GSAIR 2023 36
“ However , we would also be wary of what ’ s happened with the airlines where they ’ ve increased fares when the price of oil has gone up , but not decreased them when the price of oil has come down . We have to be aware of pricing creep .”
Carol Fergus says that travel managers will need to manage internal expectations . “ Don ’ t expect prices to be flat or reduced . It would be naïve to think any operator is not going to pass on price increases in part or full .”
“ My job is to assess the market in each of the locations we place business and try and negotiate below market predictions / trends and also get as much value as I can .”
“ Our customers also want to know how operators intend to mitigate those increases , say by reducing energy or food waste , and how they can help . In real terms , that means us as a TMC advising them on the optimum day or time to travel , or how far in advance they should be booking to secure the lowest accommodation rate .”
That room rates will increase in the wake of increased energy costs is virtually certain . Whilst some corporates will try to negotiate their way out of accepting those increases , others will work with their suppliers to share the burden .
Suppliers need to be careful . Should energy prices fall , travel managers will expect to share the benefit too .
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Agiito ’ s Steve Banks says his clients are expecting accommodation providers to pass on some of their additional costs but to mitigate costs as much as possible .
Fig . 18 - How corporates expect operators will manage higher energy costs