Business travel is the second-largest controllable cost for the average U.S. organization and in 2010’s "new normal," procurement managers are preparing for: more travel using the same if not smaller budgets (56% of NBTA's 2010 Business Travel Forecast respondents cautiously reported that they expected their spending to increase - 31% expected flat spending*); the fact that air, hotel, and car rental rates will go down (between 1% to 8%*); negotiated deals remaining prevalent for those who can control and direct spending (70% of travel managers reported that they think they will negotiate better hotel rates, 30% think they will get better car and air deals*); increased pressure to leverage more of their travel and meeting spend to reduce costs and enhance benefits; virtual travel to play a larger role as well a mobile tools; miscellaneous costs to continue to rise; and lastly that national, world and emergency situations will require support and communication systems. [more]
We have already experienced terrorism attacks, two earthquakes and unusual weather catastrophes in the last 90 days.
So now that we know what to expect, what can we do to manage these changes and obstacles?
1.Improve Reporting, Budgeting and Auditing
2.Strengthen Travel Policy
5.Define Policy for Travel Alternatives
7.Centralize Travel and Meeting Procurement
8.Leverage Preferred Suppliers
9.Manage Miscellaneous Costs
Improve Reporting, Budgeting and Auditing
Via your travel management company you can secure consolidated "booked" data that can be reconciled against your credit card or actual data. This enhanced actual data can be driven to department heads. Online booking tools offered through travel management companies even have tie-ins with automated expense reporting systems so this data can also be included to track the myriad of new miscellaneous costs of travel (enhanced seats, Wi-Fi, and standby flights). Lastly, benchmark data on national average ticket costs can be useful to measure the success of your travel management system or can be used for budgets or proposals. There is still plenty or travel anarchy, so securing consolidated data and auditing it is a big first step.
Strengthen Travel Policy
Have a clear travel policy mandate that comes from the top of your organization and mirrors your culture. In these times, employees recognize cost savings initiatives, so if you have one, you just may want to tighten it now. It should define exactly what the lowest fare is that you want them to take, where to purchase it, commitments to preferred suppliers, when to book online or call-in, expected processes and procedures (project codes and expense reports), who the policy applies to (management, staff, board, speaker, and committees), emergency processes and acceptable miscellaneous costs.
Have a system to communicate emergency changes and procedures, new tools, and expectations. Consider creating your own travel intranet with a link for your online booking tool from your travel agency, policy link, and shared hints and tweets (TripIt is launching a tool to facilitate this right now). Leverage and train your team on how to use existing tech tools for gate changes, cancellations, alerts.
Consider items such as a pre-trip approval processes and technology tools to monitor in advance how many travelers travel and at what cost. Consider directing everyone you are paying for to an event specific travel policy, including a price threshold. Encourage travelers to handle multiple projects or customers per trip or define a trip’s ROI expectation. Consider driving or taking shorter trips with less overnights.
Define Policy for Travel Alternatives
Virtual meetings are becoming popular. Consider the cost of such systems, suppliers, maintenance, management and where these tools will be located and develop a policy. Many hotels now have virtual meeting suites. Measure the success of virtual options and direct employees to the proper use - sales are hard to close virtually for example.
Many companies have increased international travel so address international procedures. Most online tools do not go far enough to find the lowest global fares and best routes on growing numbers of low cost and native airlines that are not commonly found in reservation systems. Consider your travel providers access to these suppliers, expertise, rate desk capabilities, fare search process and leverage with suppliers! Make sure your travel policy addresses safety, currency and miscellaneous cost differential for international travel. Security tools like iJet and indigo are becoming popular for those travelers to some of the world’s challenging spots.
Centralize Travel and Meeting Procurement
Companies have found that it makes sense to ensure procurement system and communication consistency, consolidation of roles, leverage synergies, and a 360 degree view for all types of travel when combining travel and meeting procurement. TMC online booking tools also offer online meeting management.
Leverage Preferred Suppliers
Suppliers want to see your control of travel habits and sizeable volume. So prepare your case and leverage your total volume to find the optimum discounts, benefits, and waivers - even via small business programs (United’s Perks Plus or Hertz #1 Gold…) and meeting discounts. Then, take the next step to apply these relationships to all the travel to pay for; board members, consultants and even speakers. Once you are earning funds and tickets, establish policies to use them more effectively.
Manage Miscellaneous Costs
$1.5 billion was paid to the airlines last year in onboard fees. Measure how this is effecting your average trip cost via expense reports, define expectations in your travel policy, and ask suppliers for credit in your supplier agreement for these additional costs. Your policy can also address how to avoid these costs via elite status, the use of carriers who do not charge, and pre planning.
We discussed the fact emergencies have already impacted travelers. What is your system for supporting these effected travelers? Maintaining employee productivity and safety at work either in the office or on travel is a corporate responsibility. Contingency plans, insurance, and security tools are available from providers experienced in business travel.
So which of these issues apply to you? Develop your plan for improvement, seek help from professionals, and gain further control, savings, efficiencies, and support.
*Facts obtained from the 2010 NBTA Business Travel Forecast.