IBISWorld anticipates prices for corporate travel services to decline as competition among suppliers mounts.
Los Angeles, CA (PRWEB) November 04, 2013
Corporate travel services have a buyer power score of 4.1 out of 5. The higher the score, the more leverage a buyer has in negotiating a favorable rate. This score reflects a low-volatility market, where the average price of services has only grown at an average annual rate of 0.5% over the three years to 2013. According to IBISWorld procurement analyst Nikoleta Panteva, “the rising availability of corporate travel service providers is beneficial to buyers because they have an opportunity to shop around for the best rate when choosing a supplier." Despite a highly concentrated market, the number of corporate travel service suppliers is forecast to grow over the next three years. Competition among providers will mount, forcing individual suppliers to compete on price and service offerings to secure revenue streams. This is beneficial for buyers seeking these services.
Moreover, corporate travel services are discretionary and can easily be substituted with various alternatives, including online travel booking portals and dedicated in-house travel experts. The availability of substitutes is favorable for buyers because they can procure the services they need at the best possible price. The low price volatility also benefits buyers seeking corporate travel services by allowing them to more easily budget future travel needs, without having to adjust for drastic jumps in fees. “However, buyers should be aware of the volatile input costs (specifically oil, which drives the price of airfare), which contribute to fluctuations in the overall price of travel”, says Panteva.
Buyers needing specialized or dedicated travel services have less leverage when negotiating rates. Those seeking specific itineraries or procedures may be limited in the number of suppliers from which they can source, reducing their ability to switch providers to find better conditions. Additionally, the recent climb in prices (however small) is another area of decreased buyer power. Over the past three years, mounting downstream demand has caused suppliers to bump up their rates as the market has not yet reached saturation; competition has yet to intensify and set prices. The four largest players in the market are BCD Travel, Carlson Companies, American Express Company, and Travel Leaders Group.
For more information, visit IBISWorld’s Corporate Travel Services procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to help buyers of corporate travel services. Corporate travel service providers include travel agencies, tour operators, chartering firms and travel management companies that may research, arrange, manage and optimize the travel needs of corporations. Travel plans can be booked for individuals or groups and can include mode of transportation, accommodations, meeting space, car rentals, dining options and additional attractions. Corporate travel service providers may sell individual components of a tour package (e.g. only hotel accommodations); hotels, airlines, attractions and other service providers that are contracted by corporate travel service providers are not included in this discussion.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.