GUEST BLOG: Prepay versus postpay

The problem with business travel – particularly hotel stays – is that there’s too much choice. Not just concerning the inclusion of breakfast, airport transfers, and proximity to company offices/conference venues – but how the darn thing gets paid for.

We can pay online, in person, on arrival, at checkout, or have someone else handle it completely. Actually, when you think about it, you can group these into two primary transaction types: Pre-Pay and Post Pay.

There are many differences between the two types: in terms of the cancellation policy, changes flexibility, cost, and operational process. Let’s take a closer look…

Post Pay

When the business traveller pays at the hotel at the end of their stay. The company or travel agent just put a credit card up as a guarantee.

Main Advantages

• You can usually cancel post pay bookings at the last minute.
• Post-pay bookings are usually more flexible: so if a traveller needs to shorten his stay while he’s already there, it’s usually not an issue.
• Payment isn’t taken until the visit, which can be easier on companies’ cash flow.
• Employees can use their travel credit card and earn points as part of a hotel loyalty program.
• Reclaim VAT. The invoice is issued from the hotel directly to the business: meaning the company can claim for a VAT refund

Main Disadvantages

• The employee uses a company credit card or submits the cost via expense report.
• Some employees might not be crazy about having a £2,000 charge on their credit card bill.
• Post-pay rates tend to be more a more expensive option

Pre-Pay

The company pays for the hotel before the traveller arrives. A voucher is issued which the traveller shows during at check-in.

Main Advantages

• Employees don’t pay at the hotel (company pays directly).
• Usually more competitive rates than Post Pay.
• No need to reimburse or issue a credit card to employees.

Main Disadvantages

• Usually more restricted cancellation policy: you can cancel up to 48/72 hours before the check-in date.
• Less flexible in terms of changes: some rates even prevent a guest name change and most won’t let you shorten your stay (though often this depends on the hotel booked and the rate paid).
• Sometimes employees have problems claiming their loyalty points. Since the room was booked through a 3rd party and not directly with the hotel, some hotels will not consider their stay as valid.

While different companies and individuals will have their own preferences, Arbitrip offers the benefits of both: the flexibility of Post Pay with the cost savings of Pre-Pay. You simply set a budget and our matching algorithm finds the right kind of hotel for your stay and re-books it when a better deal becomes available.

This blog was posted by Assaf Haski, VP Business Development, Arbitrip, who are exhibiting at the Business Travel Show next week. Please register for your free visitor pass at https://www.businesstravelshow.com

GUEST BLOG: Why SMEs should demand more from their travel programme

For many companies, business travel is a regular requirement and essential to success. But do you understand the true cost of travel to your business? Are you paying the price of a poor travel strategy? If you are struggling with your travel programme, you’re not alone. Many of our clients come to us feeling daunted because they don’t have a strategy in place or they want to build a better travel programme that can help save them money. This is where the support of an account management team can help SME clients demand more from their travel spend by identifying more savings and providing greater insights into their overall travel programme.

More savings

Are you saving as much money as you could on hotel rates, for example? Where is the biggest part of your budget going and in which locations? By consolidating hotel spend via bespoke negotiated hotel rates, our account managers can save our clients 15% on average in the first year of their hotel programme. They also analyse where employees are staying, group bookings and length of stay. If a client has 100 room/night bookings or more a year, then there is huge potential for us to negotiate major savings. By establishing strategic partnerships with hotels, an account manager can resolve ad-hoc issues and will also have the inside scoop on waivers and favours, such as room upgrades.

More insight

When you consider all the different variables of booking travel - different hotel room rates, flexibility of air fares, online booking vs over the phone, how far ahead you can book - achieving a smooth process - while catering for every individual – is no mean feat, and you’ll need to be on top of everything to make it work. Your account manager is an expert in interpreting data. With their reports to hand, you’ll be able to evaluate your booking patterns to see where bookings can be made further ahead, in a different class of travel or on a more flexible rate. Invaluable insights like these will ensure you continue making the right decisions for both your employees and your travel budget.

More duty of care

Insight isn’t just about saving money.  It’s also about the importance of staying connected with your employees when they are on the move, to ensure their safety and wellbeing is being considered. Again this is where an account managers can provide support, for example by evaluating your travel programme and helping you judge if your travellers’ wellbeing would benefit from cabin upgrades; or implementing Traveller Location Mapping so that you know exactly where your people are; or recommending implementation of the new chatbot interfaced mobile app for business travellers that we are unveiling at the Business Travel Show.

Strategic advice is invaluable, but one plan doesn’t fit all, so it makes sense to demand more when it comes to insights, savings and service around your business travel programme.

This blogpost was written by Andy Hegley, UK General Manager, Corporate Traveller (www.corptraveller.co.uk). Visit stand B30 for demonstrations of 'Sam' – the company’s new chatbot and AI integrated mobile app supporting SME travellers on the move.