All types of organizations can save on their business travel spend. From everyday flight or hotel bookings to global events involving hundreds of people, a smart approach can save you money, time and hassle. As you look forward to the next financial year, our experts talk about what it takes to build your future corporate travel savings plan.
# First understand your travel costs beyond airfares
It’s not uncommon for travel costs to be equated to the airfares and thus begins the chase for the cheapest possible airfare. While its true that airfares can make up a significant share of a company’s or a traveler’s total travel costs; they aren’t really the true measure of travel costs. But if airfares aren’t a true measure of travel costs then, what is?
The answer: Trip cost.
Unlike airfares, trip cost is built of ALL the components that actually go into a trip: flights + hotel + transportation etc. Each of these components then has a set of factors that influence the total cost, for example: the best possible airfare + extra baggage fees + WiFi charges + extra transportation costs due to hotel location and more. As one UNIGLOBE expert points out, many of our clients gravitate towards Low Cost Airlines to travel domestically and now even internationally. Some of their trip components or extra charges like baggage fees if not considered at the time of booking can completely erode saving opportunities in the long run. If you multiply the savings lost per trip times the number of travelers or trips taken during the course of a year; it can be quite a significant number for corporations”.
The bottom-line? With dozens of factors influencing the actual cost for every trip, and more being introduced every month, it pays to use a professional research expert to assist in the planning and purchasing process to avoid hidden costs.
#Choosing the right booking system for your organization impacts saving opportunities
Depending upon how you choose to book your company’s travel – you could be seeing increased savings in time, administrative effort or you may have setup the process in a way that costs you more time and in-general leaves a negative effect on employee productivity. Most corporations are increasingly turning toward online travel management systems that add convenience, produce faster response times and also help in controlling travel costs through an in-built pre-trip approval and reporting system. As one UNIGLOBE Expert points out, “one of the biggest risks for any organization is leakage of both time and money but this leakage can be difficult to spot if the entire focus of savings is based on price of services consumers. Travel professionals can help audit and recommend the optimum booking channel for companies. Companies can benefit from a fully online solution to a hybrid model where research and selection can happen through a secure online travel portal but the actual booking including fare improvements happen through a travel professional ”.
# Tracking is key
As a CFO or business owner, you probably have a pretty straightforward priority: where do you focus your attention to derive the maximum return on your investment? In travel terms, the same philosophy requires you to know which travel-spend reports to ask your Travel Management Company to produce. “The purpose of travel reports is to give you visibility of how your travel program is progressing and help you take decisions. There are hundred of reports available but it would be foolhardy to study all of them. In our experience “exception” reports are the most useful for the ever so busy CFO or business owner”, suggests one UNIGLOBE Travel expert.
# A well thought out travel policy
A well-thought-out travel policy is the easiest way to achieve savings on your annual travel spend; sometimes as much as 20%. “A travel policy is a the heart of a company’s travel program. In our experience, a travel expert’s role in helping shape a company’s travel policy is invaluable”, says a UNIGLOBE Expert. Using their significant expertise, travel professionals can help you craft a travel policy with these considerations in mind:
- Booking process (how to book/amend/cancel, out of hours)
- Help setup expense guidelines
- Create process for traveler profiles
- Insurance/risk management (numbers/levels of employees per flight)
- Rules (for example-same carrier for return leg, split ticketing, restricted vs. unrestricted tickets)
- Flight selection criteria (time window for booking, lowest logical fare, lowest fare on the day, specific carriers and classes tied into employee levels)
- Hotel selection criteria (hotel classification, distance from destination, total cost of trip)
- Policy for day use, long-term stays, use of non-preferred properties and much more.
# Ask for regular review meetings
“Having a calendar for regular review meetings can be beneficial. Through these review meetings, clients can gain ongoing assessment of travel spend, existing travel patterns and traveler behavior. An important outcome of these meetings is identification of any corrective action that needs to be taken in favor of cost containment objectives. Its not unusual for these meetings to lead to supplier negotiation opportunities based on the trends we see”, elaborates a UNIGLOBE Travel expert.
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