is, today your employees can book airfares at any time, and still walk away with the best rate. How? Fare tracking and auditing services such as FairFly monitor the prices of flight tickets both within and beyond the void window, if the price drops, rebook you into that lower-priced fare. It’s as simple as that.