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“The only reason businesses spend money on travel is because they expect positive outcomes from those trips,” says Scott Gillespie, a leading expert in traveller friction.
In a recent study titled Achieving Better Business Travel Results, Gillespie says travel programmes should be designed to maximise the number of positive outcomes from a trip, rather than minimise travel costs.
An old-fashioned approach to travel management can be detrimental to more important goals, such as a successful trip, retaining staff and ensuring travelling employees remain healthy and happy, he says.
Although Gillespie’s approach resonates with many travellers, meeting these goals can still be a challenge.
Experts from the Global Business Travel Association have warned that companies can expect to spend more on business travel in 2019, with hotel prices projected to rise by an average of 3.7% while airfares will increase by roughly 2.6%.
Balance will be key for 2019
If companies want to achieve the right level of spend on their business travel, they need to strive for balance. They risk denting their profit and loss figures by spending too much. But, by spending too little, there is a risk that growth will be limited by losing out on new opportunities, deals and networking opportunities overseas.
With this in mind, Corporate Traveller has drafted a white paper to provide companies with practical advice to save without limiting their growth potential, and in a way that recognises their most valuable road warriors.
A travel policy is the first step
Having a travel policy is a good first step toward saving money and keeping travellers happy. A travel policy is essentially a set of guidelines for business travellers to give them a clear understanding of what the company allows. Although there are no set rules, there are a few essential items to include.
For example, list the cabin classes employees are allowed to fly in at the company's expense. Set a per-night hotel budget (bear in mind that some cities are more expensive than others). It is also a good idea to list preferred airline and hotel partners, as dealing with fewer suppliers will mean extra leverage when negotiating rates.
It is essential to communicate these details to the travelling employees and to get their buy-in. Travellers must be able to access the company travel policy easily – via an intranet or HR platform, or with an online booking tool.
Keep track of your expenses
To run a successful travel programme, keep track of what employees are booking and how much they spend. Knowing the true travel spend will help companies identify problem areas, allowing them to adjust their travel policies accordingly, re-educate their staff and ensure they are getting the best value from their travel spend.
By getting a little more granular with travel policies and meeting employees halfway, companies can prevent unnecessary spending that isn’t benefiting the bottom line.
From advance booking to flexible tickets and traveller perks –handy tips to achieve savings
It may come as a surprise, but the time employees take to confirm their travel arrangements can have a significant impact on the company's bottom line. For example, if employees book fewer than seven days before departure, they are likely to pay up to 28% more than if they booked 22 to 30 days in advance. In a year, this can make a massive difference to a company's travel spend.
Flexibility is important when travelling for business. Itineraries and dates can change quickly and often, at the last minute. However, employees probably don't need to book fully flexible airfares. Generally speaking, semi-flexible tickets offer better value. A change can be made for a small fee, which is usually much lower than the cost of a fully flexible fare, which saves the company money.
A budget doesn't need to mean fewer perks for travellers, either. Companies can impress their travellers with added-value deals, such as the Corporate SmartSTAY programme, which offers free hotel breakfast, late and early check-ins and upgrades. These extras make the traveller’s journey more comfortable at no extra cost.
Talk to the experts
When analysing the most-used categories of travel suppliers, some key suppliers are likely to show up again and again. It could be a preferred airline, or a hotel conveniently located near the office or near a client. It’s worth flagging these repeat bookings, because if the company books a single airline route or a specific hotel often enough, it might have the booking volume to negotiate a preferential rate with the supplier directly.
About the author: Oz Desai is general manager at Corporate Traveller SA. Picture: SUPPLIED/CORPORATE TRAVELLER
It’s not easy to negotiate directly with suppliers in this manner, though, so it’s wise to ask your travel management company (TMC) for advice and see if it can negotiate on your behalf.
The most effective long-term strategy for saving money on business travel is to work in partnership with an expert TMC. The right one will provide market-leading rates, booking expertise (both on- and offline), regular reporting and the help of a dedicated account manager who can suggest ways to save without compromising company objectives or service requirements.
By working with a TMC like Corporate Traveller, your company can focus on what's essential and grow and strengthen the business. After all, business travel is about business, not travel.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Handy tips for saving on business travel in 2019
Business travel is about business, not travel
“The only reason businesses spend money on travel is because they expect positive outcomes from those trips,” says Scott Gillespie, a leading expert in traveller friction.
In a recent study titled Achieving Better Business Travel Results, Gillespie says travel programmes should be designed to maximise the number of positive outcomes from a trip, rather than minimise travel costs.
An old-fashioned approach to travel management can be detrimental to more important goals, such as a successful trip, retaining staff and ensuring travelling employees remain healthy and happy, he says.
Although Gillespie’s approach resonates with many travellers, meeting these goals can still be a challenge.
Experts from the Global Business Travel Association have warned that companies can expect to spend more on business travel in 2019, with hotel prices projected to rise by an average of 3.7% while airfares will increase by roughly 2.6%.
Balance will be key for 2019
If companies want to achieve the right level of spend on their business travel, they need to strive for balance. They risk denting their profit and loss figures by spending too much. But, by spending too little, there is a risk that growth will be limited by losing out on new opportunities, deals and networking opportunities overseas.
With this in mind, Corporate Traveller has drafted a white paper to provide companies with practical advice to save without limiting their growth potential, and in a way that recognises their most valuable road warriors.
A travel policy is the first step
Having a travel policy is a good first step toward saving money and keeping travellers happy. A travel policy is essentially a set of guidelines for business travellers to give them a clear understanding of what the company allows. Although there are no set rules, there are a few essential items to include.
For example, list the cabin classes employees are allowed to fly in at the company's expense. Set a per-night hotel budget (bear in mind that some cities are more expensive than others). It is also a good idea to list preferred airline and hotel partners, as dealing with fewer suppliers will mean extra leverage when negotiating rates.
It is essential to communicate these details to the travelling employees and to get their buy-in. Travellers must be able to access the company travel policy easily – via an intranet or HR platform, or with an online booking tool.
Keep track of your expenses
To run a successful travel programme, keep track of what employees are booking and how much they spend. Knowing the true travel spend will help companies identify problem areas, allowing them to adjust their travel policies accordingly, re-educate their staff and ensure they are getting the best value from their travel spend.
By getting a little more granular with travel policies and meeting employees halfway, companies can prevent unnecessary spending that isn’t benefiting the bottom line.
From advance booking to flexible tickets and traveller perks –handy tips to achieve savings
It may come as a surprise, but the time employees take to confirm their travel arrangements can have a significant impact on the company's bottom line. For example, if employees book fewer than seven days before departure, they are likely to pay up to 28% more than if they booked 22 to 30 days in advance. In a year, this can make a massive difference to a company's travel spend.
Flexibility is important when travelling for business. Itineraries and dates can change quickly and often, at the last minute. However, employees probably don't need to book fully flexible airfares. Generally speaking, semi-flexible tickets offer better value. A change can be made for a small fee, which is usually much lower than the cost of a fully flexible fare, which saves the company money.
A budget doesn't need to mean fewer perks for travellers, either. Companies can impress their travellers with added-value deals, such as the Corporate SmartSTAY programme, which offers free hotel breakfast, late and early check-ins and upgrades. These extras make the traveller’s journey more comfortable at no extra cost.
Talk to the experts
When analysing the most-used categories of travel suppliers, some key suppliers are likely to show up again and again. It could be a preferred airline, or a hotel conveniently located near the office or near a client. It’s worth flagging these repeat bookings, because if the company books a single airline route or a specific hotel often enough, it might have the booking volume to negotiate a preferential rate with the supplier directly.
It’s not easy to negotiate directly with suppliers in this manner, though, so it’s wise to ask your travel management company (TMC) for advice and see if it can negotiate on your behalf.
The most effective long-term strategy for saving money on business travel is to work in partnership with an expert TMC. The right one will provide market-leading rates, booking expertise (both on- and offline), regular reporting and the help of a dedicated account manager who can suggest ways to save without compromising company objectives or service requirements.
By working with a TMC like Corporate Traveller, your company can focus on what's essential and grow and strengthen the business. After all, business travel is about business, not travel.
For more advice on how to achieve business travel savings, read the latest white paper from Corporate Traveller.
This article was paid for by Corporate Traveller.
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.