Good old fashioned advice to reduce your travel costs.
Hugh Fearnley-Whittingstall’s War on Waste has done great work in encouraging us to rethink the food we fritter away; if only the floppy-haired middle-class messiah would bring his campaigning zeal to the world of business travel costs. If you want to talk waste, most businesses haemorrhage travel money on a scale to rival Starbucks’ throwaway cups.
Good travel procurement is one of the secret weapons that distinguishes outstanding businesses from average ones. The reality is that very few businesses understand travel procurement, and even those who think they’re doing a decent job are likely to be vastly underestimating expenses and losses hidden across different cost centres.
By contrast, we see companies that use highly strategic travel procurement processes and forge genuine partnerships with travel suppliers easily saving 20-30% on their original costs.
Here’s how they do it.
1. Be consistent
2. Where is the money going?
Use a spend cube analysis to clearly identify exactly who and where money is being spent. Collate all data across both corporate and private cards at a business, division, employee and travel company level – then profile this spend. Only by understanding volumes and patterns can you start to identify where savings can be made.
3. Understand the market and negotiate accordingly
Once you know what and where spend is going, look in the travel spend mirror…how attractive is that spend to the market, do you operate a mandated policy where all spend is channelled through a Travel Management Company (TMC) or similar, and if not why not? Potential suppliers need to know:
• Is all spend controlled and managed centrally?
• Can you bring spend together and leverage it?
• What is your travel profile e.g average length of stay, where and when?
• What additional services can they supply, e.g. can you offer meeting room business in addition to hotels rooms, do you control what can be claimed for sustenance and how much, would that support on site spend at the hotel?
• What type of fares do you purchase, e.g. business class flights to multiple destinations v economy short haul flights.
4. Don’t just buy, buy logically
Now you know what, where and when you are spending money on travel, do it logically. A good example is rail; anytime tickets carry a heavy premium, and buying single tickets instead of a return is often cheaper, so if you need flexibility for the return leg, do just that. Split ticketing can be a real money saver for long journeys. And travel off-peak where possible, of course.
When it comes to air travel, book flights more than two weeks in advance wherever possible, as prices are much lower. Also, if you are doing one or two day trips, flights on a Thursday are often cheaper than other days.
A final trick: if you’re bringing a group together for a meeting and an overnight stay, book outside peak times such as Tuesday and Wednesday. You will save considerable amounts, while employees enjoy not having to battle travelling on peak demand periods.
5. Use Technology
There are literally hundreds of apps and tools that allow you to save money. A good example is a company that books long haul flights – once a flight is booked, the technology continually checks to see if that ticket is available at a lower cost (once cancellation fees are factored in); if so (as is often the case) it cancels and rebooks. The traveller is still in the same seat on the same flight, but you’re paying less.
6. Work with your key suppliers
They don’t bite!
Travel companies love managed policies and programmes. Work with major hotel chains directly and transparently; if you guarantee business, they’ll often offer perks in return such as free parking facilities or Wi-Fi, cutting costs while improving your employees’ experience.
The key thing here is to work with the travel industry in true partnership. Meet suppliers in person and have honest, open conversations. “Customers want to reduce costs whilst suppliers need to grow revenue- how do we work together to both meet our objectives?”
Once the savings start adding up, travel procurement can release a startling amount of money to be reinvested where it really counts. Although of course once you’ve nailed travel, it’s time to look at your meetings, your event spaces… oh, and your Sunday roast leftovers, of course.