
In order to make the most of your corporate travel budget, it is
critical to plan for leveraging your program for all it is worth.
Telling travelers to select the lowest logical airfare is just not
enough. Here are the elements that should be considered when planning or
evaluating your travel program.
1. Travel policy
A
well written and disseminated travel policy is the foundation of any
good travel program, and I am consistently amazed that so many
corporations have such an outdated and poorly conceived travel policy,
if they have one at all. It is not difficult to find a well written
policy. One can be found online quite easily. All that remains is that
it is edited to reflect corporate culture, and disseminated within the
company so that everyone understands and agrees to follow it. For this
reason, it is a good idea to have everyone sign a copy of the travel
policy to ensure that it is read, understood and owned by all company
staff. I suggest that everyone in the company signs a copy of the travel
policy, whether they travel or not. They may change positions in the
company later and be required to travel. A travel policy need not be
long or complex. Some of the best travel policies I have ever seen were
only a few pages long.
2. Centralized travel internally and externally
Many
companies do not centralize their travel program, and they pay a price
in terms of a loss of expense reduction opportunities and internal
efficiencies. Many companies that do not centralize travel have a fear
of requiring travelers to do something they may not want to do, along
with the idea that centralizing travel will require hiring a Travel
Manager. Both of these may be legitimate concerns but they do not have
to be in most cases. By requiring travelers to book centrally, you are
not necessarily causing them to lose flexibility. You can centralize
travel while still allowing travelers to book on their own, either with a
travel agency of your choice, or online through a provider that you
have partnered with and have confidence in. By assigning someone with
the responsibility of overseeing travel, you are getting a single point
of contact both internally and externally for travel issues. If your
company spends less than $1 million in air travel, you probably do not
need a full time travel manager. In these cases, travel oversight can be
given to the finance department, human resources, or even an executive
level assistant. Here is a look at the advantages to be gained by
centralizing travel.
When you centralize travel with a single
agency, you gain in a number of important ways. You will have a single
point of contact for problems while travelers are on the road, and you
will have one entity to go to for all your travel needs. This eliminates
the problem of consolidating a travel report from among several
sources. By bringing travel together, you will gain significantly from
economies of scale. If you can measure total travel among various
divisions or locations, you can get more for your money from travel
suppliers. This will allow you to gain more from airline soft dollar
programs, which means more free tickets and upgrades, get a higher
percentage discount from our preferred airline, and get better
negotiated rates from your hotel and car contracts. Your fulfillment
costs will decrease as well, as your travel agency will often discount
their fees for a higher overall volume of travel.
3. Mix of online booking and personal service
This
is an addendum to the previous element, which calls for centralizing
travel with one travel agency. This is important, but in doing so, you
need not require travelers to use an online booking system, and you need
not require travelers to call the agency directly. By offering
travelers the option of doing either, you are accomplishing several
goals. You will reduce your fulfillment costs, as online booking is
cheaper in terms of a service fee. By giving travelers the option, you
are giving them a sense of control, thereby increasing morale and
standing a better chance of a high adoption rate. Thirdly, you leave
open a best practice of using your online booking engine for less
complex itineraries, and allowing senior executives, frequent travelers,
and complex itineraries to be booked directly with a travel agent that
can offer a higher level of service and a better overall travel
experience where it is most warranted.
4. Look under every stone
While
the bulk of most travel programs revolve around the air budget, there
are several other areas one can investigate to find savings
opportunities. There are a couple of more obvious areas to look, such as
negotiated hotel rates at your favorite hotels, or car rental discounts
with a favored supplier. Often your travel agency will already have
discounted rates through consortia affiliations and agency car
contracts. There are also some less common areas that should be
investigated. For example, if ground transportation is a concern, most
suppliers will offer discounted rates and a direct billing option.
Direct billing arrangements with hotels and car rental agencies are also
a great way to increase efficiencies and make the job of the accounting
department easier.
5. Leverage hard dollar and soft dollar contracts
Most
major airlines today offer hard dollar discounts as well as soft dollar
incentives in exchange for company loyalty to their product. If your
travel program is over $1 million in air spend, you can secure a
discount off of the lowest fares of your carrier of choice in return for
a market share commitment. For your secondary carriers, or if your
volume is less than the minimum required by the airline, you can enter
in to soft dollar programs for free tickets and free upgrades, as well
as traveler status enhancements or airport club passes. These programs
require little in the way of volume, but they are not well publicized so
you may need to hunt for them or ask Baker Travel or your current
agency to point you in the right direction.
6. Do not neglect hotel volume
Hotel
volume is sometimes overlooked but it should not be. Negotiated rates
can be had through your travel agency or directly with the hotel
properties of your choice. Individual hotels near corporate locations
will negotiate discounted rates for you in exchange for a minimum
room/night commitment. By utilizing a travel agency, you are likely to
receive discounts of 5% to 50% on thousands of hotels worldwide.
7. Have at least one car rental contract
Rental
car contracts are easy to enter into and require little in the way of
commitment from the corporation. Choose a partner that has airport
locations and a reputation for excellent customer service. You can save
5-10% very easily and can also negotiate frequent renter membership for
all your employees. This will make them more efficient and enhance
morale. You can also enter in to direct billing agreements at the same
time that can make the jobs of your travelers and accounting staff much
less stressful.
8. Understand group and meeting contracts
Airlines
and hotels will discount your fares and rates when you have groups
traveling together or meeting at a single destination from multiple
points of origin. These meeting contracts can bring you airfare
discounts of 2-10%, and if you have enough travelers on a single
airline, you may be able to negotiate for free tickets to be awarded at
contract completion. The minimum requirement is usually 10 travelers
going to the same place at the same time. Some airlines have higher
minimums so be sure to ask before a contract is generated. Hotels will
discount their rates in a similar way with a minimum of 10 room nights.
These discounts can range from 10% to a much higher discount depending
upon occupancy rate and seasonal variances.
9. Use reporting to consistently improve metrics
Well
managed travel programs require constant monitoring and financial
controls to be properly leveraged. Insist on timely and customized
reports that can be designed to bring you the information you need most.
By receiving regular reporting on traveler behavior and provider
contract performance, you will be in a better position to fulfill
contract obligations, achieve cost reduction objectives and see where
opportunities for future savings may lie.
10. Use all avenues to enhance traveler comfort and efficiency
Lastly,
any well managed travel program will take in to account the comfort and
productivity of their travelers. When travelers are comfortable, they
can focus on their main priorities that help propel your business
forward. If travelers are happy, they perform at a higher level. Ask if
your travel agency can upgrade traveler status on a preferred airline.
Look in to purchasing blocks of airport club passes so they can be used
strategically during long and complex itineraries. There are many ways
to reward travelers for the difficult and often grueling chore of
travel. These kinds of rewards generate feelings of loyalty and
increased productivity and efficiency.
If you would like to learn
more about how your company can better leverage their travel program to
benefit your bottom line and the satisfaction of your executive level,
feel free to contact me. I am delighted to point you in the right
direction.
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