Categorized | Etcetera

Negotiations underway…

Posted on 04 November 2009

Travel management companies are in the midst of negotiating next year’s hotel and airline rates on behalf of their corporate clients, an annual ritual that was thrown into turmoil last fall when the economy collapsed, dragging down business travel with it. The question this fall is whether the rates negotiated now will stick or whether they will be renegotiated and renegotiated again, as they often were over the last year. At the moment, according to travel management company executives and other industry experts, companies have the most leverage over hotel rates, since the supply far outstrips demand in many business travel destinations.

 

But, the travel managers say, companies have far less control over airfares, particularly those set by American carriers, which have significantly cut capacity and, along with it, much of the wiggle room in negotiations. What is still on the table with the airlines, the travel managers say, are allocations of elite frequent-flier program status or upgrades, which can lead to a waiver of fees for baggage checking and other services. American Express and Carlson Wagonlit Travel have forecast that fares on flights used by business travelers will rise in 2010, although both are projecting smaller increases for domestic flights than for international flights.

Source: New York Times

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