CASE STUDY: Cost Savings
Corporate Travel Management (CTM) delivers 21% cost savings through the development of a strategic travel management program.
Utilizing in-depth diagnostic analysis and expert industry insights, CTM was able to determine best practice policies and influence booking behavior, setting the client ahead of their cost-saving objectives.
Read on to find out how.
The client is a national electronics retailer with an annual travel spend of almost $2M.
CTM conducted a major review of the company’s travel policy with the aim of reducing travel costs for the business.
The key objectives were to design and implement a new travel policy for the client which would reduce total travel expenditure without impacting the number of trips taken. The key objectives were to:
- Implement a new travel policy and approval process to maximize savings.
- Achieve a target of $250k in annual savings on travel expenditure
- Increase transparency of purchasing behavior.
Without a formal travel policy in place, the client was unable to accurately monitor and analyze their purchasing behavior against the company’s actual travel needs. This lack of structure presented CTM with a number of challenges that would ultimately determine their ability to meet the client’s objectives.
- no formal structure or guidelines for air travel bookings
- an over-reliance on a single preferred airline
- an unsubstantiated dependence on fully flexible fares based upon a perceived need for travel flexibility
CTM first needed to fully understand the client’s existing purchasing behavior compared to their actual travel needs. This was achieved by conducting a three-month review of booking and travel trends to determine the legitimate need for flexible airfares versus the cost-saving opportunities presented by Best Fare of the Day.
Based upon the findings of the three-month trial, CTM was able to:
- Implement a formal “open-skies” travel policy utilizing Best Fare of the Day fares across two airline networks
- Develop a 14-day advanced purchase booking policy for domestic travel to maximize restrictive fare availability
- Deploy and manage a pre-trip approval process
- Run fortnightly Corporate Savings Reports to highlight further potential savings per booking
Within the first three months of implementing the new travel policy, the following cost reductions were achieved:
Travel spend decreased by 21% ($100k) in 3 months
By establishing a needs-driven travel policy based upon actual booking behavior and trends, the client achieved over $100k in travel savings despite a 10% increase in travel activity. This saving represents 42% of the company’s annual travel savings target during the first quarter of implementation. This result was achieved by reducing the company’s over-reliance on expensive fully-flexible fares by 40% and increasing domestic booking lead-in times.
Open skies policy shifts 50% market share to competitor airline
By implementing a stringent open-skies domestic airline policy, previously 100% dominated by a single airline, the client achieved a 50:50 market share between two airlines, increasing the range of best available airfares, schedules, and inclusions.
Talk to our expert team about how you can drive cost savings to your travel program.
Contact CTM today.