. Tightening Up Your Travel Spend | Meetings & Conventions

Tightening Up Your Travel Spend

Today's challenges present a golden opportunity to tweak your program and reduce costs

Businesses face the daunt­ing prospect of having to maintain travel programs with shrinking budgets and under hard scrutiny. At the same time, today's market provides a strong opportunity for proactive change and cost management. Now is the time to review your travel policy, drive compliance and work with key suppliers to institute the right changes for your company.

The Basics
A few simple actions can result in double-digit savings across your travel program. Some to consider: Establish a pretrip approval policy, require advanced booking (seven- to 14-day and 14- to 21-day windows have become typical), and adjust the default airline or hotel class.

I've seen numerous travel managers adopt these tactics over the past several months. Many have implemented pretrip approval processes to identify noncritical or out-of-policy business travel. One client requires that all out-of-policy travel be approved by a division president or higher before it can be booked.  

Requiring all travelers to fly coach domestically has become common, and many companies now insist travelers fly coach internationally, particularly when the flight is less than a certain number of hours. According to recent Egencia data, 56 percent of travelers are booking cheaper hotels, and 71 percent have shared ground transportation with colleagues to minimize expenses.

Supplier policy
There is tremendous opportunity in today's market to fine-tune your preferred supplier policy. First, educate your travelers on how compliance drives the company's bottom line. In-policy bookings for air, hotel and car save an average of $219 per reservation, according to our data.

You can save more by leveraging your buying power and showing suppliers your ability to bring more demand. For example, if booking data shows that 70 percent of all hotel stays within a specific city are with three properties, it might be possible to consolidate those bookings to one or two properties with a few simple changes -- traveler education, for instance, or increasing visibility of preferred suppliers in your booking platform. This consolidation could help you secure a lower average daily rate or additional amenities like free breakfast and Wi-Fi.

Using your travel management company is one way to secure better rates. Arming yourself with the proper data and proving influence over travelers also helps.  

No stone unturned
Other helpful approaches include setting region- and city-specific hotel per diems, and requiring the use of unused tickets. This last point is often overlooked but is an important piece of the savings effort. We've found that companies forfeit between $2,300 and $32,000 per month by ignoring unused tickets.  

Perhaps one of the most meaningful things travel managers can do is to truly understanding their company's travel spend. Reporting and analyzing information gleaned from your travel management company or corporate credit card issuer can offer significant insight into spend patterns.

Increasingly, companies are mandating that all travel be booked through the TMC of record, using a designated corporate card, to afford direct visibility into their travel spend. This also empowers the company to effect near real-time change.

It shouldn't be hard to get buy-in for these efforts. Take the opportunity afforded by the challenging state of the economy to secure senior management approval and tighten up policy, compliance and supplier relationships. Now more than ever, the value of good travel management -- and your expertise -- is easy to demonstrate.