Rigging successful cost containment in travel
Changes for air and hotel contracts
Airlines and hotels have been forced to reassess their contracting arrangements post-pandemic. As a result, the contracting environment has well and truly shifted. Airline contracts have changed, so make sure you’re reading the fine print with regards to items such as:
- Spend thresholds
- NDC (new distribution channel) requirements
- Non-performance penalties
- Change requests
In the hotel space, FCM Consulting has seen a 45% increase in the use of Non-Last Room Availability (NRLA rates). With demand for accommodation on the up and hotel occupancy in most countries (except Mainland China) sitting at or above 80%, it’s important to keep an eye on your contracts. Otherwise, you may end up paying rates up to US$30 more, depending on the hotel and city.
Hotel rates stabilise
Average room rates soared in the Middle East in the final quarter of 2022 and were back to 2019 levels. Riyadh hotel night prices increased on average 86% in Q4 2022 vs Q3 2022, with Abu Dhabi seeing an 82% increase too. With the exception of Nairobi and Windhoek, major cities across Africa saw prices rise too, although by single-digit percentages.
Just like the oil and gas industry, the travel sector continues to grapple with labour shortages. This was the biggest challenge for hotels in 2022, which is set to continue into 2023.
The traveller experience gets a boost
Now the global travel industry is getting things back in order and up and running, suppliers are finally coming up for air. Air, hotel and car hire operators will be breathing new life into the traveller experience in 2023 - looking at ways to make travel options more personal and tailored.
The ‘traveller-first’ mentality will filtrate through the corporate travel experience from new distribution channel (NDC) content from airlines to more personalised hotel experiences driven by smart technology and traveller-centric travel programmes designed to keep travellers happy, healthy and comfortable.