During the 20th century, the United States government exerted control over the airlines that did business in the country. This meant that airlines couldn’t expand in any way or even set ticket prices without governmental approval first.Until 1978, that is. That’s when the
Airline Deregulation Actcame into effect and with it, a new world of pricing. Airlines like Delta were slow to catch on and continued using a room full of people to manually set ticket prices for a long time — losing a great deal of money in the process.Soon after, a man named Bob Cross convinced Delta to invest in creating the systems that would support dynamic pricing, or using computers and algorithms to set prices based on demand, availability, and a whole host of other factors. In other words, this is what every single business now does when it comes to pricing in our digitally connected world.For airlines, hotels and all kinds of other businesses, dynamic pricing is a fantastic tool. For a travel manager, dynamic pricing is a pain. A flight ticket or hotel room that’s a bargain today could be priced at a 30% premium tomorrow, making it difficult to get the best price for your employees and your company.Static travel budgeting adds to the difficulty. Most
business travel planningis based on static budgets, and most suffer financially because travel is anything but static. Using it is like trying to run a marathon with a single leg: it’s just not enough.Let’s take a look at what static travel budgeting is, and what you can do to more efficiently manage business travel.