Corporate travel is made up of many moving pieces that make cost control and budget management a challenge, such as increasing costs, fluctuating prices, and complex rules.
In addition, if your travelers are booking travel on their own, there’s little assurance they’re getting the best rate, selecting acceptable fare classes, or making choices that align with your company travel policy. They may even be spending hours comparison shopping across various websites, compromising your company’s productivity.
Amidst all this, it can be quite difficult to know exactly where every dollar goes and stakeholders often struggle with how to save money on business travel. For this reason, many organizations partner with a travel management company (TMC).
The Global Business Travel Association forecasted global travel spend to increase by approximately 28% between 2017 and 2022, fueled by growing economies across the world. This high-growth trend could place business travel procurement professionals in a difficult position as they attempt to balance costs with traveler expectations.
Here’s a look at some of the ways a TMC can to help you control spend, optimize your budget, and improve your bottom line.
How Travel Management Companies Support Cost Savings
Supplier Negotiation Support
A TMC will analyze your company’s travel data to pinpoint opportunities for spend improvement, particularly in preparation for supplier negotiations. In corporate travel, contract agreements are driven by volume so this data is essential to determine which business travel discount programs are realistic and beneficial for your company. If you already have agreements in place, your TMC will benchmark their value to determine opportunities for improvement.
In instances where little data is available, or your volume doesn’t meet a discount program’s thresholds, a TMC can often give you access to their own corporate travel discount programs, with competitive rates that your travelers could not access on their own.
Automated Unused Ticket Tracking
Unused ticket credits are one of the major sources of business travel costs that can be solved with a TMC partner. If your travel plans change frequently, or your travel is tied to major projects, unused tickets can add up to represent a fairly significant cost to your business. Tracking them manually is not only time consuming and labor intensive, but also prone to error. When unused tickets slip through the cracks, there may not be any way to recover that lost money. A TMC can help you prevent those dollars from slipping down the drain by using highly effective, automated tracking technology.
Travel Policy Support
Your corporate travel policy is one of the strongest cost-saving tools you have – as long as it’s kept up-to-date and your travelers are complying. A travel policy supports business travel savings by providing travelers with direction for where and how to book their trips, identifying preferred suppliers, establishing rules for acceptable fares and room rates, and many other specifics.
A TMC can help you develop your policy and support its enforcement by fully integrating it into your service configuration and programming its parameters into your technology, such as an online booking tool. Plus, you can opt for the integration of a trip approval solution and flag out-of-policy bookings.
Instant Access to the Best Possible Pricing
When travelers book trips outside of the approved booking channels of your program, such as booking directly with suppliers or online travel agencies, two risks emerge:
- Trip data is not captured and cannot be used to support supplier negotiations
- Travelers lose access to negotiated rates and they have no way to ensure they receive the best prices
A TMC can provide instant access to the best pricing and the most logical itineraries for your travelers. Doing so generates value by:
- Eliminating the need for travelers to do comparison shopping, which can take hours and drastically reduces productivity
- Providing travelers options that fall within policy parameters
- Capturing and analyzing data which is essential for supplier negotiations and contract agreements
Plus, when procurement professionals, travel program managers, and other organizational stakeholders, work with a TMC partner, they can receive guidance and support from an account manager who possesses a thorough understanding of the corporate travel industry and your program’s objectives. An account manager can benchmark your program’s performance, quantify corporate travel savings, and identify areas where spend can be improved.
Cost control is an ongoing task in a corporate travel program, but with a little help, you can make a significant impact on your bottom line while improving productivity and eliminating cumbersome processes. For more information on how you can control your business travel spend this year, check out our 6 Key Strategies for CFOs.