Travel ManagementTravel Technology

Booking travel online is less expensive. Is it really?

By August 9, 2011 No Comments

In the popular media there are lots of articles talking about which website will save you the most money, or about various online booking engines that will allow travelers to book the best deals.  Or there are the ads telling you to get the best deal by booking online directly with the airline.  This constant drumbeat has convinced some people that this is actually the case and so companies opt to use online booking tools in order to save a few dollars on service fees.  Does this really save them money?

Topaz International has done a study that compares Travelocity, Expedia and Orbitz vs. the airline websites.  The study finds that Orbitz returns the lowest fare option 56% of time vs. Expedia at 54% and Travelocity at 47% of the time.  The difference is about $20.00 per transaction.  When Topaz compared these three websites to the airline websites, they found that the airline websites only offered a lower fare 7% of the time for an average savings of $36.00 while the Big Three offered lower fares 27% of the time for an average savings of $82.00.  When you read this you may think, “Well then, I will just book at Orbitz and save money.”  Before you do that, let me point out a couple of things.

First, according to several different studies, the traditional full service agent actually saves more money per transaction than Orbitz.  According to a study done in 2009 by PhoCusWright, the traditional travel agent saved an average of $37.00 per transaction over online booking tools, such as Orbitz, Travelocity, Expedia and the airline sites.

Second, there are hidden costs to booking online.  The biggest one is time.  How long does it take the average person to book the lowest fare, to find that hotel and get the car booked?  According to Orbitz, the average transaction takes 26 minutes to complete.  If you are doing this on your own time, perhaps you think it is worthwhile, however if you are booking corporate travel, then you have to take into consideration the loss of productivity since while you are booking travel, you aren’t likely to be doing what you were hired to do.  Additionally, your company is paying you during this time, which means that not only have they lost your productivity but they are paying for it.  And then there are the added costs that creep into the system, such as personal gain.  This is where the traveler books his or her preferred airline, car company or hotel at the company’s expense or flies into a more expensive airport either because it gets him/her miles or because they didn’t think about an alternative being better.  Examples of this abound, flying into Oakland frequently saves over a $100.00 vs. flying into San Francisco and several hundred over flying into San Jose.  So if one is going to a point that is roughly the same distance from each airport, then it makes sense to fly into Oakland.

Third, if a person books the flights in one reservation and then the car in another reservation and hotels in yet a third, fourth, etc., then one can accrue a lot of service fees.  We see this frequently when a company switches from full service to online bookings.  Travelers may not be really familiar with the online booking environment and thus may not think that they can add flights, cars or hotels to existing reservations.  An example of this is someone who is traveling to several cities and books each flight, each hotel and each car rental on a separate reservation, which incurs a separate service fee for each booking.  So instead of one low service fee for the entire trip, it is possible that the combined service fee for all of these bookings is going to be several times the fee that one would have paid for a travel agent.

Another concern of such a fragmented approach to booking travel is that it makes it very difficult to manage travel since a company won’t receive a unified report showing where the money is being spent.  It also means that one is less than likely to know where each traveler is at a given time.  And the individual traveler may not even have all of the information in one place unless he/she is using a third party application like TripIt, which can compile all the information.

By using Christopherson Business Travel, a traveler and/or a company can avoid some of these pitfalls.  If a company opts for online booking, we have online booking tools, if a company wants to do a combination of online and full service, we can handle that.  And if a company wants their travel managed, we can do that.  In addition to having online booking tools, we offer an array of tools that help companies and individuals manage their travel, including TravelAcumen and Airportal, as well as our partnership with Tripit.  For additional details, contact Christopherson Business Travel at 801 327 7700 or your account manager.

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