In most other businesses, going to the biggest supplier of the product you want to buy can fetch you deeper discounts, because they have the biggest buying power with the suppliers of the raw materials they need. But does this theory stand true when it comes to buying travel? UNIGLOBE experts bust the myth.

The big guns in the travel management industry would like you to believe that the size alone translates to the best prices & rate. On the contrary, buying power alone isn’t the magic for cost savings. Its actually buying power plus multichannel sourcing plus timimg saving that equals to overall cost savings for organizations. Why?

Shattering the big buying power myth in business travel

All travel suppliers have limited stock, so it doesn’t matter if you can deliver 1,000 room nights every day to a hotel if they only have 200 rooms. Nor does it matter if you can put 300 people on a flight every day if the plane only has 150 seats. Travel suppliers can’t quickly pop out and buy more raw materials to satisfy the demand.
 
But on the flip side, travel stock is perishable

A hotel can’t sell a room today for past night, and an airline can’t sell a seat on a plane that has already departed.
So we do see discounting in travel, but it’s not typically driven by huge buying power - it’s driven by those who can see and access all booking channels.
 
So, why wouldn't business traveler always get the best rate as we all know they are often the last minute bookers?

Travel suppliers know that business travellers are less price sensitive, and therefore are keen to keep prices higher for them no matter when they book. Traditional travel agencies who only source their travel content through the GDS (Global distribution system) make it easy for suppliers to show only higher fares & rates. It conveniently enables travel suppliers to perfectly segment the market place: dump heavily discounted prices out through the online channels, safe in the knowledge that most old school travel agencies wont check all channels.
 
What’s the solution?

Utilize the services of a Travel Management Company (TMC). Unlike traditional travel agencies, a TMC has access to all channels. They have the smartest travel booking and business intelligence tools that aggregates content from around the web, plus the content available on GDS. This counteracts the suppliers’ attempts to segment the market by channels. The best TMC’s have the power of online+GDS+private fares+contract fares to benefit your business travel program.


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