Internal strategies for travel budgets
Along with the World Travel and Tourism Council (WTTC), American Express Global Business Travel research has determined some three quarters of business executives find business travel to be "very" and "extremely" important for increasing profit and sales. Yet considering the 3% increase in domestic hotel rates in North America, and the 11% average increase of international hotel rates, business professionals must be savvy with their budgets.
Herve Sedky, Senior VP and GM of American Express Global Business Travel agrees, nothing that "businesses and travel management professionals in particular have to balance the need of using travel as a means to grow business with the stark reality that budgets are not growing in tandem... They are being asked to identify areas of savings while also being charged with the need to allow for more trips. We are working with clients to deploy internal measures that can be taken to stave off increases that are not within their control."
The 7 following tips are unconventional yet ingenious methods for stretching business travel budgets :
1. Book everything through agencies. Using agencies maximizes your negotiated rates and your cost savings. Plus agencies can provide an additional security benefit, in the case locating travelers in emergency situations, not available elsewhere.
2. Use all unused tickets! Most contracts permit unused tickets to be applied to future travel, if not refunded. This may seem simple, but companies often fail to apply these tickets to future travel, despite having already negotiated the ability to do so in the supplier contract.
3. Simplify international itineraries. Avoid multi-country currency fluctuations, pricing structures and stopover restrictions that are practically guaranteed in a corporate travel program.
4. Stay informed. Even small price increases can mask larger, regional price increases, and have a massive impact on your travel budget. If you know where your employees are traveling, you can refine your policies to maximize allocated budgets and negotiate travel fares based on volume and routes.
5. Verify hotel rates. An estimated 35% of hotel rates are incorrectly inputted into reservation systems, so don’t count on someone else noticing and changing the discrepancy for you. Be proactive and ensure that your rates (particularly for rooms and meals) are listed as negotiated.
6. Understand your spending. The key to maximizing travel budgets is knowing where you are spending. Companies can optimize their competitive edge by identifying both appropriate budgets for growth targets as well as benchmark spending for previous years and competitors. Differentiating between billed and booked spend can provide additional insight into your travel spending.
7. Ensure Compliance. In 2010, travel booking data research indicated that out of policy transactions grew from 26% to 33% and that 97% of these bookings were approved by managers! Companies can encourage adherence these rules with a pre-voyage compliance solution.
"Savvy companies know that implementing any of the above solutions can help a program, but that is only part of the process. Working with travel agency partners to properly integrate these solutions into a strategic managed travel program will maximize their impact and results," continued Sedky. "The goal is to drive new behaviors within the company. Communication of policy and business goals is key to helping travelers make smart decisions on behalf of the company so that business travel can be used strategically and as a competitive advantage."