The way corporate travel is being paid for and viewed within a company is changing. It’s all because business has less money and therefore has to be more careful about how and where they spend it. Travel doesn’t become any less necessary or important but it does need to be more cost-effective. The change in attitude is good news for serviced apartment operators.
At the heart of the relationship between the travel industry and business is RFP, or the Request for Proposal. Much like putting a contract out for tender this is the opportunity for travel businesses to offer their best deals for firms whose staff undertake a lot of business travel. It makes sense, when you think about it. If you’re regularly travelling to London for example, a long standing relationship with a London apartment provider will help develop a beneficial relationship for both sides.
In an RFP hotels and airlines will offer their best price in order to get the regular business. But that’s changing as firms think about how they can source travel services that fit into their more cost-effective mind-set. Corporates will be used to booking a mandatory seven night stay with a supplier. They want to make sure they’re getting value for money and often it serviced apartments that are winning the battle.
Control of funds and tracking is what is hitting the corporate purse more and more. It’s what businesses are calling cost reduction or cost avoidance. In a report by the Travel Intelligence Network they quoted a survey by CWT which asked 178 travel managers what their priority was in terms of business travel. 59% said they wanted to optimise hotel spend. 56% said they wanted to make easier bookings. Making it cheaper and easier to do, basically.
AirPlus International conducted a similar survey looking at the elements of business travel that cost money; like the airline, hotel and car rental. Of the corporates they surveyed it was the hotel where they were looking to make the most of their savings.
The impact of the economic downturn on the travel industry is clear. To be considered for and selected post the RFP process, serviced apartment providers need to make their offerings clearer and spell out where cost savings can be made. Serviced apartments are not designed for short stays. Considerable cost savings can be made on longer stays i.e. 7+ nights, but it’s not just the nightly rate that businesses need to consider. It’s the ancillary costs too that would be incurred when staying in hotels, services such as Wifi, F&B and laundry bills. Substantial savings can be made in these areas as a serviced apartment typically offers guests a fully equipped full kitchen, washer dryer and Wifi, all included in the rate. It might be austere in terms of budget but if corporates are more informed and recognise the true benefits, better informed decisions can be made during the RFP process creating flexible, cost effective and sustainable programs appropriate and matched to the varying travel needs of the business.
In terms of ease of process there needs to be a responsibility taken by London apartment providers to make it simpler to book. If they want to be considered a viable partner and accepted on travel programs they need to minimise obstacles to booking. So working with self booking tools (SBTs), GDS and facilitating online booking as well as working directly with Procurement and Travel Management Companies (TMCs); all goes to making it much simpler for businesses to understand the true benefits of serviced apartments and facilitates long lasting relationships.