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As air travel demand returns from pandemic lows, key business destinations are experiencing total flights and stubbornly high hotel rates. This has put corporate travel and procurement heads in a tricky position as 2024 business travel volume discussions with suppliers kick off this quarter.

According to the Global Business Travel Association (GBTA) data, 2023 is set to see travel volume rise to 80% of pre-pandemic levels. However, while this indicates a healthy rebound for the global economy, those responsible for managing corporate travel budgets are increasingly concerned about potential long-term cost implications and managing the travel program effectively.

A comprehensive survey by GBTA, the authoritative voice of the global business travel industry, and HRS, the leading worldwide corporate lodging and payment technology platform, reflected these issues. Both organizations published a joint report titled “The Power of One: How Breaking up Silos can Drive Value in Converged Hotel Program Management.”

The report delves into the current negotiation landscape with air and hotel suppliers and sheds light on new findings. It reveals opportunities for corporate programs to enhance transparency, optimize their lodging segments through convergence, and grasp new operational trends impacting travel expenses.

According to the survey, 77% of respondents found the negotiation environment tilted in favour of suppliers, while 55% reported difficulty securing favourable hotel rates over the past year. Securing discounts and enticing pricing from air and hotel suppliers has proven challenging for travel procurement leaders, with minimal confidence in the situation improving.

The survey results also demonstrated that European-based travel buyers faced notable challenges in the lodging sector, with 74% finding it “somewhat” or “very” difficult to secure favourable rates over the past year. This contrasts with 47% of North American-based buyers who expressed the same sentiment.

Despite these challenges, 84% of travel managers expressed their intentions to conduct hotel Requests for Proposals (RFPs) within the following year. HRS CEO Tobias Ragge acknowledged the power suppliers currently hold but expressed optimism in the evolving procurement landscape and the potential for corporations to maximize the value of their business to preferred hotel partners.

The research also highlights the benefits of internal collaboration to break down silos and improve program transparency. By employing a convergent approach to hotel procurement, travel programs can negotiate multiple products, segments, and services simultaneously or using the same technology. Most travel managers (54%) agreed this approach would yield more excellent process or savings efficiencies.

Furthermore, anticipated benefits of a more converged approach include consolidated data (70%), more excellent discounts (66%), process efficiencies (57%), and time saved on RFPs (57%). A significant 47% of travel managers believe a single platform for booking multiple segments would boost traveller satisfaction.

GBTA CEO Suzanne Neufang emphasized the importance of convergence in corporate travel management moving forward. By fostering collaboration with key internal partners, companies can achieve more value, cost savings, and efficiency, increasing satisfaction among business travellers.

The in-depth discussion of the survey findings will take place during a breakout session at the GBTA Conference in Dallas on Monday, August 14th at 11:00 AM, featuring GBTA Senior Research Manager Mark Sharoff and HRS Vice President of Procurement Consulting & Supplier Solutions Pauline Robin. The complete survey report can be accessed on HRS’ website and the GBTA Hub for GBTA members.

The survey, conducted between May 2 and 13, 2023, invited participation from GBTA members and non-members. A total of 251 responses were received from travel managers and procurement leaders based in Europe, the U.S., and Canada.