A study by global distribution company Amadeus discovered that 70% of travel managers planned to cut business travel spend by 25% but had no clear strategy to achieve this. Wexas Travel Management’s experts share a few tips on how to reduce the business travel budget.
Amadeus commissioned management consultant Hermes to conduct a survey of travel managers which found that business travel spend is divided among air (70%), hotels (21%), other (7%) and service fees (2%). So how can travel managers cut their business travel spend?
Service fees may account for nowhere near the expenditure on air and
hotels but business travel savings can still be achieved from improving
processes, monitoring and implementing self-booking tools.
Online adoption can reduce a company’s business travel costs. 92% of business travel bookings made by companies in the survey are currently for simple point-to-point journeys which can be booked online to save costs. Travel managers should aim for 100% adoption of online booking for such trips.
The remaining 8% of bookings are for multi-sector journeys which are best done offline via a travel management company.
The study revealed that 18% of corporate bookings are with low-cost carriers yet they represent a lower proportion – only 14% – of corporate spend. Analyse the routes that your travellers fly most frequently and then aim to book low-cost carriers when feasible if there is a low-cost alternative from a nearby airport.
Driving compliance to corporate travel policy will maximise your opportunity to make savings on the corporate travel budget. Making corporate travel policy simple and clear is key to this. Build the policy consistently into the online and offline booking channels. Identify key performance indicators (KPIs) to measure policy compliance.
Pre-trip approval tools are an effective means to enforce your corporate travel policy and in turn encourage early booking of business trips.
Companies with stricter travel policies have travel and expenses costs 23% lower than companies with looser policies, the survey found. Measure your travel policy compliance to identify the return on investment (ROI) of the business travel policies you have implemented.
82% of indirect business travel costs come from routine tasks such as booking trips and the processing and handling of expense claims. Having assistants and travel bookers handle travel booking and expense claims will minimise indirect labour costs related to travel.
80% of all business travel and expense costs are generated by only 16% of business travellers, each of whom will take an average of five business trips per year.
To dramatically reduce your business travel and expenses budget, ensure these frequent business travellers and travel bookers are properly trained to use self-booking tools.
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