5 Ways your Company’s Travel Dollars are Being Wasted
Corporate travel spend is a special monster, tricky to understand and difficult to evaluate. No one can negate its importance, in fact, corporate travel results in more than 1% of revenue for companies. It may be difficult to control for some, due to its highly fragmented and personal nature, however truly understanding where your company is spending its dollars can not only contribute to your overall ROI, but help you manage a travel program that optimizes on cost, generates effectiveness and efficiency, and ultimately helps the bottom line of your organization. Read on for 4 ways your travel dollars are being wasted, and how to generate significant cost savings for your company.
- Travel Policy Non-Compliance
Not fully enforcing your company’s travel policy is usually the most common (and costly!) way to overspend. Your travel policy should provide a strict and enforceable set of guidelines for your travelers to follow when booking their trips in a way that is highly transparent and allows upper management to make decisions based on travel spend. Allowing employees to individually book their preferred airlines and hotels at their convenience and offering leniency on expense report policies results in significant additional spend for your organization.
- Letting travelers book at their leisure
Your travelers are important, and as your companies road warriors you want to make sure they are comfortable and productive at all times. However many mistake this for allowing them to spend on travel as they wish, often booking last minute (and significantly more expensive) flights, hotels and cars at their convenience. The truth is that you can leverage your travel spend with suppliers to generate even more savings for your company. Look for airlines that have easy and convenient routes to your most common destinations, and hotels within walking distance of your desired location. Then leverage that travel spend and negotiate special rates with said suppliers, enforcing the use of these suppliers in your Travel Policy.
- Not negotiating the little things
Speaking of negotiation, many Travel Managers also assume that they can generate the most savings by negotiating discounts on big ticket items, such as airfare. While this is a logical decision, this is a highly volatile market that is unpredictable and constantly changing. It’s also important to focus on the little things. Base hotel room rates and daily car rental fees are mostly non-negotiable, but ancillary fees can quickly add up. Free breakfast, WIFI, seat and room upgrades, early check-in and late check-out are all little things that when added up can provide significant savings to your bottom line.
- Not using actionable data to make decisions
Reporting, reporting, reporting! Let’s say it one more time: reporting, reporting, reporting! Once you have a transparent and enforceable Travel Policy, as well as negotiated rates with preferred suppliers, the only way to know whether you are achieving cost savings through your efforts is through reporting. This way you can analyze exactly where you are spending, identify even more ways that you can reduce travel costs, and maximize your ROI on travel. From this, you can continuously improve your travel program and provide sustainable results.
- Not comparing yourself to the competition
Measuring your business travel spend in comparison to the competition is always important. Benchmarking data can provide you a look into what you are spending compared to the competition, based on location, industry, project, etc. This data can suggest optimal spending levels for your industry, and allow you to make decisions that provide you a competitive advantage. This will take your travel program to the next level, allowing you to not only be effective within your organization, but within your entire industry.