Three-quarters of executives believe that business travel is “extremely” or “very” important to increasing profits and sales, according to new research from the World Travel and Tourism Council. But the increasing costs of business travel can put a major dent in a company’s bottom line if they’re allowed to spiral out of control. One business travel company says that taking seven basic steps can help companies offset the external pressures that are driving up travel fares and rates.
For starters, plan on booking all your travel arrangements through your travel agency partners, said the experts at American Express Global Business Travel. You can maximize their negotiated rates and cost savings while adding an additional security benefit if business travel disruptions occur and plans must be changed.
Unused tickets can be an unnecessary drain on the corporate coffers. You need to keep track of unused tickets and make sure their cost is applied to future travel. Many companies fail to apply unused plane tickets toward future travel despite having negotiated that ability in their supplier contracts.
In today’s global marketplace, complex multicountry trips are a prominent component of nearly every corporate travel program. However, savings and profits are more often than not tangled in currency fluctuations, pricing structures and stopover restrictions. You should take advantage of experts who can spot these opportunities, because savings is crucial for those seeking to optimize travel spending, American Express said.
You also need to understand how regional increases can affect your travel budget. Even a modest average increase can have a significant impact on travel budgets as they may mask larger, regional increases based on city-pairs and class of service. Understanding where employees are traveling for business can allow for additional policy refinement and can help companies can negotiate fares based on routes and volumes which can help drive additional cost savings.
Pay attention to the details, American Express said. Discrepancies between hotel rates loaded in the reservation system and negotiated corporate rates represent another opportunity for companies to drive savings. These rate differences often go unnoticed and unchanged, resulting in higher costs for rooms and, at times, the failure to include negotiated amenities such as Wi-Fi and meals.
Like so many other areas of business, if you don't monitor your travel spending, you can't manage it. Having an ability to understand where you are spending is the first step towards maximizing where your budget is spent.
As a company, it's necessary to adhere to the spirit of your travel policies as well as the letter of the rules and restrictions. With continual rises in prices, a key driver of savings is encouraging employees to make smart business decisions that drive compliance within travel policy and leverage preferred suppliers. In 2010, a year when compliance was top of mind for businesses, an evaluation of travel booking data by American Express showed that the percentage of out of policy transactions grew from 26 percent to 33 percent year over year.
"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," said Hervé Sedky from American Express Global Business Travel. "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."
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Reach BusinessNewsDaily senior writer Ned Smith at firstname.lastname@example.org. Follow him on Twitter @nedbsmith.