Are Preferred Suppliers a Thing of the Past?
It's common understanding that corporate managed travel programs require the use of preferred suppliers. After all, isn't that the purpose of corporate-supplier negotiations – to obtain special rates for the corporation, and guaranteed business for the supplier? But in reality, the consistent use of preferred suppliers is likely lower than we think. A recent Phocuswright survey of 2,300 U.S. business travelers found that fewer than half of those governed by a corporate travel policy always use preferred suppliers for car rental, air or hotel. And only about one third said they usually adhere to policy when choosing a supplier.
Sure, this means that 80% or so of managed business travelers always or usually stay within policy. However, looking at this another way, more than half of them have "gone rogue" at least once to book a non-preferred supplier – and nearly 20% have done it most or all of the time.
So how do they get away with it? Nothing is really holding them back. Only about 10% of managed travelers said they won't get reimbursed if they book outside of policy.
Bottom line: Companies will keep negotiating special rates with suppliers, but travelers will often choose price or convenience first. With more corporations looking to cut travel costs, expect travelers to continue to make their own decisions going forward. That's OK, since only a few are forced to book certain suppliers anyway.
ABOUT PHOCUSWRIGHT INC.
Phocuswright is the travel industry research authority on how travelers, suppliers and intermediaries connect. Independent, rigorous and unbiased, Phocuswright fosters smart strategic planning, tactical decision-making and organizational effectiveness.
Phocuswright delivers qualitative and quantitative research on the evolving dynamics that influence travel, tourism and hospitality distribution. Our marketplace intelligence is the industry standard for segmentation, sizing, forecasting, trends, analysis and consumer travel planning behavior. Every day around the world, senior executives, marketers, strategists and research professionals from all segments of the industry value chain use Phocuswright research for competitive advantage.
To complement its primary research in North and Latin America, Europe and Asia, Phocuswright produces several high-profile conferences in the United States and Europe, and partners with conferences in China, Singapore and the United Arab Emirates. Industry leaders and company analysts bring this intelligence to life by debating issues, sharing ideas and defining the ever-evolving reality of travel commerce.
The company is headquartered in the United States with Asia Pacific operations based in India and local analysts on five continents.
Phocuswright is a wholly-owned subsidiary of Northstar Travel Media, LLC. (116 32nd Street, 14th Floor, New York, NY 10001 United States). www.phocuswright.com
ABOUT NORTHSTAR TRAVEL GROUP
Northstar Travel Group is the leading provider of business-to-business news, information, data, transactions and custom content solutions for the travel, meetings and hospitality industries. Brands under the Northstar umbrella include Travel Weekly, Travel Weekly China, Travel Weekly Asia, TravelAge West, Business Travel News, Phocuswright, Meetings & Conventions, M&C China, Web in Travel and Inntopia. Northstar is the industry leader in marketing solutions, custom content communications, content licensing and database management serving the travel and meetings industries. The company produces more than 52 face-to-face events, taking place in North and South America, Europe, Asia and the Middle East. Northstar is based in Secaucus, NJ, and is a portfolio company of EagleTree Capital. www.northstartravelgroup.com
Eugene Ko
Sr. Manager, Marketing and Communications
+1 646 380-6273
Phocuswright
