Managing Travel in Challenging Times Be Smart: Travel More for Less From the Author of Smooth Landings Michael MacNair September 25, 2008 Savings ~ Solutions ~ Systems Travels 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 cancellations Rising fuel costs 35% ticket cost increase from $ to $ Less capacity: Air (59.7m seats), Car, & Hotel Stalled global hotel development Pressure to deliver from a sour economy Savings ~ Solutions ~ Systems According to the National Business Travel Association, business travel is the second largest controllable 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 Opportunity Simple Actions to Net Sizeable Results Savings ~ Solutions ~ Systems Manage Travel Instead of Buying It Balance Your Organizations Travel Requirements With the Travelers 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 approved procurement 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 Travel Benefits to Capture & Sell Companywide Savings ~ Solutions ~ Systems Managing vs. Buying Travel Value 1. Value MacNair Travels savings results are $65 less for domestic fares and $1,631 less for international fares. Savings ~ Solutions ~ Systems Managing vs. Buying Travel Value -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 Travel Value Fare Savings Results DomesticInternational 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 Travel Productivity 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 Travel Support & 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 Travel Control 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 Travel Select & 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 Requirements Clear Expectations Savings ~ Solutions ~ Systems Balance Travel Requirements Four 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 Requirements Four 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 Requirements Four 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 Requirements Four Tools to Setting Expectations Savings ~ Solutions ~ Systems Balance Travel Requirements Four 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 Down On-going Process in Changing Marketplace Savings ~ Solutions ~ Systems Build an Effective Travel Policy from the Top Down Areas 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 Down Areas 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 naturalweatheremergencies, deliver targeting warnings and data to effected groups Keep your road warriors informed (especially international IJET) Educate Travelers on Best Practices Communications 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 & Control Data & Control Savings ~ Solutions ~ Systems Leverage Travel Volume with Data & Control Leverage 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 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 costs 6. Develop an authorization process 7. 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 & A Time for your questions and answers.