Travel Budgets Analyzed
Road warriors putting the brakes on travel, senior execs sprouting wings. In a topsy-turvy economy, everything is up for grabs when it comes to cost-cutting travel expenses.
“Travel logic” is a phrase Annemarie Reininger likes to use to describe significant changes in corporate travel management.
“I think travelling employees are using more common sense, or travel logic, when it comes to whether or not they have to travel,” says Reininger, director of BottomLine Group Ltd. in Toronto, and a member of the Association of Corporate Travel Executives (ACTE) board of directors. “Behaviour is changing because of questions around whether meetings need to be face-to-face, or whether alternatives such as web or video conferencing can complement or supplement some of that travel.”
Travels budgets are under the microscope and everyone is accountable for finding efficiencies. Approving managers are asking hard questions about whether some trips are really necessary and what is the return on investment.
“A lot of companies have pushed it to the employees and have said ‘we need your help in trying to control these costs,’” says Sherry Marshall, CCTE, senior travel and corporate card manager, pwc Toronto. “I’ve never seen people follow policy so much in my life. They see that they can really help drive costs out.”
The role of procurement departments in finding cost efficiencies is another factor. Organizations are reviewing vendor contracts, requiring travellers to book well ahead to get the best deals on airfare and hotel rooms, purchasing non-refundable tickets and restricting or disallowing seats in business class.
But it’s not just about counting pennies on approved travel. Demand management is important too. “Procurement can get all the savings they want by negotiating with suppliers, but you’re really going to save the big bucks when you cut the demand for travel,” Marshall explains.
Strategic face time
Travel managers agree that nothing can replace face-to-face meetings with clients. After all, how do you tell a valued customer that you can’t fly out to meet them because you need to save a couple of bucks?
Companies are analyzing their travel histories to determine whether they are spending a disproportionate amount of travel resources on internal training, meetings and conferences versus client meetings, says Anne Relph, director of account management for Carlson Wagonlit Travel Canada in Toronto.
“Many of our clients are starting to monitor the reasons for the travel. Some are quite surprised when then find out that 60 per cent of their travel is actually for internal reasons,” she says. The alternative is to shift some of that to video and web conferencing.
A Strive for Balance
Companies are running lean and the pink-slip survivors–those who kept their jobs amid mass staff cuts–are carrying heavier workloads. Travelling isn’t so much a job perk when trips cut into their private lives and they are still expected to keep up a full workload.
Companies are thinking harder about improving productivity. They’re less inclined to waste staff time on the non-productive aspects of travel such as the time spent getting to and from, and waiting in airports.
There may also be a shift to having senior executives do more of the travelling, suggests Jeff Element, CTM, president of The Travel Corporation (Canada) in Toronto. While the company primarily markets consumer vacation packages, it does arrange some corporate incentive travel programs. And, like other global companies, it keeps a sharp eye on corporate travel by its own executives and sales teams.
“I think the senior managers in organizations are travelling more,” Element says. “You want to get the decision makers in the room and in front of your most important clients and partners. Senior people can make the biggest impact and get the biggest return on investment.”
Travel under the microscope
Travel managers are required, more than ever, to manage and analyze data and to apply procurement strategies and methodologies to measuring travel performance.
Those are incredibly valuable skills, Reininger says. “I think it brings such credibility to the travel managers to say ‘Maybe it’s not how much we’re spending, but where we’re spending it.’”
The bright side is that organizations are becoming smarter and much more strategic about their reasons for travel, and how they use precious staff time and resources.
Tips for Travel Managers
• Use video and web to complement business travel and achieve objectives.
• Become more involved in how your company budgets for travel. Come to the table with data and advice for how the money can be spent more strategically.
• Online booking tools are invaluable for guiding staff travel choices to things like preferred airlines and hotels and the lowest non-refundable fares.
By Angela Kryhul
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