Meetings & Conventions: Newsline
Online Fares Undermine Contracts
A growing number of business travelers are
bypassing designated travel agencies to book cheaper flights
online. By doing so, however, experts say they could jeopardize
company air deals and ultimately lose money for their firms.
In a recent poll by the Business Travel Coalition, an advocacy
group based in Radnor, Pa., 69 percent of 403 frequent travelers
said they could find better fares online than through corporate
travel agents. Even agencies themselves, at clients’ requests, are
using the Web to book tickets. “Travel agencies complain about Web
fares, but 50 percent of agents have booked travel using Web
sites,” said Henry Harteveldt, a senior analyst for Forrester, a
Cambridge, Mass.-based research firm.
But it is often a false perception that business travelers are
getting better deals online, said Jared Blank, travel analyst for
the New York City-based research firm Jupiter Media Matrix.
“Travelers don’t necessarily see the rebates or volume discounts
received by a corporation,” he said. “By going out of the policy,
they aren’t really saving the company money.”
At American Express, corporate clients discourage travelers from
comparing agency fares to online offerings. Yet, with Web discounts
as steep as 60 percent, Amex plans to add a Web search capability
to its online booking system by August to give travelers who are so
inclined a tool to search for deals. In addition, GDS suppliers
like Sabre and Galileo plan to roll out systems to give client
agencies access to Internet-only fares. But some doubt the problem
of agency vs. Web fares will be resolved so simply.
Among the hurdles: Agencies are denied access to Web-only fares
like those on Orbitz. Also hurting agency business are transaction
fees of up to $50 per ticket, imposed to replace lost revenue due
to airline commission cuts.
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