Price is still king when it comes to corporate travel, but queen comfort is a powerful consort.
I was speaking to a friend of mine last week about his corporate travel policy. He works for a software company in the Bay Area and his travel booking system actively blocks United…this policy began after the Dao incident. If he wants to fly United, he must seek special permission.
The system also blocks Basic Economy fares on Delta and American so that he doesn’t even see them when searching for domestic or international travel.
And it seems he is not alone. Julie Weed of the New York Times just published a story on precisely this matter. As airlines woo corporate contracts, price alone is not enough anymore.
I think Alaska Airlines’ David Oppenheim, vice president of sales, summed up the new trifecta nicely:
[F]light schedules to take them where they want to go at the right time, great value for their company that pairs with a great experience for their travelers as well as special benefits for their corporate travelers that take some of the hassle out of flying.
And perhaps that is blatantly obvious. But what other perks really matter? Alaska has special check-in lines for Microsoft and Amazon in Seattle. That’s nice, but don’t we all check in online now?
Southwest has more than doubled its corporate travel staff from 30 to 80. The carrier is offering more customized travel packages based upon specific company needs. Other airlines are doing the same.
And it’s true, boarding early, lounge access, and upgrades play a huge role in impacting loyalty.
The Tension
Corporate travel policy varies by company, but at my friend’s company the “preferred carrier” is Delta, though nothing stops him from booking on American or Alaska, even on routes in which Delta offers nonstop service. Delta is nothing more than a recommendation. Other companies have stricter travel polices. That makes the corporate travel battle two-front for airlines.
For companies with a looser travel policy, airlines must woo the employees. For companies with a tighter policy, airlines must woo travel managers. Making both happy is sometimes mutually exclusive, like in the instance of offering miles to the company versus individual travelers.
CONCLUSION
My point is simple: it’s not just about price any longer when it comes to corporate travel. While price is still the most important factor, price alone is unlikely to win contracts any more. That’s quite a development.
My problem with corporate travel (besides the obvious Concur issues on booking and the expense report side) is the preferred partners. My company has a handful of “preferred hotels” mostly in places like downtown NYC, Chicago, etc. So when I book the Super 8 out in Western Nebraska it flags it as outside of policy and sends a note to my boss and includes it into an annual report that our C level folks review and run back down to ask why.
In addition our travel folks are a nice bunch but most don’t travel on company business or not much. We have outsourced OTA but our own staff manage the preferred partners, meeting arrangements, etc. but have little idea of what or how business travel works on the ground. Much like our company car fleet managers that have never seen one of our fleet cars.
Our OTA via Concur self service booking engine blocks any hotels that require prepay so when I work in Las Vegas I cannot book most strip hotels which most of the time isn’t an issue for me but can be at times. They also don’t show basic economy, thankfully.
Our company has a policy that you cannot book first or business class unless it’s international long haul. Which would be fine but sometimes there are domestic fares in first for less or a few bucks more that would save on meal cost and allow more work to be done during the flight not to mention free checked bags.
Oh did I mention that I don’t like Concur btw 🙂
@DaninMCI: Why do I see lots os similarities between your article and what happens to me everyday? 🙂 I talked to my boss the other day that we probably should invest some time and money so people that help us book our travels can travel at least once and see what real life is. Your point about not knowing how things work on the ground is perfect. They save pennies by booking a rental car that is not at the terminal. They book a cheaper car that does not fit all passengers. They book a cheaper hotel that is sometimes is miles away from our meting place. How about a short connection when you land on a regional jet where sometimes you walk on the tarmac but you are then going to an international flight that leaves from the other way of the airport. In sum, they have zero clue about travel.
@Matthew — I book my employee’s travel, and I would never booked him into E-. In fact, I will use a regional upgrade if I have an extra one to upgrade him from E+ to F on a transcon.
Agree and disagree with your comments above. I worked for over 15 years for two top multinational companies. The travel policy was to use the company designated software to book all travel. There were preferred airlines but me an employee I would not see the behind the scenes discounts agreed between my company and the airline. I would still book and pay the same price as I were going to the airline website but at the end of the year there was some sort of rebate back to the company from the airline. For hotels and rental cars the negotiated price was clear on the booking system. Problem I faced with those software system was that most of the times the suggested flights were not the most optimal ones. Yes, it is cheaper for me to fly with a connection than non-stop but is that efficient and the best use of my time? At the end I always had to ask for exceptions to book what I needed. Now I work for a smaller company and I book my flights direct on airlines website. I usually go for convenience rather than price or airline. For example, I would rather fly an European or Asian airline rather than a US airline but flying non-stop for me makes a huge difference. Thus, I chose convenience vs price if I can.