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Mar
03
Minneapolis

Management

Have you considered a corporate travel program?

In today’s corporate travel environment, travelers are making decisions based upon convenience, relevance, points and status, and several other factors that go beyond company cost savings.

With the total travel industry spend reaching more than $1 trillion dollars there are a lot of marketing tactics to get travelers to purchase from third-party/leisure-based websites.

This spills into the corporate world by using tactics that make the traveler think they are finding the best price or getting a discount that has to be booked through a specific link.

Think of buying business travel like you would an insurance plan or accounting software; would you let each employee develop their own process and purchase separate software?

Many small business owners don’t want to pay for a travel program because they think that it is too costly or may not fully understand what it involves. Some think the program is going to take months of training and implantation calls to launch. What business owners often forget about is the culture that it is supporting by giving their employees the tools necessary to make informed decisions about procuring business travel.

What it means when a company does not have a defined corporate travel program:

  • The employee has the ability to book travel on any website or however they see fit. They may have static guidelines that are written on a travel policy somewhere.
  • The employee is responsible for either getting reimbursed for the trip or has been given a company credit card to pay for expenses as needed.
  • Employees are responsible for finding the best price, which translates to them shopping multiple sites, including direct and third-party consumer-based websites.

What it means to have a managed travel program:

  • The employee is given an online booking platform that the company has implemented and they can either book through the corporate travel tool or contact the company’s appointed travel agency.
  • The company can have a set of parameters that, if necessary, can be flexible and potentially adjusted based on the restriction levels provided within its culture.
  • The company’s travel policy is embedded into the booking platform which provides dynamic guidelines for the traveler.
  • The company has access to travel data which means they can show specific vendor spend to help in negotiating discounts. The discounts are then rolled out company-wide, even without knowing the employee may chose a company discounted rate.

Starting a travel program

Now some say that you shouldn’t start a managed travel program until you hit a certain spend or have so many employees. This isn’t always the case. Within the industry, many of the travel management companies are able to provide discounted rates they provide to all of their clients. So, while a business may not have enough spend to get their own negotiated discount, they can still have access to corporate rates by using a corporate booking tool.

So instead of relying on your employees to have the mindset of a business owner, consider starting with an online booking platform to help guide them to book travel within company policy.

There are a couple options on the market for buying business travel.

The most widely known travel and expense management tool on the market is SAP Concur. They have products available for small businesses all the way up to large enterprises. Deem Travel is one that has been around for a long time, and it has rebranded to focus on the traveler experience. Both of these tools offer something different and unique to the travel industry.

The benefits hit the bottom line

Companies that have a clear travel policy and the guidelines in place to manage corporate travel find savings, cost-reductions, and corporate discounts. There are vendors in the travel industry that will only provide upfront discounts to companies using an online booking tool.

Corporate Savings Estimates (based on internal research of the firm’s own clients):

  • Airline spend – 7%
  • Hotel spend – 12%
  • Car rental spend – 5%

These savings are found a couple ways.

The most widely disputed estimates say that you can actually find between 20% and 30% savings from buying behavior alone. By having travelers login to a site that is monitored by the company, they will trend toward picking cost-conscious options. These online platforms source content directly from vendors and then corporate discounts and rewards are stacked on top to help drive down spend. After you have the ability to track the data, the next step is evaluating the cost to visit Client A and the revenue generated from that client.

Understanding the traveler mindset

Whether your company has 10 employees that travel or a couple thousand, travelers have one thing in common: they need to source air, car, and hotel. Why not use a tool that can help bridge the gap between traveler satisfaction and corporate responsibility? That way you can track the data and make informed decisions that make sense for your business.

 

Andy Chaussee does business development for Professional Travel Service: 763.577.2307; andy@professionaltravelservice.com; www.professionaltravelservice.com.

Andy Chaussee

Business Development
PROFESSIONAL TRAVEL SERVICE

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