Last-minute bookings hurting SMBs
Canada’s companies are spending too much on business travel because they’re chronically booking too late to take advantage of lower air fares. And the hardest hit are the companies that can least afford it. Those are the expensive conclusions drawn from a multi-year fare analysis conducted by Concur Canada.
The travel and expense management specialist looked at 2.3 million separate air travel transactions between 2014 and the second quarter of this year, in order to determine the cost of booking last-minute corporate travel here.
With the economy in growth mode, corporate travel is also on the rise, which means that last-minute bookings are often inevitable, conceded Concur Canada managing director Kevin Craig.
But he noted that, while the Canadian business community as a whole is losing money when booking last minute, the trend is most detrimental for small- and medium-sized (SMB) outfits, which work with tighter cash flow to cover unanticipated expense Craig explained, “If you’re in a customer support role, you might be looking at a 12- to 24-hour booking window, but if you’re not, your window could be much longer.”
That message doesn’t appear to have trickled down to the business community at large because, according to the analysis, fully 43% of the 2.3 million flights were booked within seven days of departure; 24% were booked between four and seven days out; and 19% in the last three days before travel.
Highlights of the Concur study conclusions included:
• Booking air travel at least eight days in advance offers the best opportunity to keep last-minute airfare costs in check.
• Booking air travel seven
days or fewer before a trip will cost 18% more than if it had been booked at least 15 days out.
• Booking air travel between eight and 15 days before a trip will cost 9% more than booking at least 15 days in advance.
• April averaged the highest premium – 15% – for booking less than seven days out versus eight or more days.
Craig advised that in order to maximize cost control, companies need to let their travellers know that there’s a penalty for booking late when it’s unnecessary. “It should be an internal education process,” he said.
On the other hand, the managing director added, “If an online booking tool is used, there’s a policy that’s included allowing employees to do the right thing. Plus, access to data gives access to behaviour.”