Maximize your business travel budget

Organizations have not wasted time getting back to business this year and as a result, global business flight bookings have exceeded pre-pandemic levels according to an analysis by the Mastercard Economics Institute. With a healthy return to business travel, organizations are reviewing their travel budgets and booking strategies to maximize their bottom line.

Understand the new business travel landscape

Comparing the average ticket price or daily hotel rates from 2020 to 2022 is no longer relevant in the fast-changing travel landscape. Many price-influencing factors are at play such as staffing, schedules, supply versus demand, inflation, and rising fuel prices.

For organizations seeking to drive savings through their travel program, it is important to have an understanding of the current business travel landscape and the state of the travel supply chain which may impact pricing and will guide any necessary revision of travel budgets. Business travel budgets should take into account the current market conditions and as such, booking behaviors should be modified to maximize the return on investment.

How to reduce costs?

Business travel budgets should not be viewed solely as a cost line, but rather as an investment in the organization’s growing success and remaining competitive within its market. There are many ways organizations can take steps to reduce business travel costs without impacting the ability to travel and engage face-to-face. Here are just a few ways that organizations can maximize travel budgets and drive savings.

Find savings from the expertise of a travel management company

Partnering with a corporate travel management company (TMC) like CTM will help drive savings and efficiencies for organizations and their business travelers.

Working with a dedicated strategic account manager enables an expert view over everything from supplier negotiations to the day-to-day operations of your travel team to traveler safety, travel program reporting, and training. They work alongside your team, ensuring your travel arrangements are organized to meet all of your business needs, factoring in efficiency, safety, schedules, and budget.

Stuart Birkin, CTM’s Director of Strategic Client Partnerships explains, “We are here to provide tailored travel management solutions to our customers which focus on driving value through savings, safety, and efficiency. We do this through providing customer service excellence, innovative technology, and regular program review and optimization strategies that take into consideration current and evolving market conditions to maximize opportunities. Cost savings is not solely about achieving the cheapest hotel rate or airfare; It is also about being able to demonstrate a return on investment. Did the organization retain or win new customers, launch a new product, recruit and train more staff, or open new office locations as a result of the business travel? Did the business gains outweigh the expense? This is important as the cost of not traveling can be far greater.”

Travel policy compliance

A well-designed travel policy can deliver significant savings. Consolidating your business travel spend into a limited number of preferred supplier partnerships, defining optimum booking behaviors based on your organization’s unique travel needs, and encouraging product choices that align with traveler experience objectives are all ways to positively influence your budget.

Maximizing compliance with your organization’s strategic travel policy is key to achieving efficiencies, cost savings, and safety. Organizations that experience challenges with travel policy compliance can take measures to reduce out-of-policy bookings and lost savings.

Amy Lloyd, CTM’s Head of Client Management, Western Australia says, “We encourage our customers to drive bookings via their chosen online booking tool (OBT) to support travel policy compliance. The OBT’s ability to capture reason codes for out-of-policy bookings is vital for compliance visibility and to aid future training, which CTM conducts as part of our strategic account plans at regular intervals throughout the year. This keeps Travel Managers informed of missed savings opportunities and keeps business travelers and Travel Arrangers informed and refreshed on travel policy best practices and changes.”

Online booking tools and travel approvals

Organizations that are not currently utilizing an online booking tool may be losing out on savings opportunities through inefficiencies and out-of-policy bookings. “Utilising a self-service corporate booking tool is an easy way to lower booking fees and improve productivity with access to all your policy-compliant content in one place”, says CTM’s Head of Client Value Management – Asia, Molly Choi.

Having your travel policy integrated into an online booking tool will reduce non-compliant bookings by only displaying travel content from preferred suppliers or those that meet applicable rate caps. An integrated pre-trip approval tool will also assist to minimize spending on unapproved travel activity while streamlining the booking and approval process for significant efficiencies.

Booking behavior analysis

No matter how large or small your business travel budget is, it is important to understand how to maximize those dollars with best practice booking behaviors.

• Are travel dates flexible, and do you have an easy view of pricing highs and lows to identify the cheapest time to travel?
• Are expensive flexible/refundable airfares being purchased unnecessarily when compared to the frequency of booking changes made? Booking cheaper/more restrictive airfares can present significant savings.
• What is the purpose of travel and how productive will the traveler be? Have they scheduled their day with meetings or events to maximize their time away and the travel budget spent? Did they book their travel in advance to leverage maximum availability and the lowest rates?

Sarah Tauri, CTM’s Client Value Manager, Queensland explains, “One factor that is currently influencing booking behavior is the mass recruitment of new employees within organizations. This creates new and often non-compliant booking behaviors such as requesting new hotels, new locations, and changes to advanced booking practices. Businesses should incorporate travel policy training into the new employee onboarding experience for relevant employees to ensure travel policy knowledge and booking behavior expectations are delivered to maximize the travel budget.”

Unused travel credits

Travel credits are a simple way to use the pre-spent travel budget for future flights. At the peak of the pandemic, organizations were forced to cancel large volumes of flights leaving high volumes of unused travel credits.

Recommendation:

• Ascertain which employees have ceased employment and update travel profiles accordingly. For former employees with travel credits on file, confirm if the airline allows for name changes and re-assign credits to other active travelers for future use.

Advanced purchase

Business travel can be unpredictable. Where possible, it is recommended to book in advance to secure the best fare/rate of the day and maximum product choice. This is currently important with both domestic and international travel, as post-COVID travel demand may outweigh schedules and servicing.

CTM’s Fare Forecaster tool assists businesses to achieve savings through better-informed decision-making at the time of booking. Fare Forecaster displays the cheapest fares available 7-days on either side of your selected travel date, including your corporate travel deals, so you know you’re seeing all the options that matter. This intuitive tool enables flexible business travelers to quickly and easily shift their travel plans to leverage the cheapest time to travel.

Preferred suppliers

A TMC should be able to analyze and review your business’s travel behaviors and spending patterns to get a comprehensive understanding of your specific travel trends and requirements.

CTM specializes in strategic supplier management as a key component of travel budget optimization. We aren’t afraid to ask questions that ensure suppliers remain competitive, affordable, and relevant to your business needs and interests. Based on this information, CTM can often negotiate significant discounts and add-ons by implementing preferred airline, hotel, and car rental agreements that meet the needs of your travel budget and duty of care while elevating your employees’ travel experience.

CTM’s Executive Director, Account Management – North America, Monica Colligan says, “Our Account Management team has always promoted and supported preferred supplier programs with our customers. This is more important than ever as so much has changed since the pandemic, with customers seeking greater flexibility and value-adds to support travel budgets and traveler well-being. Our smaller SME customers also benefit from our robust CTM Hotel Program, air, and car discounts, providing cost savings with every booking.”