Controlling Corporate Travel Costs
New approaches to controlling ground transportation and dining costs.
By James Hale
By now, most corporate travel managers have seen the numbers. As highlighted in an industry forecast by Chicago-based consulting firm Advito, secondary spend—primarily dining and ground transportation—accounts for an average of 18 per cent of corporate travel expenditure.
The challenge: Once you have stripped the fat from your air and hotel spend, how do you cut deeper?
“Seizing the opportunity requires significant behavioural change,” says Bev Heinritz, Texas-based vice-president of client development for Dinova, which specializes in consolidating corporate dining opportunities.
Choice, flexibility and location
“There is a growing awareness of the importance of controlling secondary spend,” says Heinritz, “but there is still not a lot of understanding of what is involved.”
Targeting the 12 per cent of corporate travel expenditure that most corporate travellers put toward dining on the road, Dinova has created a network of 11,000 US restaurants that offer discounts for loyalty program members who book through its website.
Heinritz says the strength of the program is its relevance to the target audience. Choice, flexibility and location are all keys to its success, and she says those factors are essential for the adoption of any measures to chop secondary spending.
“Understanding the needs of your employees, and implementing a change management program are critical.” She also emphasizes the importance of employee engagement and a good communication program.
Breaking the Habit
Tired, stressed and focused on their goals, business travellers are often the ultimate creatures of habit. Changing those habits can be extremely difficult.
Take ground transportation. The average road warrior strides through an airport with one of two options in mind: Grab a taxi or pick up a rental car. Depending on the city, the former might be a real budget buster, and the latter may no longer be the most efficient way of making multiple stops in a major city. In many places, another option—one that hits all three of Heinritz’s success factors—is now on the streets. Originally aimed at environmentally conscious residents, car sharing is waiting at the curb to provide an economical way for business travellers to get around.
Kevin McLaughlin, president of Toronto’s AutoShare, says using a car-sharing vehicle makes great sense. “If you plan ahead, a car share can save you money, and remove the headache of finding parking. It can also allow you to combine different modes of transportation in a way that makes a lot of sense and saves you time.”
McLaughlin says that when he founded AutoShare 15 years ago, he did not predict two major success factors: the explosion of the urban lifestyle and the invention of the smartphone. The latter enables customers to determine the location of the nearest shared car and book it, and the most forward-looking companies are beginning to use GPS to help employees make other smart choices on the road. Now, as employees head through the air terminal, travel managers can automatically ping their phones, reminding them that a car-share service operates nearby, or that the shuttle offers a cheaper alternative to a taxi.
“Using GPS that way is not widespread yet,” says Heinritz, “but it has great potential. Proactive notification has really improved, and it can help travellers make smart, informed choices that make their experience better at the same time as it saves you money.”
Rather than choosing from a bewildering array of airport pre-flight dining options, Heinritz envisions a smartphone app that will direct the traveller to the corporate-supported restaurant.
Now, when it comes to where to dine or how to get there, business travellers won’t need to give it a second thought. *
Tips for slashing secondary spending
Target key areas of spending
Understand employee needs
Keep programs flexible
Support behavioural change
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