In the context of corporate travel, an advance purchase policy is often included in the general travel policy of a company. It defines how long in advance employees should plan and book corporate travel. Historically, this has been set at around 14 to 21 days before departure based on the assumption that the closer you are to the travel date, the higher the price.
With airline yield management systems looking at competitor pricing, how busy certain routes are, and even forecasted weather patterns, it is often the case that prices will fluctuate significantly between when they are published to the departure date. With more volatility closer to the time of the first flight.
It is common to see advance purchase policies enforced on the booking tools used by employees with extra notifications and approvals required for travel plans that are made within this window.
When looking at actual data, Oversee has seen that a strictly enforced advance purchase policy can, in many cases, increase overall spend.
Airlines seek to have a predictable stream of bookings to fill flights over a period of time. Too few people have booked, prices will drop – too many, prices will rise.
