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Travel Management

 March 17, 2009
Corporates Beware The True Cost Of 'Low-Cost' Online Bookings: FCm

 Corporates being lured by travel websites promising 'lowest rates' are in some cases paying a higher price in the long term, according to global travel management consultancy, FCm Travel Solutions.

FCm has advised corporates to be aware of the 'real' cost of using online booking sites for air travel, hotels, car hire and rail travel, that require pre-payment in full and provide no flexibility on tickets.

FCm's executive general manager, Anthony Grigson, said in the current climate of belt-tightening, FCm had seen evidence of small to mid-sized companies believing travel websites offered the most cost-effective solutions.

"This may be tenable for companies whose travel plans never change. But for most this is not a realistic approach and some degree of flexibility is needed in their travel itineraries," he said.

"We have seen companies forfeit hundreds or thousands of dollars in lost room nights or air fares when their travel plans have changed, after booking and paying for tickets that could not be amended and were non-refundable.

"Every company is focused on value right now -- even more than before. However, value in travel doesn't come from buying what appear to be the cheapest tickets online. There are several factors that can push up the total cost of these bookings."

Mr Grigson said that while costs associated with booking changes were the biggest factor to consider, lost employee productivity was also a potentially significant expense.

"A business traveller or personal assistant can spend hours trawling the internet to find what they perceive to be the best rates, when not all available fares are displayed on the internet and there are hourly price changes. That's time and productivity impacting the real cost of the ticket and the company's bottom line," he said.

"There is also the issue of pinpointing the location of your travellers in an emergency -- which is part of any company's duty of care - and tracking what all your travellers are spending on their trips. Web bookings do not provide any of these benefits, which can be critical to overall expenditure.

"TMCs can take as little as five minutes to complete a point-to-point booking, while a corporate employee could easily spend an hour or more surfing the web to make the same booking. Furthermore, by tapping into our multiple fare sources and negotiating with suppliers based on volume, we can book world-best fares that are most suited to your business needs.

"Every booking is made under a policy designed to produce long-term savings, and we target every opportunity to streamline a company's travel activity, processes and suppliers. Cost control is achieved through extensive reporting and benchmarking, which provides total transparency."

Mr Grigson said companies using TMCs also had the peace of mind of traveller security services and 24/7 emergency assistance.

"Corporates need to ultimately weigh up whether they want short-term gains or long-term consolidation, which is value that can only be driven by strategic travel management with a holistic approach to their travel and purchasing activity," he said.