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Effective Travel Management
The eight key levers to optimizing travel programs
CWT works with its clients to respond to the complexities and challenges of business travel management while addressing the needs and expectations of travelers. CWT sees travel management as a multi-faceted undertaking, encompassing eight key levers that can generate savings while delivering service and enhancing security and sustainability:
Offering best-in-class traveler services and optimizing transaction processing. By using online booking tools for simple transactions, companies can reduce their total travel costs by up to 15 percent. For complex itineraries and special services, applying the skills of expert travel counselors is key to traveler satisfaction. Having access to the relevant content of airlines, hotels, rail and rental car companies is another priority for travel managers and travelers alike. Equally important is providing travelers with a full range of services designed to meet their needs from the moment of booking through their return. Implementing the service configuration that best balances a company’s requirements for service and savings plays a primary role in supporting these objectives.
Capturing hotel spend. The cost of hotel stays, which typically accounts for 30-50 percent of a total travel budget, can be reduced when companies approach their hotel program in a disciplined and professional manner. By optimizing negotiations with independent properties, as well as chains, and implementing a policy that couples the need for savings with traveler comfort, convenience and security, companies can improve compliance, enhance traveler tracking and more effectively manage their hotel spend.
Optimizing air and ground transportation. Air spend typically represents the bulk of travel expenditures and opportunities for greater savings still exist. Getting travelers to book in advance and use restricted fares, as well as balancing spot buying with negotiated fares, help to reduce costs. Concentrating volume with a limited number of preferred suppliers for larger volume-based discounts is also important, as are negotiations with airline alliances. Ground transportation, which includes rail, car rental, limousine, chauffeur-driven black car and taxi services, does not always receive the same attention as air although it can represent 10 percent or more of a total travel budget. In many markets, rail travel offers an effective alternative to air in terms of cost, travel time and reducing carbon dioxide emissions. Careful analysis of a company’s ground transportation data and relevant information on suppliers and competitive agreements can go a long way in negotiating the best terms and stabilizing costs over the duration of a contract.
Enhancing policy compliance and demand management. Together, a well-designed travel policy and traveler compliance are the cornerstone of an effectively managed travel program. Best practices in both of these areas can lead to savings of on average 20 percent of total travel spend. These savings come from improvements in five main areas: advance air booking, restricted airfares, preferred suppliers, traveler comfort (air class/hotel category) and preferred booking channels. Increasingly, companies are also evaluating the reasons why business trips are taken and the return on investment, as well as the impact on the environment and travelers’ work-life balance. As they integrate demand management into their travel program, some companies are introducing alternatives such as video-conferencing in their travel policy.
Increasing travel programs consolidation. Companies can enjoy savings of 20 percent on average, as well as enhanced service and security, when they consolidate their travel program regionally or globally. Consequently, more and more companies are standardizing their travel policy, processes and tools, and consolidating their sourcing. To support this effort, they increasingly work with one travel management company around the world.
Enhancing security and embracing corporate social responsibility. Leading-edge companies keep their travelers well-informed about security issues before, during and after a business trip and are well equipped to locate and assist them in an emergency. These companies have also begun to address issues of corporate social responsibility as they relate to the environment and their business travel program. Consequently, they are making it possible for their travelers to compare carbon dioxide emissions related to different means of travel at the time of booking. Post-trip reporting allows companies to track and offset CO2 emissions and better manage environmental issues.
Adressing meetings and events expenditures. By integrating meetings and events in their managed travel program, companies can tap into a potential source of overlooked savings. They can also benefit from many of the same traveler services their travel management company offers.
Measuring performance. Travel managers need key performance metrics and regularly updated executive dashboards to monitor the progress of their travel program. Equally important is an accurate assessment of traveler satisfaction, which enables travel management professionals to continually refine and improve their travel program and increase compliance.