As an Account Manager for Christopherson Business Travel, I’m often asked by our clients’ travel managers: “Why is it, when looking for a flight, that the price can change within minutes of purchasing the fare?”
Cost of airfare has the potential to impact both the traveler and the company. At the point of purchase, the traveler is trying to juggle getting both a reasonable fare and their schedule to align before the ticket price changes. And quite often, it’s the cost of airfare that pushes travel expenses over budget, thus impacting a company’s bottom line.
I like to compare purchasing airfare to buying stocks. The price of stocks and the price of airfare is not fixed and can change in less than a minute. Airlines rely on computer modelling to track sales and adjust fares accordingly as often as they want, just like the price of stock is adjusted depending on demand and the current economic and political climate. These variables, in addition to the following factors, can all influence the price of airfare:
- Passenger load
- Competitor pricing
- Peak travel dates, holidays, and seasons
- Fluctuating fuel costs
- How much a traveler is willing to pay for a seat
Airlines will also often raise the prices on flights that have a higher percentage of business travelers vs. vacation travelers. They base this on the comparison of:
- Flights with a high rate of last minute bookings, which tends to be an indicator of business travel clients vs. flights booked well in advance, which tends to be an indicator of vacationers who have been planning for months
- Short-haul flights that business travelers can make in one day vs. vacation travelers who would more likely drive, instead of fly, that same distance
- Travel dates during the work week vs. travel dates over a weekend
How can a Travel Management Company help businesses and their travelers when airfare is so unpredictable?
Travel Management Companies have the ability to leverage all of those price-driving factors to keep costs down and help the traveler make well-informed trip-driven choices. Here are some of the ways we, at Christopherson Business Travel, accomplish this:
- Supplier negotiations
- Analyze program leakage
- Create and manage travel policy
- Facilitate the duty of care for a company’s travelers
- Assist in educating the traveler
- Ability to track that the lowest fare was indeed offered to the traveler and the reasons why/if it was refused
To learn more about how Christopherson Business Travel can help your company find the most cost-effective airfares for your business travel needs, please contact one of our executives.
