It goes without saying that an accountant’s priority is to keep costs down; even more so in SMEs that operate in such a price-driven environment. It’s good news then that business travel is the second most controllable business cost after people. But the bad news is that it’s also one of the most complex, meaning spending less does not always equal saving more. The answer to controlling travel costs lies in structure. Adopt a structured approach to buying travel and meetings and you will save time, effort and reduce up to 20% from your budgets.
But where to start? Step one is to embark on this three point approach: analyse, appoint, adopt. Analyse what, where and why you’re spending on travel. Appoint a travel manager and approved travel suppliers. Adopt a structured company-wide travel policy company. Once you have that in place there are several other tips to keep costs down:
1 Manage it: The best thing you can do when it comes to business travel buying is to make someone responsible for it. Too often, travel and meetings expenses are an afterthought, yet many organisations could be doing it more efficiently and getting better value for money.
2 Slash – and burn: During – and following – a recession, spending gets put on hold and budgets are snipped. However, the same ‘trim now, pay later’ ethos that applies to people also applies to travel and entertainment: short term cuts can have a long term impact on the financial health of the company. The answer is not necessarily to slash travel and meetings spend, but learn how to make those budgets work harder.
3 Be visible: The travel industry calls it ‘visibility of spend’: not only being aware of how much you’re spending but what you are spending it on. It’s essential you know how your total spend breaks down between airlines, trains, taxis, hotel accommodation, meetings and conference venues, chauffeur costs, etc. Only once you have visibility of spend, can you control it, and start making savings.
4 DON’T use online travel agents: If you are responsible for booking travel for your company and are not a travel expert, then listen up – resist the temptation to use online leisure travel agents. It eats up hours and hours of valuable time and they charge hidden fees. If you know what you want to book then always go direct. You’ll receive much better service and equally good prices from suppliers.
5 DO use hotel and rail booking agents: If the majority of your business travel is domestic, then investigate rail and hotel booking agents. They’ll save you a lot of time. HBAs don’t even charge and, unlike travel agents, they have access to a much wider choice of accommodation to suite every budget.
6 Buy from the high street: If you manage minimal long-haul travel for your company or you’re responsible for arranging trips to places you’re not familiar with, then consider using a local business travel agent like Advantage Business Travel or Uniglobe. They are equipped to deal with more complex itineraries. They do charge, but only a small fee, and compared to the time they will save you, it’s worth it.
7 Consider a travel management company: If the majority of your organisation’s travel is international and involves regular long-haul trips, then a travel management company could work for you. During a recession, a common reaction is to keep things in-house to reduce costs. With travel, this can lead to a false economy. Specialist suppliers such as TMCs have the expertise and buying power to cut your costs, get you a better deal and save you a lot of time and effort.
8 Plan ahead: Travel managers have a policy of buying three weeks ahead to get the best deal. By planning ahead you can buy quality services for less. Fly mid- week or out of season, purchase a multi-city ticket rather than a round trip fare, bundle your flights and accommodation, buy a restricted ticket and stick to your plan rather than fork out for a fully flexible fare! And for rail travel – never buy tickets at the station, it will cost you 30-40 per cent more.
9 Stay loyal. Price is always king, but if you can be loyal it pays. Sign up for programmes that reward companies AND travellers. Use kickbacks – such as free upgrades – to get more for your money. Most major airlines and hotel groups operate reward schemes and, thanks to the recession, they are on the rise.
10 Take in the whole picture. For example, booking the cheapest but not nearest hotel room may cost you more when you factor in cab fares, parking fees, airport transfers, internet charges and travel time to meetings.
11 Introduce a travel and meetings policy: And last, but by no means least, once you are aware of your visibility of spend, have appointed a travel manager and chosen your favoured suppliers, it’s time to create and implement a company-wide travel and meetings policy.
David Chapple is event director of the Business Travel & Meetings Show, which runs 8-9 February 2011 at Earls Court in London
(Picture © BBC/UKTV)
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