Corporate travel strategies in Latin America: to hub or not to hub?
In a region where most countries’ national language is Spanish, with the notable exception of Brazil, you might think consolidating your regional travel into one or two travel hubs would be best practice. In reality, the twenty countries that make up Latin America have distinct variances in currency, carriers, culture … the list goes on.
Here are three regional nuances to consider before you consolidate:
- In-country service matters. Latin America is a region that values personal relationships. While a great hub-based agent will do their best to provide excellent service everywhere, there will be local nuances they’ll inevitably miss – whether it’s knowing that local taxi service doesn’t accept cards, or that everyone in town on business stays at that niche hotel.
- In-country, in-currency invoicing following local fiscal requirements is also very important for tax and finance purposes. Taxes (VAT/IVA, etc.) paid on travel can be credited against a company’s annual corporate taxes, which means invoicing for each transaction is best done locally.
- Form of payment is a challenge. Particularly for mid- and smaller sized companies, it’s uncommon for corporate credit cards to be issued to travelers in Latin America. A high percentage of air tickets are charged to central billing BTA/ghost cards, and many companies expect the agency to prepay their hotel. The latter limits the types of rates an agency can book, as many must book through wholesalers or operators to enable pre-payment. This can result in lower online compliance and usage of your company’s negotiated hotels. Consider engaging your Finance team early to get their support on issuing plastic to address this challenge head-on. Virtual card issuance and acceptance by suppliers is still very new in the region, but will also be a future solution.
- Booking processes are less mature in some countries. While the use of local tools for online booking (OBTs) and pre-trip approval is common in Brazil, you’ll find a mix of regional and global tools in other countries, most with limited adoption rates so far.
- One of the reasons for the slow uptake has been, again, the emphasis on personal relationships – and travel bookers are still very common.
- That said, tech-savvy travelers and the convenience of 24/7 access to trip planning is driving change. Your travel management company can help you explore the right product options for your program. Keep in mind, form of payment will affect whether GDS-based negotiated hotel rates can be booked through your tool.
Whether you are contemplating a first-time consolidation of your Latin American travel spend, or looking for enhancements to your existing program, Radius Travel can help.