HOW TO EFFECTIVELY CONTROL YOUR CORPORATE TRAVEL COSTS

Travel costs are rising due to inflation, oil price increases and salary hikes driven by an industry-wide talent crunch, but there are several mechanisms that travel managers can put in place to control spend and return to the halcyon days of 2019, according to Warren Dix, chief commercial officer at UK-based travel management company, Gray Dawes.

To bring travel spend down and return to 2019 levels, companies need to reduce costs by 14 per cent, Dix said while assessing air fare increases over the last three years during a webinar hosted by the TMC on Thursday (13 October).

The ‘key pillars’ to driving down cost, according to Dix, are online adoption, advanced purchasing, managing ticket flexibility, strong approval processes to ensure compliance with travel policy, implementing a hotel programme with negotiated rates, and regularly reviewing policy.

“Make sure you have full access to NDC content within your booking tool or via your TMC because we never want a traveller to say ‘I can find a cheaper flight on the internet’,” he said.

To make the most of a hotel programme, Dix recommended focusing on a concise number of hotels, driving spend to two or three hotels per location, in order to negotiate better rates.

Purchasing air tickets in advance can also create considerable savings, according to Dix. Booking a long-haul trip 21 days in advance, instead of a week prior to travel, can save up to 57 per cent of cost. Within Europe, if a long-haul air ticket is booked 14 days in advance instead of seven days, companies can save approximately 37 per cent.

“Those are really big numbers when we talk about savings,” he said.

Dix advised booking a non-refundable ticket rather than a fully-flexible fare as this can save up to 73 per cent on long-haul flights. And in cases where cancellation is a possibility, savings can still be made because “for the cost of fully-flexible ticket you can book three non-refundable tickets”. When it comes to rail, booking two advance single fares rather than a return fare can also reduce costs.

“You just have to be organised about it,” said David Oates, group procurement director at construction company Wates Group, which has a 95 per cent online adoption rate among its travellers and a directive towards advance bookings.

Communicating the benefits behind new purchasing processes can also help to overcome traveller push-back.

“We just treat [travel] as another category of spend, and we try to implement the same principles across all our categories,” Oates said.

To ease pressure on travellers, Dix advised implementing one or two changes instead of tackling the entire travel budget.

“Rather than attacking everyone in the travel programme, target 36 per cent of your overall travel programme,” he said, “this will get you back to a reasonable state of play”.

“With the correct management inclination and good analytics, you can start to target different groups or cost centres within your organisation,” he added.

“There are savings to be made, but you have to be willing and able to do it.”

Lauren Arena | Reporter • BTN Europe | 13 October 2022