Business Travel Travel Industry Travel Management

ECONOMY FARES: Savings vs. Restrictions

As a business travel manager/planner, are you willing to purchase non-changeable airline tickets without seat assignments?

Highly restrictive airline tickets are usually more appealing to leisure travelers because of the lower price point, but as companies look for ways to reduce travel spend, many travel planners and managers are wondering if they ought to mandate that their road warriors travel on these restricted tickets, such as Delta Air Lines’ Basic Economy fares.

But what if the business trip plans change? Is the price of these airline tickets so appealing that they’re worth throwing away? And what about not having advance seat assignment? These are questions worth asking before making such changes to a company travel policy.

Delta launched Basic Economy fares in 2012 in specific markets where they were competing with other low cost carriers. Most of these markets were Florida destinations, where there was a significant amount of leisure travel to those cities. Fast-forward to 2015, and while Delta’s Basic Economy fares are still only available in limited markets, they have announced that these fares are no longer eligible for paid or complimentary First Class, Economy Comfort, or Preferred Seat upgrades regardless of Medallion status. Additional restrictions are outlined here:

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Many corporate travel managers perceive that Basic Economy fares will provide significant savings for the company’s travel budget. To assist in determining whether the savings are significant enough to match the restrictions, here are three examples and the fare differentials for comparison (source: Worldspan; February 16, 2015).

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Certainly, all travelers need to be mindful of spending corporate dollars wisely. As a business traveler who also assists companies in optimizing their travel budgets, establishing policies, and managing travel programs, I have seen firsthand what happens when companies handcuff themselves to so-called “money-saving” policies with excessive restrictions. Unfortunately, the results can be paltry savings in exchange for trip flexibility, convenience, and traveler satisfaction.

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One Company Finds that Travel 2.0 Doesn’t Save Money

I have blogged before regarding the topic of Travel 2.0:

travel 2.0It is certainly a hot topic with varied issues, differing opinions, and supposed ramifications.

But another stark example on the side of “why Travel 2.0 doesn’t work” was reported last week in a Business Travel News article about the company Autodesk, and their recent challenges with travelers who continually respond to their travel manager with those famous last words, “I can find it cheaper myself online than through our travel program.”

After 30 days of Travel 2.0, Topaz International performed an audit on Autodesk’s travel expenses. Results showed, that when it was all said and done, Autodesk was in fact, not saving money with Travel 2.0 and the value of a managed travel program was confirmed.

I couldn’t help but think as I read the report: “Well, that’s another point on the side of managed travel over open booking with Travel 2.0.”

What are your thoughts? Do you think a managed travel program is worth the investment in the long run? Or do you think Travel 2.0 is the best option for companies?