BELLEVUE, Wash., March, 2016 – Last-minute business travel is costly, but what a difference one day can make in managing those costs.
Concur, Bellevue-based provider of integrated travel and expense management solutions, today released an analysis of the true costs of last-minute business travel. On average, booking air travel seven or fewer days before a trip will cost on average 44% more than if it had been booked 15 days or more in advance. However, business travelers can cut this figure in half if they book just eight days in advance or more, resulting in fares that are just 22% more than booking 15 days in advance.
“It’s common knowledge that last-minute air travel will cost significantly more, but booking those last minute tickets eight days in advance is the sweet spot for keeping those last-minute costs as manageable as possible,” said Tim MacDonald, senior vice president of Travel, Concur. “With more data, businesses can make smarter decisions about business travel policies, budgets and back-end processes that ultimately save resources”.
Concur’s analysis also found January and August average the highest premiums for last-minute travel in comparison to the overall cost of the flight. The best month for last-minute travel is June, when premiums are about 8 percentage points lower than the average of premiums throughout the year. However, low premiums on last-minute travel come with a price: ticket prices in June cost 9 percent more than average airfare throughout the year.
Concur analyzed its own data to arrive at the findings. In 2015, the travel and expense management company processed transactions worth more than $70 billion, including costs associated with approximately 22 million U.S. domestic round trip airline bookings from 2011 to 2015 considered in this analysis.
Rising Business Travel Costs
According to Juniper Research, travel is the second largest controllable business expense behind salaries. Last-minute travel is often inevitable in today’s modern business landscape; however, as Concur’s data shows, the impact can be costly.
Meanwhile, Concur data indicates a new trend is causing travel costs to jump significantly – and rising airfare prices aren’t the leading culprit.
- Increases in airfare have been nominal in recent years. In fact, average airfare in 2015 is $5 less than average airfare in 2011.
- However, airline ancillary revenue jumped nearly 69 percent from 2011 to 2014 and nearly 21 percent from 2013 to 2014 alone. Airlines are compensating for relatively flat ticket prices by charging incremental fees for services like seat upgrades, checked luggage and in-flight meals. Ancillary revenue per passenger was $17.43 in 2014, an increase of 8.5 percent from 2013. *
- With nearly $40 billion in airline revenue stemming from ancillary fees, it is more important than ever for travel managers to track these costs.
How Businesses Can Save – Even When Last-Minute Travel Arises
Armed with travel spend data and insights, Concur has tips to help businesses keep costs down and improve efficiencies.
- Establish a travel policy and leverage a travel solution, like Concur Travel, that encourages employees to book at least eight days prior to departure, and then monitor the results via reporting. By doing so, businesses can save an average of $148 per ticket. Reward employees for consistently booking within policy and avoiding last-minute travel.
- Also encourage travelers to:
- When booking last-minute travel, compare fares across regional airports. Oftentimes, employees can save by traveling to small and mid-sized airports. Be sure to take into account the location to determine if the airfare savings are greater than incremental spend on gas or car services.
- Plan ahead to avoid traveling during summer months, if possible, when fares are at peak prices. This is especially good to keep in mind when booking large events and corporate meetings. Consider doing so during off-peak months to save on airfare.
- Factor in ancillary fees when considering travel options. Checked bag fees, seat upgrades and meals quickly add up.
- Most important, adopt an integrated travel and expense management platform that allows you to track and report on the total cost of air travel, including ancillaries like seat upgrades and checked bag fees. By leveraging a solution like Concur, businesses can automate processes, gain end-to-end visibility and reduce spend.
For more information on this analysis, please visit Concur.com.
Concur, an SAP company, imagines the way the world should work, offering cloud-based services that make it simple to manage travel and expenses. By connecting data, applications and people, Concur delivers an effortless experience and total transparency into spending wherever and whenever it happens. Concur services adapt to individual employee preferences and scale to meet the needs of companies from small to large, so they can focus on what matters most for their businesses. Learn more at www.concur.com or the Concur blog.