Six top tips for travel managers to create savings in 2015 E-Guide
2 Introduction Savings remain a key focal point for Travel Managers in 2015 and through regular reviews and analysis, using management information, you can ensure ongoing contribution to this key objective. For our energy clients in particular, with the sharp fall in global oil prices over the past months, now in particular travel programmes are being scrutinised for further savings. Procurement and supplier teams are looking for actionable ways to reduce costs. At ATPI we work in partnership with our clients; this enables us to take a strategic approach to travel programmes, not focusing on just business travel itself, but understanding the wider business and where both direct and indirect travel savings can be made. Six Top Tips Here are six of our top tips on how you can benefit from the following efficiencies - we suggest you review them with your account manager and create a plan through which these can be implemented in a timely manner. What s inside 1 Analysing the way you buy travel: through clever purchasing techniques 2 Reviewing your travel policy: making sure it s relevant and effective 3 Integrating travel systems: increase efficiencies through direct and indirect travel costs 4 Analysing supplier deals: getting value from your suppliers 5 Utilising complementary services: through benefits of consolidation 6 Practicing effective communication: informing and explaining travel policy
3 Top tips The following top tips look at various ways to create savings, for example reviewing travel policy, clever ways of purchasing travel and ensuring effective communication with travellers. Talking to your travel management company (TMC) about fees is an important part of reviewing direct business travel costs, however it is interesting (and significant) to remember that typically TMC fees only represent between 3 5% (industry average) of travel spend. For example, a client spending 1m per annum on business travel could be paying approximately 30,000-50,000 in fees. Savings generated through focusing on other travel expenditure (for example air and hotel) can be as much as 20% (in this case 200,000) a significantly larger figure. Air - 61% Hotel - 34% Car - 1% Rail - 1% Therefore working with your TMC strategically, in partnership to create savings, is often more productive than focusing on the actual TMC fee and it is this area we explore in the following document. Fees - 3%
4 Tip one: Analyse the way you buy travel through clever purchasing There are a number of techniques you can utilise but as part of the analysis, benchmark your buying patterns with your peer group. This is only a useful exercise if your TMC can compare similar organisations be that by sector, region, specialism, volume or travel policy. Benchmarking enables analysis on data such as average ticket prices and deals offered by airlines. Additionally it contributes to forecasting and analysis of travel programmes which is integral for planning, measurement and communication with key stakeholders. Book travel in advance An obvious savings strategy but one that can t be ignored, booking in advance by at least 12 days can often save significant amounts. Use management information to identify any lost savings and illustrate the importance of advance purchase when possible. An example we found was booking 14 days in advance when flying from London Heathrow to Houston could save up to 836. Review ticket types Use management information to analyse ticket types, for example flexible tickets can be much more expensive and therefore could be mandated for specific routes or departments only. Utilising restricted fares could save you 30-90% on average (excluding offshore and marine fares).
5 Utilise pre-trip reporting Make the most of your pre-trip reporting to ensure you are getting the best value air fare for example at ATPI we utilise pre-trip reporting to highlight cheaper fares vs those at the actual time of request. This means our pre-trip report will highlight any reductions in the price of that fare right up to ticket issue. Utilise loyalty points Companies and travellers are often part of loyalty programmes, make sure you utilise frequent flyer benefits and any points that can be spent in exchange for travel. Mandate partner travel Ensure that any partner or contractor travel is booked through your TMC, as this will contribute towards controlling expenditure and maximising supplier deals.
6 Tip two: Review your travel policy to ensure it is relevant, effective and efficient Some organisations may have to review travel policy on an annual basis, others every couple of years as they see necessary. To ensure your policy aligns with savings strategies, it has to be relevant and reflect the objectives of your travel programme at any one time. Book online for point to point If you have a significant proportion of straightforward return trips, ask your account manager to calculate potential transaction fee savings made, should you switch these to online bookings. Ensure you get value 24/7 A good TMC will deliver a 24/7 service globally, rather than restricting bookings to office hours. At ATPI we deliver the best value fares regardless of the time of day through our in-house 24/7 teams. This enables even those travellers eligible for marine and offshore air fares to make bookings around the clock. Review the use of Business Class Are there routes where travellers book Business Class but could actually travel in premium economy or economy? You may find amending Business Class policy weeds out those for whom travel isn t an absolute necessity one way of doing this is linking Business Class eligibility to flight duration.
7 Understand frequent flyer programmes (FFP s) In some cases FFP s and mileage awards determine which option a traveller will choose this may be to the detriment of cheaper fares on other carriers, so utilise your management information to highlight any lost savings and amend your travel policy accordingly. Utilise pre-trip reporting Pre-trip reporting is an essential way of analysing and managing out of policy bookings it also means you and your TMC have the opportunity to amend travel where not already ticketed/confirmed. It may be that you identify certain rogu e travellers or departments that need further education or management. Implement stricter measures There may be instances where policy should be enforced through stricter measures. In these cases, expenses can be held back where travel was not booked through the TMC however, this should be discussed and agreed with your account manager and relevant stakeholders as to how best communicate this. Further, it may be that you mandate essential travel only and a further travel approval process is implemented with sign off from senior management (for example).
8 Tip three: Increase efficiencies through travel integration Travel integration is something we developed in response to client needs in the energy and shipping sectors, where managing travel is extremely complex and frequently requires last minute changes. However, it can produce efficiencies for all sectors and clients utilising our global sourcing and integration technologies typically see a 30% increase in indirect savings and a 10% increase in direct savings. Integrate travel systems Integrating your systems (such as HR / Finance) and processes with travel technologies (such as booking tools) provides the ability to analyse both direct and indirect travel costs. Integration means companies can often remove fragmented and inefficient travel processes as systems are automatically linked - additionally, manual work and human errors are reduced, whilst data is automatically consolidated and more accurate.
9 Tip four: Getting value from your supplier deals Benchmarking (see tip 1) is a useful starting point when analysing supplier deals, as is ensuring you have accurate, consolidated management information from your TMC during negotiations. Use this data to understand where your supplier deals are delivering efficiencies, and those which need improvement. Additionally, talk to your account manager about your TMCs buying power, which for global TMCs is often significant and can influence pricing and help to optimise opportunities such as last room availability. Review supplier deals regularly When focusing on savings in this area, utilise the expertise of your account manager they often have specialist knowledge and will most likely have experience negotiating with suppliers for other clients. Utilise agreed supplier rates Through management information you should be able to find out when agreed negotiated rates are being utilised and instances when they are not. Read the Expro hotel case study to find out how one of our account managers saved over 14,000 in three months through monitoring last room availability negotiated rates. Manage your hotel programmes If you don t currently have a managed hotel programme, it s worth finding out more about how consolidation and management of hotels could contribute towards savings. Additionally, at ATPI we offer our own hotel negotiated rates as a global TMC - which our clients can benefit from.
10 Tip five: Consolidate other areas of your business There may be other areas of your business which would benefit from consolidation not just savings, although this is the focus here but also to share knowledge / expertise and encourage best practices. Include group travel Booking all group travel through your TMC will not only reduce the cost of travel and contribute towards policy compliance, but it also ensures the same level of duty of care for all travellers. Obviously there are many variables such as organisational culture, the involvement of senior management and the pace of change but here are a few potential quick wins. Consolidate meetings & events If you can see potential savings in this area and your TMC has a specialist in-house MICE (meetings, incentives, conferencing, exhibitions) department, they should be able to contribute positively towards your events spend (for example through travel and hotel bookings). Additionally consolidation will also enable you to align both travel and events with company-wide objectives. Integrate passport & visas Integrating passport & visa requirements with booking process could save manual work and ensure there are no mishaps when travelling abroad, particularly to countries with complex visa requirements. A good TMC will offer this as part of their in-house services for a seamless travel experience.
11 Tip six: Communication - inform and explain A recent survey* of Travel Managers revealed that 56% of respondents said that better internal communication would improve compliance with their travel policy. Stakeholders who are aware of travel objectives and why they have been chosen are more likely to accept the rules and guidelines so effective communication could have a big impact on savings. Get buy-in from senior managers If the message comes from the top, it s far more likely to filter down through the organisation. Getting senior managers visibly involved with your travel programme will help to persuade travellers to follow suit. Create a dialogue with travellers This will help you to understand their challenges and vice versa. Try surveys to gain insight into your travellers minds - there are a variety of free tools, such as Survey Monkey. Otherwise utilise existing communication channels such as intranets or internal blogs to gain feedback. Holding workshops to answer questions or roadshows is also an option and can be run jointly with your TMC. *2013 ATPI survey to Travel Managers
12 In summary: Want to know more? If savings are currently top of the agenda for your business, as well as the regular reviews you have with your TMC, work with your account manager to build a specific savings strategy including the points above if relevant. For examples of case studies and more how-to guides, visit the ATPI Knowledge Hub. A specific plan with measurable KPIs will not only focus your time, but help illustrate to stakeholders tactics you are using to save money and which ones are working best. Each organisation is different and there is no one-size-fits-all approach, therefore it is essential to work with your account manager in partnership - devising a savings strategy that aligns to your business goals, built around your culture and traveller needs.
ATPI is among the world s leading travel management companies. Our dynamic and innovative approach to savings and service has earned us one of the highest client retention rates in the industry. With over 100 offices worldwide, the company has successful operations in corporate travel, corporate event management, online travel technology and specialist travel management for a number of key industries. Published: 02.15