What you need to know
Getting your travel budget under control
starts with the assembly of an in-house
team of policymakers who vow to prevent
travel anarchy while clearly defining your
terms and expectations. A good policy will
answer why travel management is necessary, detail the value of expectations, cite
the requirements and give examples of useful practices.
The team involved in policy planning
should include you, a scheduler, travelers
and the finance team. After the policy is
made, one person should oversee its
enforcement and keep up to date on travel
industry policy. This could be a part-time or
full-time position based on need.
“The policy should state that every traveler takes the lowest fares within the defined
parameters,” says Terry Brennan, president, Williamsburg — American Express
Travel. “Travelers should stay at mid-sized hotel properties and rent midsized
cars. Everyone should deal with an in-house policy administrator, which will
keep organization.”
A realistic travel budget must be based
on destination costs versus a flat-rate
figure that is impossible to meet in all
travel locations. A rate for things like car
rental, hotel and food must be figured
depending on the median rates in that
city.
A policy needs to be revised annually
to adjust to economic and company
needs, and some flexibility is required in
any plan. For example, an employee’s
time may be more valuable than the cost
savings from putting the person on a
later flight, especially if arriving later
could jeopardize a meeting with a client.
Also, you want to make sure the
employee’s time is used efficiently on
any business trip. A policy should entail
what is expected of employees during
travel and ways they should make the
best use of time outside of the office.
Meeting with multiple clients during a
conference or calling on one located en
route are a couple of ideas to maximize
the value of a trip.
Some businesses use online booking
agencies, believing their rates will be
lowest and eliminate travel management
company fees, which can account for 3 percent of all travel costs. But the majority of costs — 97 percent — goes to airfare, hotel and car rental, which is the
same arena in which a travel manager
will save money.
While travel costs are unlikely to
decrease anytime soon, getting through
the initial pain may be the biggest challenge facing business.
“The cost increase is felt the hardest
initially,” Gurley says. “However,
increases and a poor economy have
resulted in a reduction in routes traveled
— about 12 percent fewer flights are
available today than even a year ago.
This figure will increase and companies
that considered reducing travel to be
cost-effective will find flying increasingly less attractive into 2009.
Optimistically speaking, the economy
will eventually level out, but being prepared will mean better opportunities.”
