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Managing Travel in Challenging Times Be Smart: Travel More for Less From the Author of Smooth Landings Michael MacNair September 25, 2008
Managing Travel in Challenging Times
Be Smart: Travel More for Less
From the Author ofSmooth LandingsMichael MacNairSeptember 25,
2008
Savings ~ Solutions ~ Systems
Travel’s Perfect Storm Travel’s Perfect Storm
Challenging Travel Times Increased Costs extend to phone reservations,checked bags, change fees, meal services & fuel surcharges
Lost productivity via
weather delays &
flight cancellationsRising fu
el costs
35% ticket costincrease from $467.57
to $633.44
Less capacity:
Air (59.7m seats),
Car, & H
otel
Sta
lled
glo
bal
hote
l dev
elop
men
tPress
ure to delive
r
from a so
ur eco
nomy
Savings ~ Solutions ~ Systems
According to the National Business Travel Association, business travel is the second
largestcontrollable cost of an organization.
Travel effects every department Travel Procurements vs. Travel Anarchy =
Reinforcement of a cost containment culture Complex Product – Thousands of fares on
thousands of suppliers
The Travel OpportunitySimple Actions to Net Sizeable Results
Savings ~ Solutions ~ Systems
Manage Travel Instead of Buying It Balance Your Organization’s Travel Requirements
With the Traveler’s Needs to Define Expected Value on a Trip
Build, Expand, and Monitor an Effective Travel Policy From the Top Down
Educate Travelers on Best Practices and Useful Procedures
Leverage Travel Volume with Data and Control
Steps To Best Manage Travel in Challenging Times Suggestions
Savings ~ Solutions ~ Systems
Purchasing any corporate travel outside of one
consolidated, vetted, and approvedprocurement system: Costs more than it should Reduces employee productivity Sacrifices support and advocacy Is outside of SOP of all Fortune 500
companies Reduces control over business expenditures TMCs help travelers find better fares than
they find on their own
Managing vs. Buying Travel Standard Operation Procedures
Savings ~ Solutions ~ Systems
Travel Management/Procurement Offers Four Key
Benefits That You Should Maximize & Sell
Managing vs. Buying TravelBenefits to Capture & Sell Companywide
Savings ~ Solutions ~ Systems
Managing vs. Buying TravelValue
Managing vs. Buying TravelValue
1. Value – MacNair Travel’s savings results are $65 less for domestic fares and $1,631 less for international fares.
Savings ~ Solutions ~ Systems
Managing vs. Buying TravelValueManaging vs. Buying TravelValue
-Via more comprehensive access to fares & airlines (low-cost carriers, Web fares, legacy fares, & corporate
rates) -Via the enforcement of your clear-cut value expectations
& report supervision to evolve -Value engineering (multileg, international, etc.) -Preferred management -Cost effective change management
Savings ~ Solutions ~ Systems
Managing vs. Buying TravelValue
Managing vs. Buying TravelValue
Fare Savings Results
Domestic International
National Average for 2007 Source: Topaz
International
$470 $3,315
MacNair Travel's Average for 2007
$405 $1,684
Savings $65 $1,631
Savings ~ Solutions ~ Systems
Managing vs. Buying TravelProductivityManaging vs. Buying TravelProductivity
2. Productivity – an estimated 50 percent reduction in time is spent making travel arrangements and dealing with changes
How? -Online & call-in reservations well supported -Change management -Support on the road -Data & reporting to enhance expense report &
financial management
Savings ~ Solutions ~ Systems
Managing vs. Buying TravelSupport & AdvocacyManaging vs. Buying TravelSupport & Advocacy
3. Support and Advocacy
-Strategic Systems Development – policy templates, best practices, & useful procedures
-Supplier negotiations -Issues management (on the road, when
wronged)
Savings ~ Solutions ~ Systems
Managing vs. Buying TravelControlManaging vs. Buying TravelControl
4. Control
-Reporting & Data -Total Spending -Top destinations & suppliers (negotiations) -Unused non-refundables -Call-in vs. online via TMC -Cost of change: compliance -Policy -FlyAmerica -Authorization
Savings ~ Solutions ~ Systems
Managing vs. Buying TravelSelect & Sell the SystemManaging vs. Buying TravelSelect & Sell the System
Summary
-Sell the Benefits -Maximize the Value -Reinforce Culture of Cost
Containment -Secure Executive Buy-In -Expect Resistance
Savings ~ Solutions ~ Systems
Clearly define value expectations (connections, airports,
LCCs, hotel, & car) Clarify use of preferreds (supplier like air, TMC, card…) Define systems (coding, expense reports…) Balance objectives of team
Balance Travel RequirementsClear Expectations
Savings ~ Solutions ~ Systems
Balance Travel RequirementsFour tools for setting expectations
Balance Travel RequirementsFour tools for setting expectations
1. Secure templates of successful travel policies 2. Understand the various travel price expectations
that require clarification.3. Assemble the “travel squad” 4. Launch the process with Executive Buy-In
Savings ~ Solutions ~ Systems
Balance Travel RequirementsFour tools for setting expectations
Balance Travel RequirementsFour tools for setting expectations
1. Secure templates of successful travel policies
– Consult NBTA and companies like MacNair Travel that manage travel well
Savings ~ Solutions ~ Systems
2. Understand & address the various travel price expectations that require clarification.
– Connecting flights versus non-stop flights– Alternative airports versus central airports located
nearby. – Preferred suppliers versus non-preferred suppliers – Hotel selection clarity– Car size and type– Advance purchasing– Miscellaneous costs (coach seat, upgrades, call-in vs.
online, meals, bags, etc.
Balance Travel RequirementsFour Tools for Setting Expectations
Savings ~ Solutions ~ Systems
3. Assemble a “travel squad” Include schedulers, road warriors, an executive level
employee, and the finance team Understand various perspectives & challenges Travel procurement change advocates
Balance Travel RequirementsFour Tools to Setting Expectations
Savings ~ Solutions ~ Systems
Balance Travel RequirementsFour Tools to Setting Expectations
Balance Travel RequirementsFour Tools to Setting Expectations
4. Launch the process with Executive Buy-in
– C-level Buy-In– Policy Enforcement
Savings ~ Solutions ~ Systems
An effective travel policy should define:
Why Travel Management Value Expectations Required processes Useful practices
Build an Effective Travel Policy from the Top DownOn-going Process in Changing Marketplace
Savings ~ Solutions ~ Systems
Build an Effective Travel Policy from the Top DownAreas to Address
Build an Effective Travel Policy from the Top DownAreas to Address
Why Travel Management
Value Expectations
Air Price thresholds (connection, alternate airport, LCC)
Hotel brand or per diem direction Car type and policies When and why to use non-refundable fares When to use online reservation systems Commitment to preferred supplier rates Expectations on miscellaneous travel costs, such
as entertainment, bags, & seats Expectations on use of low-cost carriers Processes for maximizing use of non-refundable
tickets
Savings ~ Solutions ~ Systems
Required Process Approval process (more scrutiny over certain price
thresholds) International travel procedures and safety tips while
on the road Emergency procedures & tips Project and customer code definition requirements
Useful Tips Tips regarding currency, baggage surcharges, and
communication tools Procedures for policy oversight International travel tips & tips for safety on the road
Build an Effective Travel Policy from the Top DownAreas to Address
Savings ~ Solutions ~ Systems
Reduce liabilities, recognize fluidity of marketplace, understand your commitment to employees
Establish one point of contact for all travel data (consider on-going learning)
Leverage travel squad to determine right use of data & how to communicate
Determine what data would be useful to promote, who should receive it, and how its distribution will be managed
Create an emergency communication process: Track all employees in the event of national or natural—weather—emergencies, deliver targeting warnings and data to effected groups
Keep your road warriors informed (especially international – IJET)
Educate Travelers on Best PracticesCommunications Strategy
Savings ~ Solutions ~ Systems
Data & Control
Fare selected vs. lowest fare available Policy compliance (reason codes) Preferred support & opportunities Authorizations Advance purchase Cost of change Fare types selected
Can only happen with consolidation
Leverage Travel Volume with Data & ControlData & Control
Leverage Travel Volume with Data & ControlData & Control
Savings ~ Solutions ~ Systems
Leverage Travel Volume with Data & ControlLeverage
Leverage Travel Volume with Data & ControlLeverage
Secure deals (small business, corporate, meeting, advance purchase, etc.)
Demonstrate evidence of control over buying patterns (board suppliers, etc.)
Maximize tools (pay with points-well, card benefits, upgrades, benefits and available discounts)
Create a Hotel RFP and ask for offers Do the same for other types of travel expenditures
& services
Savings ~ Solutions ~ Systems
In SummaryIn Summary
1. Challenging times call for well managed travel. Sell the benefits and consolidate.
2. Partner companies, useful technologies, and best practices provide great opportunities to reduce this significant cost.
3. Focus on a few key areas to improve upon and create a plan.
4. Deliver clearer and more conscious expectations in a policy your TMC enforces
5. Expand policy to address new costs6. Develop an authorization process7. Collect data, monitor, & leverage volume & tools
Flying SMARTER & CHEAPER is possible if you develop, evolve and fully use the right system
Savings ~ Solutions ~ Systems
Q & AQ & A
Time for your questions and answers.
