Concur analysed the varying costs of booking travel at the eleventh-hour and the impact on firms’ travel budgets
Expense and travel management specialist Concur analysed the varying costs of booking travel at the eleventh-hour and the impact on firms’ travel budgets
The hectic pace of business inevitably leads to some last minute travel. According to a Concur report released last year, these eleventh-hour booking can be a tough hit to your bottom line.
Consistent with our data, tickets booked less than seven days prior to departure average 44% expensive than the same ticket booked 15 days in advance.
Building on the 2016 findings, we analysed historical domestic business travel data to explore patterns in last minute travel across the globe, specific industries and different age groups to help businesses make smarter decisions about travel policies, budgets and processes that save time and resources.
Our booking windows include zero to three days, four to seven days, eight to 14 days, and more than 15 days out.
Last-Minute Ticket Prices Vary by Country
As our previous analysis shows, ticket prices increase the closer you get to travel dates. However, price increases on last-minute travel vary greatly from country to country.
In the US, cost premiums on domestic travel booked less than eight days in advance are highest. In 2016, travellers who booked at least eight days in advance paid 39% more than the same ticket booked 15 days in advance.
Travellers can also expect high premiums in France (27%) and Canada (19%). And on the flip side, there is no premium on last-minute travel in the UK. Here, prices average 3% less than a similar ticket booked in advance.
While several variables could influence these trends, all UK air travel is essentially international so the price change dynamics for domestic travel are unique when compared to other countries with larger domestic travel markets.
Global Trends in Last Minute Travel
Our analysis uncovered notable differences in booking patterns across the US, France, and Canada.
All three countries experience an uptick in early bookings in advance in December, when travellers are likely planning around holiday schedules.
In addition, France experiences a dramatic spike in booking in advance in August, likely due to trips booked around upcoming holiday vacations.
By comparison, our analysis in 2016 found that premiums on last minute travel in the US+ are highest in January and August.
The best month for last minute travel in the US is June, when premiums average about 8 percentage points lower in comparison to the overall flight costs.
Low premiums on last minute travel still come with a price: general ticket prices in June are 9% more expensive on average.
Traveller Booking Timelines Vary by Industry
Travellers in the higher education industry are the best when it comes to early planning. In fact, they are twice as likely to book trips at least 15 days in advance.
Only 31% of higher education travellers book less than 15 days in advance.
By comparison, professional services, retail and restaurants represent a higher percentage of last minute travellers.
The volume of last minute travel is higher in business services, which can likely be attributed to client meetings and activities that more difficult to anticipate in advance.
Fare Increases by Fare Class
As the chart below shows, fare increases vary by fare class. Interestingly, economy and economy premium ticket prices increase more than premium ticket prices in the eight to 14-day window prior to a trip.
Although all fare classes continue to increase in cost in the seven days leading up to a trip, the rate of increase in economy premium tickets slows.
As a result, travellers could benefit from cross-referencing tickets in different fare classes before booking travel during this timeframe as the relative price premium shrinks (if allowed by their corporate travel policy).
Millennial, GenX and Baby Boomer Traveller Trends
Although strikingly similar, the data also shows subtle but interesting differences in traveller behaviors across different age groups.
For example, Baby Boomers (age 49-65) book just 3 percent more of their tickets more than 15 days in advance than Millennial (age 22-35) workers.
This point becomes more interesting when compared to the fact that Baby Boomers book 4% less travel in the final week leading up to a trip.
While the differences are minor, this may point to differences in roles and booking behaviors across age groups – for example, younger travellers may have more meetings with less advance notice (e.g., road warrior consultants) or may be less aware of fare increases as departure date nears.
By comparison, our recent report on generational trends in corporate travel and expense found that Millennials are more budget-conscious with some expenses than their colleagues.
Millennials spend 18% less than GenX (age 35-49) and Baby Boomer employees on dining and entertainment (approximately $44 per transaction compared to $52) and $33 per meal when traveling compared to GenX and Baby Boomer employees that average $39.
You Can Find Saving, Even When You Need to Book Last-Minute
Armed with travel spend data and insights, we offer the following tips to help businesses keep costs down and improve efficiencies.
• Implement travel policies that encourage employees to book at least eight days prior to departure. On average, businesses can save $148 per ticket by adding such a guideline. We recommend rewarding employees who continuously adhere to the business policy.
• Offer trainings on a regular basis to educate employees and empower them to make smart, cost-friendly travel decisions. This can help bridge the gap with young employees who are new to corporate travel – or arm seasoned travellers with new ways to travel smarter. Cost-saving tips to offer employees include:
o Compare fares at regional airports. For example, if you’re traveling to the San Francisco Bay Area, consider the Oakland and San Jose airports. Employees can occasionally find greater savings, but of course, it’s also important to factor in incidental costs like increased taxi or rental care services.
o Beware of incremental add-on fees such as seat upgrades and checked luggage fees. These little things can quickly add up.
• Avoid a one-size-fits-all approach. As the data shows, last-minute travel trends vary from market to market and industry to industry. In fact, what works in one part of the company could require closer supervision in another. Consider:
o Reminding travellers to plan ahead during September and July, when last-minute travel is more likely.
o Customising travel policies by region.
o Comparing trends across departments and teams.