Lower the Costs of Travel Management By Optimizing Your Budget Planning

It’s that time of year where budget planning is in place and critical reviews of current year spending are being analyzed. When it comes to looking at lowering costs while improving productivity, corporate travel policies rank high on the list. However, no longer can corporations afford the luxury of developing one program suited to all travelers and stay rigid throughout the year on compliance. With the introduction of new technology at an accelerated pace, a “one size fits all “approach no longer works

What is the catalyst for this transformation? In the forefront is the ability to leverage data to provide detailed insights into understanding traveler segments, differences in demographics – Millennials patterns compared to road warriors, statistics on spending outside of policy compliance and more.

For the second year, CWT and the Global Business Travel Association (GBTA) have produced the 2016 Global Travel Price Outlook, which provides a foundation for discussion as budget analysis and planning begins.

Airlines  

Graph - 2016 Global Travel Price Outlook Airlines

Source: GBTA and CWT 

Costs are expected to increase across all travel segments in 2016. Starting with airfares, 44% of travel managers feel higher airline costs will be responsible for increases in travel budget with the continued rise of ancillary fees being one of the top contributors. The ability to consolidate data related to ancillary fees provides a platform for negotiations with air carriers for the upcoming year.

In some cases, due to the lower prices of oil, airline fees have remained relatively flat, and now there is a fear that the consolidation of players will impact pricing.  According to the study, 54% of travel managers in Europe anticipate negotiated discounts with airlines to remain the same in 2016, while 22% think discount prospects will be worse.

Hotels

Graph - 2016 Global Travel Price Outlook Hotels

 

Source: GBTA and CWT

Another segment expected to see price increases is the hotel industry. Areas to watch out for are a continued push in purchasing ancillary services, especially with the ability to market these offerings in a personal way pre-arrival with mobile check-in. Additionally the push toward a dynamic pricing model, as opposed to flat rate negotiations, continues to rise from the accommodation side. Pursing discounts off best available rate as opposed to offering one flat rate yearly compliments the revenue management strategies of increasing average daily rates at hotels.

When examining policies regarding hotels be sure to also take into account more stringent cancellation policies and the growing number of shared services such as Airbnb and the direct to consumer marketing to travelers by online travel agents.

With demand levels once again increasing in the US, a 4.7% increase in rate is projected in the United States surpassing the majority of the Americas except Venezuela claiming a record 15.2% increase

Ground Transportation

Usually under the radar and not in the forefront of spending accountability, ground transportation is often neglected where this might be the best opportunity for cost savings. Accounting for up to 4-6% of a company’s travel spend, the growing emergence of new players such as UBER can have a significant impact not only on spend but on compliance as well.

As corporations move through the planning process, the most important element is making sure you can see the complete picture by having all the data at your fingertips. We need data to define our travel trends, data to measure trip effectiveness, data to understand our behaviors and activities and data to understand our financial patterns and limitations. Airlines, Hotels, and Car Rentals are beginning to generate this kind of data and repurposing it in a format that is understandable and actionable for the traveler.

Secondly, schedule regular intervals to evaluate the overall effectiveness of your travel policy. Market conditions, new technology, and diverse demographics help guide continual tweaks to standard operating procedures throughout the calendar year.

Finally do not be afraid to re-approach suppliers during the year to negotiate new terms. A company’s dynamics change due to so many circumstances, (signing a major client or losing a major client), that developing a good relationship with your TMC or supplier contact could potentially be the key to tremendous savings.

Outsourcing the Role of the Corporate Travel Manager

Today’s busy travel managers have a growing number of new responsibilities added to their job description.  I was speaking with a colleague the other day who remarked on how many companies are choosing to outsource management of their travel and moving away from internal ownership of the program. Now I do not believe that the role of a corporate travel manager will fade anytime soon. However, a shift in focus, training and skills required to do the job has been shape-shifting over the past few years, especially with the introduction of new technology and mobile. According to a new study by the GBTA Foundation, “Travel managers report that mobility, virtual payments, and data are helping to transform their roles and responsibilities.”

The three critical areas of mobile, payments and data have always been very near and dear to the core of what Cornerstone is about. The GBTA study states that 86 percent of travel managers, reported having responsibilities related to selecting or implementing technology, such as online booking tools, mobile solutions or other travel technology software. Managing this aspect of a company’s business is a full-time job on its own, so it is not surprising that outsourcing to a third party is attractive given the complexity of the procurement process of these tools.

The evolution of virtual payments has reduced the stress for both the road warrior and the company reconciling expenses. With an expected increase in this technology in the near future, over a third of internal managers claim they are running into challenges keeping up with the evolving technology. One solution for aligning the expenses of business travel is to utilize the data that a TMC can provide.

Speaking of data, the value of receiving and analyzing relevant data is invaluable. There are so many types of applications that report data, many who do not communicate with each other, that the process itself has become overwhelming.  Numerous reports show that analyzing data is one of the most time-consuming activities in the daily role of a corporate travel manager. Data retrieval and the dissecting of relevant information may be best suited to outsourcing especially if the TMC has an excellent tool like TravelOptix™! (Ok I could not resist but really, it is worth looking at whether you are a TMC or a Corporate Travel Manager)

The bottom line is managing a company’s travel policy is a complex undertaking that is probably best suited when balanced between internal and outside resources. The pace at which mobile applications, virtual payment solutions, and deciphering data keep changing, it’s essential to have a clear alignment between an organization’s business goals and a robust travel program to support those objectives. It has become imperative regardless of who is managing the process.

The ABC’s of a Corporate Travel Policy

Unlike when we were growing up, it seems summer has come and gone at an accelerated rate. The children are back in school, companies are back to busily preparing next year’s budgets and road warriors…well they are back on the road.  With September upon us, I thought it would be a good idea take a look ahead and recap some of my summer blog posts by reviewing the ABC’s of a corporate travel policy.

A is for Airline Trip Disruption.

Trip disruption has continued to be a hot topic this year and a major focus at conferences such as World Travel and Tourism Council Global Summit this past April in Madrid. A great quote from David Scowsill President & CEO WTTC sums up the issue succinctly, “Each CEO knows there are going to be points of disruption. They can’t predict disruption. But they can plan for disruption.”

With the upcoming launch of one of our latest products 4site™, we knew that the application needed to be centered on events and be able to identify and present solutions to all types of situations, whether they be good or bad, in real time. This requires our app to analyze an abundance of data and understand the data from a solution-based perspective.

Our goal at Cornerstone is to enable enterprise travelers to more efficient and productive while on the road. Beginning with providing a 24/7 monitoring of the travel agenda, with a major focus of supporting the traveler during trip disruption. We knew we needed this capability to be “always-on” so it could actually predict when travel might get complicated and then provide the traveler with relevant, contextual data to promote better decision making

B is for Becoming Mobile

Mobile is something that has been discussed and discussed over and over, however mobile is still huge topic and issue for our industry.  With 19 vendors offering mobile solutions at this summer’s GBTA convention, it seems like everyone is trying to figure out how to deliver their product offering via a mobile device.  According to the first-ever GBTA Global Business Traveler Sentiment Index™, mobile technologies – including Wi-Fi, travel apps, and digital wallets – are transforming business travelers’ experience around the globe.

Emerging technology continues to revolutionize the business travel experience and Cornerstone is embracing this challenge and the changing travel landscape.  As pioneers in the industry, we continue to lead the pack with our latest products. With the combination of delivering itineraries to mobile devices and integrated information services that provide travelers with actionable choices, we are helping travel companies, and travelers improve and optimize their trips.

C is for Communication

Every business excursion today requires an enhanced level of communication in this 24/7 connected world we live in. This emergence of the on demand economy has altered the way today’s traveler interacts before and during a trip. In order to properly service and win over on-demand travelers, data in the form of proactive actionable information lies at the core of building this relationship.

Road warriors want to know their preferred seat selection has been accommodated, that the flight is on time, and if not, to get an invitation to stay in the lounge that extra hour. If a flight has been canceled, the want the peace of mind that they have already been booked you on another flight.

Additionally,  the ability to check in on a mobile device, skip  lines, connect with two-way SMS texting directly  with a hotel is rapidly becoming  a necessity over something nice to have. It’s unmeasurable the value of landing at your destination, turning on your phone and receiving a message that your room is ready for check in.

D is for Data

Because I always wanted to be teacher’s pet, I have included “D” as extra credit. Data is crucial to everything we do. At Cornerstone we are obsessed with making sense of travel data so that it is accurate and consumable by travelers and the organizations that support their productive journeys. We are thrilled to provide that with the recent rollout of TravelOptix™ to the market.

TravelOptix provides clear, dynamic and actionable visualizations of companies’ travel data, bringing insights through analytics.  This solution assists travel management companies and their clients in making informed decisions based on a consumable business intelligence. The extensive data enables information clarity on savings metrics, program gaps, policy compliance, budget enforcement and future strategy.

This fall, as you return to focusing on business at hand, do not forget the ABC’s and D of a successful travel policy. In addition, the “Apple” your teacher might expect you to bring may look more like an iPhone 6S!

The Ever Changing Landscape of Corporate Travel

A 2013 survey conducted by PhoCusWright found that 92% of business travelers own a smartphone, and more than six in 10 own a tablet. It is no wonder that today’s travelers want to take control over their business trips and access information anytime, anywhere. This is not to say that the role of the Travel Management Companies (TMC’s) or corporate travel policies are dead – it is merely stating the time has come to incorporate a harmonious union between these entities. TMC’s volume has leveled off from the OTA’s poaching market share, however, they have managed to maintain a place in this new world order and through the advent of technology, can deliver this new mobile seamless environment.

Travel itself from the path to purchase to trip execution is in a constant state of change. New technology, travel patterns, shifting demographics and social media are successfully engaging frequent travelers and presenting a challenge to TMC’s to balance this with internal policies. How is it possible to drive program adherence while empowering the individual who is on the trip?

The best way to unravel this complex web is to examine the evolution first from the traveler perspective and then from the Travel Management point of view. From here, we can draw some conclusions that will assist in closing this gap.

Today’s Business Traveler Profile

It’s difficult to speak about the preferences and annoyances affecting today’s traveler without first acknowledging the diverse demographics of the new face of the modern business traveler. Nearly half of these travelers are women and, while according to the Pew Research Center, more than one-in-three American workers today are Millennials, quickly outpacing both Baby Boomers and GenX.

A great snapshot into the minds of the contemporary traveler can be found in The 2015 Business Travel Survey produced by Travizon Travel Management. Let me share some interesting information uncovered during the study.

  • 84% of the individuals surveyed confirmed their employer works with a travel management company
  • Yet only 18% preferred delegating trip planning responsibilities to a third party
  • Surprisingly 59% percent stated they never book flights on their mobile device.
  • Business travel apps are primarily used for viewing real-time flight info, as over half of respondents indicate this to be the most useful feature. Instant itinerary access, weather and travel alerts were also considered important
  • Even though there has been a lot of buzz around shared services (namely Uber, Airbnb, and Zipcar) 54-56% of Boomers and Gen X participants show little to no interest in any of those offerings, however only 13% of Millennials felt the same way
  • 78% of the frequent flyers, however, believe access to Uber would improve their business travel experiences. In fact, Uber received the most support overall—with 40% of the total group indicating an interest in its services
  • Gamification, companies, turning business travel booking into a game with points and prizes for choosing preferred airlines, hotels, restaurants, etc. is quickly gaining momentum! 41% of all participants noted they would play and want to win with an additional 32% willing to take part just to be a team The most competitive target segment? 70% of Millennials were motivated to play and win.
  • 54% of all respondents say their company has no policy guidelines for booking with suppliers via a mobile device
  • 33% of the most frequent travelers dread reporting travel expenses to the point where they pay for things themselves
  • 54 % of senior management said it was a hassle If you’ve ever had to change or cancel your business travel plans
  • The expectation that the individual is simultaneously in the field and available for conference calls is a major concern.
  • One common statement among participants was that they would be better able to focus on business trips if they did not have to worry about missing flight connections.
  • Finally, an overwhelming majority stated, “A travel app that would allow me to quickly change my flights and reservations would be very helpful.”

The New Travel Management Company Profile 

For corporate enterprise companies, the role of the Travel Management Company (TMCs) plays a significant role in implementing, improving and successfully operating global travel programs. So what does a present day TMC look like as it relates to the new age traveler? A recent white paper produced by American Express and PhoCusWright examines Strategies and Ideas for Travel and Expense Program Management. Let’s take a look at what they have to say.

  • Travel program managers are innovating travel programs around the needs of frequent business travelers as part of company-wide efforts to increase employee productivity, reduce service interruptions and drive program compliance to deliver savings for their organizations
  • The most innovative travel program managers are successfully engaging frequent travelers and driving program adherence by treating their business travelers as customers and employing engagement strategies along with mandates.
  • According to the PhoCusWright qualitative research, frequent travelers’ experiences and expectations are key drivers of change in travel programs. Travel program managers have begun adjusting how program services and tools can be delivered via mobile technology
  • While 32% of companies do not have a mobile app policy in place concerning travel-related applications, some companies are developing their own apps to increase productivity and service satisfaction.
  • To make it easy for road warriors to focus more on their work and less on the burden of expense management, providing access to the tools and interfaces travelers are familiar with, making it easier for them to stay within the parameters of the program.
  • Additionally, mobile technology provides new opportunities for travel program managers to influence choices along the traveler’s purchasing path. Rather than only influencing purchasing decisions prior to departure (such as booking a hotel, airfare or train tickets), mobile technology can enable managers to communicate with and influence travelers at every single step of the trip
  • The introduction of two-way communication during a trip with SMS tools to respond to keyword inquiries such as “Taxi,” “Hotel” and “restaurant “allows the ability to by send an automated message with in-policy recommendations
  • Travel program managers must become more savvy financial managers, balancing fiscal responsibility and traveler productivity.

Upon examination of the profiles of both the traveler and the TMC, we can clearly see that the overall goals and vison of both parties are not that far apart.   Once the TMC’s have a clearer understanding of what today’s traveler wants they then can then collaborate with their enterprise customers by offering unique services. The more TMCs become involved in how they can socialize their expertise to travelers and create innovative products, (such as Cornerstone’s recently launched solutions TravelOptix™ and 4site™)  helps to service the information needs of their clients .

It is clear that mobile technology is a great medium for delivering information to the empowered road warrior that is looking for real time information that an agency can provide. To continually improve global programs in the future will rely on a partnership with open communication between the individual out in the trenches and the agency.

Improving your trip productivity will soon be in the palm of your hand

According to TechTarget “An event-driven application is a computer program that is written to respond to actions generated by the user or the system”. This is exactly what we had in mind at Cornerstone when we started development of 4site™. We knew that today’s traveler does not have all the tools they need to make decisions during their trip and they want them served up in an easy, consumable way.  It was obvious that we needed to create a mobile app that would provide the traveler with predictive intelligence and would convert stress into peace of mind.

At Cornerstone we find event–driven programming fascinating as it presents a separate and unique logic that starts during the programming stage. We knew that the application should be centered on events and identify and present solutions to all types of situations, whether they be good or bad in real time. Of course this requires the app to analyze an abundance of data and understand the data in a solution based perspective.

Our goal is to make enterprise travelers more efficient and productive while on the road. Beginning with providing a 24/7 monitoring of the travel agenda with a major focus of supporting the traveler during trip disruption. We knew we needed this capability to be “always-on” so it could actually predict when travel might get complicated and then readily give the traveler relevant, contextual data to promote better decision making

Intelligence of this magnitude is a clear benefit not only for the individual but for the company as well. An employee, empowered by personalized and contextual data that addresses the situational characteristics of travel, will operate more efficiently and cost effectively. This will in turn, help the enterprise reduce corporate travel spend.

Launching this fall the event-driven approach that  4site™ will provide will enable the traveler, the company and your TMC’s the ability to be proactive and in control no matter what happens to disrupt the travel experience.

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