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Yardstick Pricing In Business Travel

What is Yardstick Pricing in Business Travel?

Yardstick pricing in business travel is a cost-assessment strategy where companies measure their travel expenses against industry norms or competitor benchmarks. The purpose is to determine whether the business is paying more or less than the market average for flights, hotels, car rentals, and other travel-related services. By setting realistic benchmarks, companies can identify inefficiencies, negotiate better deals, and optimize their travel policies. Data for yardstick pricing is usually collected from travel management companies, agencies, or industry reports, helping businesses align their travel spending with best practices. This approach not only ensures cost savings but also improves supplier negotiations and overall budget performance.

Examples Of Yardstick Pricing In Business Travel
1.
Flight Cost Comparison
A Company Finds Its Domestic Flight Costs Are Higher Than Industry Averages And Negotiates Better Rates With Airlines.
2.
Hotel Rate Evaluation
Travel Managers Benchmark Hotel Rates Against Market Standards, Switching Providers Or Negotiating Discounts When Prices Are Above Average.
3.
Car Rental Expense Analysis
A Business Compares Rental Car Costs In A City Against Competitor Data And Shifts To A Preferred Provider Offering Lower Rates.
Frequently Asked Questions About Yardstick Pricing In Business Travel
1.
How does yardstick pricing help control travel costs?
It highlights areas where companies are overspending compared to benchmarks, allowing them to negotiate better deals and manage budgets efficiently.
2.
What sources are used for yardstick pricing comparisons?
Data can come from travel management companies, agencies, competitor insights, and industry reports to provide accurate market benchmarks.
3.
Can yardstick pricing be applied to all types of travel expenses?
Yes, it can be applied to flights, hotels, car rentals, meals, and other travel costs to optimize the entire travel program.
4.
How often should companies use yardstick pricing?
It should be used regularly—especially during contract negotiations, renewals, or annual budget reviews—to maintain cost control.
5.
Can yardstick pricing be used in negotiations with suppliers?
Yes, it provides leverage in discussions with airlines, hotels, and car rental companies, helping secure competitive rates and terms.