All in the timing
With SMEs under increasing pressure to keep costs down, knowing when to book and when to travel is more crucial than ever, says Bev Fearis
Did you hear the one about the business traveller who called up his TMC and asked for a return ticket. “Where to?” asked the consultant. “Right back here,” came the reply.
Like the execution of this joke (the best of a bad bunch of business travel-related jokes I could find on Google, and trust me I tried), timing can make a big difference when it comes to getting the best prices for flights, hotels and other trip expenses.
Although it’s not always possible to pick and choose when a trip is taken, or when it’s booked, if either of these is flexible there could be substantial savings to be made.
Get it right and you’ll be laughing all the way to the next meeting with your finance director. Get it wrong and you’ll be heckled out of the boardroom.
Waiting in the wings
Unfortunately, it seems there’s no magic formula to knowing precisely the cheapest time to book air travel, but based on the experience of a number of industry experts, there are some general rules.
“Looking at the most recent data from Advito’s Airfare Predictor tool, as a guideline we recommend booking 14-plus days in advance for domestic trips and 21-plus days for international,” advises Ryan Hohag, Managing Consultant Advito Air Practice. But he warns: “There are, perhaps not surprisingly, many exceptions and nuances to this guideline.
“The optimal booking window can vary by region, origin and destination, airline, cabin, day of week and a myriad of other external factors influencing supply and demand in the air industry.”
Agiito Head of Customer Insight, Lone Konradsen, says for UK domestic flights, booking lead time is the main influencer of price. “The sweet spot is booking 15-plus days out, where flights on average are 33% cheaper than booking within two days of travel,” she says.
“However, as a minimum try and book seven or more days before travel as the price rises steeply after that point.”
“The time to book is when you know what your plans are. If you leave it longer, the price may change, but you can’t be sure whether it’s going to go up or down”
For European flights, she recommends the same 15 days-plus lead-in time, when fares can be up to 45% cheaper, but points out that with international flights it’s not so clear-cut. “There are a lot more factors to consider, such as choice of airline and class of travel,” she says.
Data crunching by airfare and hotel rate tracking specialist TRIPBAM found that, broadly speaking, a significant amount of savings are found by booking flights 21 days or more in advance.
Many TMCs argue that the rule for air fares is simple: booking travel as far in advance as possible will give you the best chance of keeping the cost down.
Scott Pawley, Managing Director, Global Travel Management (GTM), advises: “The time to book is when you know what your plans are. If you leave it longer, the price may change, but you can’t be sure whether it’s going to go up or down.
“The risk of delaying booking is greater on long-haul flights than short haul, as the price increases can be significant on longer flights. In our experience, nobody ever says ‘I’m glad I waited’.”
Spencer Allen, VP Client Solutions, TakeTwo, says for long-haul flights it sees savings upwards of 60% on fares booked in advance, with average savings overall more than 20-25% across a typical corporate air programme.
“Currently for European flights we are showing on average a 34% reduction in average ticket price comparing bookings made zero-seven days in advance to bookings made 14-plus days in advance,” he says.
Using the same time frame, UK domestic flights are showing, on average, a 19% reduction and on international flights the figure rises to 52%.
The higher the fare the bigger the potential saving, so the benefits of booking early can be even greater for premium classes.
“Booking Heathrow to New York return when the flights are released would cost around £3,000 return, against booking three to four weeks before your travel date when you could be paying upwards of £8,000 return,” says Abby Penston, CEO of Focus Travel Partnership.
“However, it’s also essential to keep an eye out for special promotions or fare sales that airlines may run throughout the year. Carriers implement promotional fares when they need to boost a route. Last-minute deals can sometimes offer attractive prices, but they might not be suitable for travellers with fixed plans or specific preferences.”
Of course, business trips don’t always go to plan, so travel managers need to weigh up if it’s worth paying more for fares with greater flexibility to allow for any possible changes and cancellations.
“We help clients make these decisions by looking at their percentage of changed bookings,” says Angela Marston, Account Manager, Gray Dawes Travel.
“If a client doesn’t have a high rate of exchange tickets, it may be prudent for them to book more restricted tickets and take the hit on any penalties rather than pay more to purchase fully flexible every time and never use the benefit of the flexibility.”
“The optimal booking window can vary by region, origin and destination, airline, cabin, day of the week and a myriad of other external factors”
Pawley at GTM believes in most cases it’s not worth paying the extra. “Nine times out of 10, I would recommend going for the lowest fare which allows you to make changes at a cost. Don’t be afraid of a cheaper fare.”
Allen at TakeTwo says an advance purchase booking, even factoring in change fees and additional collection, can often work out cheaper than purchasing fully-flexible tickets.
“Our studies have shown that travellers who request a fully-flexible ticket generally stick to their chosen flight times in more than 80% of cases, negating the need for a fully-flexible fare,” he argues.
Advito’s Hohag says post-pandemic the gap between refundable and non-refundable ticket prices is shrinking.
“The conventional wisdom around best practice in buying behaviour is not as reliable as it used to be. Airlines have eased fare restrictions to accommodate the increased demand for flexible and last-minute bookings and, depending on the airline, it is becoming more common for travellers to find flexible fare options much further down the fare ladder.
“We have seen instances where that price gap is smaller than the change fee, which means some travellers may ultimately be better off booking the refundable fare.
“It’s important for travel managers to understand how often, and in which markets, they are likely to incur more change or cancellation fees and to weigh the additional cost against booking behaviours in those markets, and to consider using price assurance tools to mitigate some of the risk,” says Hohag.
Another top tip, says Penston at Focus, is to book with an airline with a more frequent schedule. “That way if you do need to change you are more likely to get availability.”
TMCs also have the ability to hold flight options for a limited time, while other aspects of the trip are confirmed. “This allows a guarantee of the quoted fare and avoids risking a fare hike as availability reduces and the lower fare classes are reserved,” says TakeTwo’s Allen.
Data specialist Travelogix recommends analysing past travel data to identify patterns and common reasons for last-minute changes.
“Understanding the trends can help you make more informed decisions in the future and potentially anticipate changes in your travel plans,” says CEO Chris Lewis.
He suggests corporates use this data when negotiating with preferred suppliers. “These agreements can often include more favourable change and cancellation terms, as well as potential discounts for your organisation’s volume of business,” he says.
Front of house
While booking in advance is generally recommended for flights, the same rules don’t apply for hotels.
“The greatest amount of savings can be found by waiting as rates tend to drop the closer you get to check-in,” says Juliette Jackman, TRIPBAM Head of Business Development EMEA.
“For hotels the greatest number of lower rates are found in the three- to five-day window before check-in.”
Changes to travel plans rarely occur on the day of check-in, she adds, “so there is little value in having a same day of check-in cancellation policy. Better to pay a lower rate for a stricter cancellation policy than accept a higher rate for the flexibility”.
“Nine times out of 10, I would recommend going for the lowest fare which allows you to make changes at a cost. Don’t be afraid of a cheaper fare”
Ambra Christie, Vice President for BCD Travel Hotel Solutions, points to a shift in the last few years. “We’ve seen a real trend towards lower average booked rates achieved by booking last minute,” she says.
“While this will not always hold true, on average we note the booked rate is approximately 14% lower globally when booked on the day of check-in versus booking three weeks or more in advance.”
According to BCD’s rate analysis, the highest average booked rate is actually for reservations made between 15-21 days in advance – 15% higher than when booking on the day of check-in.
“Our booking and shopping data includes rates from third party suppliers, such as booking.com and Expedia,” says Christie.
“It’s through these hotel booking aggregators where we tend to see the lowest rates being distributed as the check-in date nears, with hoteliers unloading distressed inventory at their lowest rates.”
But she stressed that in Europe, the patterns are “more of what we would traditionally expect” with average rates getting progressively lower the farther in advance the booking is made.
Lack of supply in some European cities, including London, restricts potential savings because hotels are able to hold firm on their rates. But in others with higher supply, such as New York, savings can be found.”
“The best booking windows varies by location,” agrees TRIPBAM’s Jackman.
Take your cue
Location is even more of an influencing factor if you’re looking to use the timing of your business trip to cut your travel costs.
“If you’re travelling for business to a place that’s also a leisure destination, then avoiding those tourist seasons would help lower costs,” suggests Jackman.
“Travellers can save hundreds of pounds by shifting their hotel booking dates to avoid high tourist seasons.”
Factors such as school term times and climate, which influence leisure travel, might not matter as much for business travel.
Penston at Focus gives an example: “Flights to Dubai are way cheaper during the UAE’s very hot summer months (May to October), when air fares and hotel rates drop dramatically, compared with November to April.”
Shifting the days of travel and trip duration can also help reduce costs.
“Don’t travel out on a Monday and back on a Friday for a US trip as many airlines still operate the Saturday night stay rule,” says Penston. “If you can travel out on a Saturday and back on the Friday, the air fare will be less and the savings will more than cover the extra hotel nights needed.”
It could also be beneficial for that traveller’s wellbeing. “Flying on a Saturday before a Monday meeting would give them time to arrive and adjust to the different time-zone before the working week begins, and it also saves the company travel costs,” Penston adds.
However, an employee with family commitments may be unable to travel at weekends. “There needs to be a mutual give and take on both sides, to work together for the benefit of the business.”
“Don’t travel out on a Monday and back on a Friday for a US trip as many airlines still operate the Saturday night stay rule”
Allen at TakeTwo says in some cases, travelling a day earlier or later can more than halve the price.
“Including a Saturday night stay on most long-haul flights, particularly to the US, can significantly reduce the cost of flights, sometimes by more than 50%,” he says.
Booking trips during school holidays can also add a minimum of 25% or more to the trip cost, notes Pawley at Global Travel Management.
Based on historic data, TMCs will know the cheapest times to travel, down to the day.
Marston at Gray Dawes explains: “Hotel room prices peak on Tuesdays and Wednesdays due to demand, so we often suggest to clients that they have their meeting on a Monday or a Thursday. We share this information with clients based on market and in-house analysis.”
A good TMC will also know which major events are happening in a destination that would drive up prices.
“Prime examples are years when World Cups, Olympics and other major sporting or music events are being held in a particular city,” says Penston.