If You Can't Measure It, You Can't Manage It: 6 Key Data Points to Diagnose your Travel Procurement System's Health

I often visit organizations with unmanaged or lightly managed travel to help them gain control of T&E. The biggest challenge is collecting complete and concise data on what their team is spending - regardless of where the trip’s components are purchased. If nothing else, new tools allow your organization to more easily aggregate all your data into a series of reports that can be used to evolve the right policies and procedures with which to manage this significant line item. Your leadership and rogue travelers aren’t going to jump on board with any system unless you make the case - with data - that managing versus simply purchasing this line item makes sense. What I have also found is that the savings opportunity alone (there are other benefits of managed travel) is between 10-20%. Following are six initial data points to diagnose to quantify the lost opportunity of rogue bookings and evaluate your tolerance for the loss:

1. Total volume. Overall, by product (air, hotel, car, sedan,etc.), by department, by cost center.
2. Average transaction cost compared to plausible benchmarks. Topaz International and other third parties provide this data, as do many TMCs.
3. Lost opportunity compared to lowest fare available. What the lowest fare was for the itinerary compared to what was selected by the traveler. This data is often available from TMCs and can’t be secured from public sources.
4. Preferred supplier performance and/or opportunities. Air program, hotel, and car. If you have them or, if not, where your volumes lie.
5. Travel purchase by source. What was purchased from your TMC, then online and call in with your TMC, then alternate sources (public sites, supplier sites).
6. Policy compliance. If you have details in your travel policy about what the company expects travelers to select (fares under $500 or within range of the lowest fare, per diem rates), how did the team do with compliance? Measure it within your suggested travel program. 

Often the mistake that is made is that a travel booking process is suggested, yet not required because the organization believes that all rates and rate sources are created equal and the only difference is the fee. So the team thinks it’s doing well by minimizing or eliminating the fee. Common wisdom is that the fee is 3% of the trip and the rest is 97%. So watching and managing the entire cost of a trip should deliver better results. The above data will help you do so.

 

How to collect all this data is a common challenge for those without a tightly managed program whereby the data can be provided by your TMC. Expense report data from your ERP is useful. Credit card data is usually helpful if everyone is using your corporate card system (another missed opportunity with many rogues). Then with data aggregators like TripCase corporate or Triplink you can at least require everyone to forward all bookings to these tools for complete data integration and evaluation while enhancing duty of care.

 

We have found that from this evaluation will come reasonable policies and procedures to better control this size able line item. We wish you luck! 

Three Things to Consider when Communicating a Travel Request to Ensure Consistent Results

With all the forms of communication we have out there you would think the world would be communicating better. We all know that is not true. Because we can communicate in so many ways, many of our communications aren’t complete, clear or effective. This especially happens in the communication between our agents and travelers. Travelers hope to get their request for travel off their desks and many times this request doesn't deliver some key facts we need to ensure the best value. Here are three concepts that we train our people to secure before delivering their consultation.

Results. The trick is to understand what the person wants to accomplish with their travel request. The impact or the result of the trip. We have called this the experience identifier question. What has to happen over the course of this trip for it to achieve the results you desire. It's important that we know what the purpose of the trip is and what the drivers to the traveler are. They may be arriving or departing at certain times that are in and around other requirements, staying near a certain location, getting in and out quickly or not, closing the deal, etc. I will quickly add also that the goal and the result are two different things. So my goal may be to get to Chicago by a certain time and back by a certain time but the result is much more. Knowing this allows us to provide better service.

History. This refers to what the traveler may like or not like based on their history about travel, that location, that trip, previous experiences, the trip requirements. When the traveler gives a detailed history including some or all of these items, the agent had a much better idea of what to include, what to avoid, and how to make the experience right for that specific traveler.

Tools. Tools like what frequent flier memberships, hotel programs, and knowledge the traveler may have are important as well. Most of this is usually in the traveler’s profile but reminding us of tools and preferences is useful. At times these tools allow us to uncover better rates or availability with this status as well. 

The basics of a travel request are pretty clear but embellishing requests with these concepts will improve communication and deliver faster better results. 

The Pros and Cons of Some Relatively New Travel Technology Tools and What to Consider

Experts predict that 2015 is the year big data will revolutionize the way we conduct business in the world of corporate travel. While every reservation--from airline to hotel to car to train--has always left a data trail, the increasing use of travel sites and tools, expense integrated with travel, smartphones, and widespread availability of Wi-Fi has brought with it an avalanche of data that can help improve the travel experiences. At the same time, with these opportunities, needs, and expectations come some potential cons for the traveler, and the company who purchases corporate travel. Here is a glimpse into some items to consider:

1. Personalization

Big data allows companies to track and extrapolate the needs and buying trends of the modern road warrior. This process, called personalization, is fast becoming a game changer at some travel sites. The travelers feels their wants and needs are considered, as they can immediately secure their preferences. Booking travel is a complicated juggling act with a lot of moving parts, including choosing an airline, seating preference on the plane, hotel location, preferred amenities, and required technology interfaces. Imagine the stress relief involved in seamlessly booking a business trip without having to continually regurgitate preferences for a morning flight with a window seat and in-flight Wi-Fi, and the need for a hotel with an in-house restaurant that will cater to dietary restrictions. Conversely, if a company has its set of preferences and wants its travelers to consider the widest range of fares and rates every time they travel to ensure the best value to the company, these tools can usurp these considerations. These tools (mostly supplier sites and public sites versus corporate sites which are skewed to company preferences) are set to say “Let’s not look at all the opportunities, let’s just give you your favorite airline, hotel, and car regardless of price and even company preference”.

2. Merchandising

Now imagine the traveler booking scenario above – booking through a public or supplier site - followed up with a notification to the traveler that a tremendous deal is now also available to upgrade their seat to an aisle or premium economy, speed through check in, have a bag fee waived if they purchase something else, or take advantage of a deal at their favorite tropical vacation spot. I’d even argue that airlines changing frequent flier programs so that miles are based on the flight price is opening up more merchandising. While some of these merchandising opportunities may make the travel experience improve, these opportunities may drive up cost (even in expense categories that you may not have ever even been addressed in your travel policy). They can also distract the employee from their core responsibilities with more spam and more considerations.  

3. New Travel Related Costs.

In the fall of 2013, 40 airports participated in the TSA PreCheck program; as we begin a new year, the number has jumped to 120 airports, with over 725,000 members enrolled in that time period. There aren’t many cons to these concepts as maneuvering through airports has become increasingly difficult. The only consideration in these opportunities is whether you will pay for the likes of them and how this is addressed in your travel policy. Add to these relatively new options (most of which I do not see addressed in any travel policies I have seen recently) including Wi-Fi costs on board aircraft, seat selection improvements, hotel and car rental add-ons and more. Who gets reimbursed for what, where do these line items go, and how much more time does it take to reconcile expense reports? In a recent T&E budget assessment in an RFP we received, it was determined that the company was spending more money on Wi-Fi during travel than on travel agency fees. And the entire RFP was focused of agency fee reduction. The automation of expense reporting is helping manage these challenges as more data can be evaluated.

4. Data security importance

Finally, some of the biggest news stories of 2014 involved data breaches within companies such as Target, Home Depot, and eBay. While the potential theft of information like credit card numbers and home addresses is unsettling at best, the information typically held by those types of companies pales in comparison to the wealth of information that travel necessitates. In addition to addresses and credit cards, business travelers--particularly on an international trip--must contend with frequent flyer numbers and ID cards or passports, not to mention confidential business-related data that may or may not need to be part of checked baggage. As the creation of new travel opportunities increases, so does the responsibility to keep travelers (and their information) safe. Ultimately, while there is always risk in navigating uncharted territory, the opportunity to do business and expand your horizons to see the world makes it all worthwhile. As everything from hotel internet access expands along with a rise in travelers using hotel apps to book, check-in, and secure concierge services, so does the risk of where data may end up. The bar has been pushed even higher, with many hotels beginning to utilize a mobile app as a hotel room key, thus allowing guests to bypass the front desk altogether. A convenience, but perhaps also a potential threat in that someone knows when they enter and depart their room? Then, while the ability to book a flight and reserve a hotel room online is nothing new, the switch to and focus on mobile capabilities is. While only 2 percent of passengers preferred using a smartphone for booking travel in 2012, that number is expected to jump to 70 percent in 2015. Because travelers are rarely separated from their phones, the larger value of mobile technology may reside in its ability to provide a seamless experience while in transit. With the advent of Geolocation, you now have the ability to receive status updates based on what part of the travel process you are in, from security lines to flight delays to full itinerary changes. Presently, half of U.S. airports offer mobile updates, and, based on your personalized preferences, they can even direct you to a good place to eat during your layover. Geolocation tools can also help advise and track employees when in “at risk” countries. For some travelers and countries people knowing where you are at all times makes them uncomfortable and maybe, in some instances, at risk. Also, knowing where your travelers are can be a risk if that data falls into the wrong hands. What is your best practice? Determining your culture and stand on these tools is important to consider and address.

 

As the creation of new travel tools increases and provides amazing opportunities to share and consider, so does your responsibility to address these items in travel policies to take control of your organizations costs, productivity, and safety. A dialogue and communication on these subjects will ensure an evolved travel procurement system that is good for the company and its travelers.

The Perils of the "If It Ain't Broke Don't Fix It" Attitude in Travel Management

I often hear that if it ain’t broken don’t fix it when it comes to many travel management programs. The issue is that many of the people who respond this way wear many hats - one of them being travel - and for the most part they focus on trip planning versus the management of this line item and the opportunities that go along with it. Many of you who read my blog have an idea that things may be broken that could impact the line time of T&E significant and know enough to enough that they need to know more.

So my question is often “why do so many organizations stay with the same way of working, often for many years, when it’s really not delivering optimum results?” From my experience, I would say the schools of thought likely fall into at least one of the following four camps:

 

1.       I am way too busy!  We live in a busy world with hectic jobs and high expectations. If you think that travel is under control because no one is complaining, I recommend that you ask yourself why. Is it because they are getting whatever they want, and then you have to ask at what cost does that come at? Can you place a value on the missed opportunities before you decide it’s not broken? You may uncover a whole host of improvements that can be made. And if time really is stopping you, send your data to handful of travel management companies, who will be more than willing to do this for and share their recommendations.

2.       Lack of Travel Procurement knowledge.  For most of our customers, travel is one of those things that seems to get added on to an existing job role or is a small part. As a result, sometimes the person responsible doesn’t know where to start. If this sounds familiar, reach out to a few TMCs, consider joining the Global business Travel Association, or even grab my book The Secrets of Effective Business Travel Procurement for tips on how to get started. You can get your free copy here. There are also consultants who can help identify opportunities and determine the right partners.

3.       Buy-in.  Making a change isn’t going to be successful without the support for your executives and other stakeholders, regardless of how much work you put in. Put together a travel team and ensure senior management endorses the project. Keep this group engaged throughout the entire process, you’ll be grateful for their support when you come to implement a new solution.

4.       Lack of resources.  Changing systems or even suppliers can be daunting, especially when travel is such a personal subject! Worries over resources and the cost of change can lead people to think ‘the grass isn’t always greener’. But if you choose the right travel management company, the change should be well managed by your new provider every step of the way. Their knowledge and expertise should make things as seamless and as smooth as possible - and, if you’re doubting their abilities to make this change pain free, they’re probably not right for you.

 

What are your challenges and questions? I would be happy to answer some question here and use this forum for you to secure advice from others like you. It’s always great to start a year safe in the knowledge that your travel management is in good hands. If not, check out the resources mentioned above, consider getting some second opinions on your business travel and when you’re ready to take the plunge, check out a webinar we are hosting next week on the A Travel Insiders Guide to Getting the Best T&EValue in 2015.

Open Booking: A Possible Distraction Dressed Up as an Opportunity

We have discussed open booking before in the blog. It is the concept of allowing some pieces of travel requirements to be purchased outside of your Travel Management Company (TMC). Some corporate travel professionals believe that the established travel management model—travelers booking at published and negotiated prices through global distribution system-powered travel management companies—is broken. Many travelers don’t want to play that game anymore when they think they can buy better and cheaper without corporate interference.

So what’s the solution? I have shared before that there are some legitimate reasons to book some items outside of your TMC. Philosophically, I and many believe those instances should be approved and identified within your travel policy, there should be a system to add to this list of exceptions, and you should have a way to support these bookings. But this is a belief that travel management is the rule with some exceptions versus a belief that using these tools for travel anarchy is a better solution to control, manage, and procure T&E - the line item. As 2014 ended, I started to see the hype behind open booking as a method to handle travel slightly wither and a small return to the procurement principles we have discussed return. One of last year’s BTN Top 25 execs, KDS CEO Dean Forbes, even called it “failure dressed up as innovation.” The following story, originally detailed in Business Travel News, helps paint this picture and reinforces what some top travel managers think about this subject.

Stephan Hylander, Strategic Purchasing Manager for Marketing and Travel from The Volvo Group, was named by Business Travel News as one of the top 25 most influential leaders this year. What was interesting was why. He doubled down on travel procurement principles and rebooted his company’s preferred airline program, for which BTN named him 2014 Multinational Travel Manager of the Year and he now is in this year’s Top 25 list.

If corporate negotiated fares are going to stay relevant, they need to be literally the best deal in town, and that’s why Hylander persuaded his key preferred suppliers to agree to discounts on all fares, “even if it was only 1 percent lower” in the case of the most heavily discounted classes. “Our travelers should always notice they are getting a slightly cheaper fare ... through us,” Hylander said. According to Hylander, “the first time we spoke to the airlines, they looked at us with horror.” The result: a return to the traditional airline deal proving a win for all parties. For Volvo, average paid fares fell 10 percent in 2013 and another 2 percent in 2014. Travelers gained by knowing the easiest option also was the best-priced. And the preferred airlines won too, as typical market share climbed from 65 to 70 percent to more than 90 percent on key routes.

By ensuring all travel is booked in one place, Hylander could maximize leverage. Surely the leverage of Volvo is larger than the leverage for most of you reading this blog. That said, air, hotel, car, and even other expense category deals can be had when you can control purchasing and supply data. We have found that maximizing the four pillars of T&E Value should always be a focus. They are again: leverage your total volume for supplier opportunities, enforce the right policies at the point of sale, expand rate considerations without bias, and utilize pre-trip approval systems for exceptions.

Credit —Amon Cohen of Business Travel News.

I would love to hear your comments. Hopefully you learn something from me and I would love to learn something from you!

Ten Scary Travel Risk Questions Which Help Determine if You Need to Look at Travel Risk Mitigation.

The insurance industry provides coverage for when things go wrong. With a volume of travelers on the road, things can go wrong for the traveler and the company with impacts felt in many ways. From medical emergencies and accidents, to weather events, plane crashes, or even terrorism, companies should be prepared and most are not. If you don’t know if you need this and do not know what to ask yourself, you are not alone. Please take these questions to your executive team – to include legal and HR - and see what they feel most uncomfortable about and then ask for help. From your overall insurance provider to specific travel risk mitigation companies, there are tools and solutions.

1. Have you ever had to find and support travelers after an event like a plane going down, an earthquake, terrorism, or catastrophic weather event - or could you realistically have to?
2. Do you offer any pre-trip intel and alerts to your employees/travelers today? If yes, how, with whom, and are you comfortable with the reliability of this data and frequency?
3. How do you track all travelers and assets, and do you rely on others to communicate on the company’s behalf to travelers already on a trip or in route to a destination?
4. Do you have travelers being sent into high risk locations that you believe are not prepared for travel? Do you have a way to determine which places are high risk?
5. Would you claim you have a duty of care or travel risk management system in place? What is it and where would employees find it?
6. How do you assess how many travelers you have globally and where do they go to determine the level and type of care required each year?
7. What support do you provide to travelers when they have medical emergencies or accidents on the road and how is the process communicated so they know how to use it?
8. How would security or medical evacuations be handled? With one number 24/7 worldwide? Does your security or medical response firm handle worldwide security & medical evacuations?
9. Do you have a Travel (Operational) Risk Program with communications, Travel Risk Management Policy, Travel Approval Process, and training?
10. Who is responsible for employee safety in your organization before and during travel? Do you have a corporate security team? If yes, how many people are there on that team?

If you are not comfortable with your answers here, you should have a risk assessment. We have partners who would be happy to contact you and provide this assessment. They can also share tools, best practices, and technologies. Please let us know how we can help you address these items. Thank you to our friends at iJET for helping us pull these questions together.

Be safe out there!

6 Tips to Take Control and Deliver a 10% Improvement on T & E Value Without Losing Your Mind

As the year begins and goals and objectives stack up like planes on a runway, we often times have to pick a few battles. I want to share the key items below that you may choose to pay attention to which would deliver at least a 10% improved T&E program for your organization in 2015. My recommendation is that you pick a few and do them well as this second largest controllable cost for the average company. In a few weeks we will be hosting a webinar that will deliver a more extensive review of what to pay attention to for 2015 in T&E; to register, click here.

1.      Measure advance purchase and eliminate outliers. Determine who buys tickets less than 7 or 14 days in advance and council them. Newly-released Travel Leaders data indicates that business travelers who booked their domestic airline ticket 7-13 days in advance saved 9% on average, while those who booked 14-20 days in advance saved 24% on average compared to those who booked less than 7 days prior to departure. This data also reveals that in 2014, 73% of all airline reservations were booked seven or more days in advance, and 47% of tickets were booked 14 days or more prior to departure. Even if they always buy their shuttle flights to New York the day before travel, remind them that they can save significantly by purchasing 7 days in advance. Even with cars and hotels, the general wisdom is to book early and book a flexible rate leveraging partnerships like you get from your TMC.

2.      Ensure unbiased fare search and reset policy thresholds that balance traveler comfort with company value. In recently years the incentive to a traveler to be biased toward their preferred suppliers has reached an all time high. If they book on public sites, those sites recall what that traveler likes and pushes back to them all their preferred choices without a deep consideration for price. With airline status you not only can qualify for upgrades but your status determines when you get on the plane, what you pay for bags, and more. Also, many airlines are distributing miles based on the cost of the ticket and not the miles. So higher priced tickets get more miles- which lead to better comfort. Bias can also lead to limiting the alternate routes which can be considered. 10 years ago there was one option to get from New York to Baku with just one stop. Now there are as many as 10 different connecting airports that can be considered. Don’t let your travelers become creatures of habit to the point of costing your organization time or money over which is reasonable to you. I am not here to say that these comforts aren’t important, but you should evaluate the cost and your organization’s level of tolerance compared to budgets, goals, and culture. Lastly, low-cost carriers like Southwest, JetBlue, and Virgin America are prime time carriers and should be unbiasedly considered. Then there are “ultra low-cost carriers” like Spirit and Frontier to address.

3.      Consider class of service adjustments and incentives. Maybe suggest Premium Economy versus Business class for certain long hall trips and Business versus First for certain tiers of travelers. For those of you that provide incentives if your travelers fly Economy instead of Business when approved per policy, maybe allow them to fly Premium Economy with a smaller incentive.

4.      Benchmark your results. There is plenty of data that can help determine how you are doing compared to other organizations. You may want to compare yourself to others and compare the results of those using your TMC and those going outside of your system. The average cost of international and domestic trips last year – including combined air, car, and hotel – reached a five-year high. The average international trip cost in 2014 was $2,525 as compared to $2,461 the year prior, and the average domestic trip cost in 2014 was $990 as compared to $956 the year prior.

5.      Leverage Deals. Most companies can have some sort of preferred supplier program. It may be a car deal, airline rewards program for the company, a contractual discount, or hotel agreements with your most frequented properties. Knowing what you spend, using the data to ensure you have the best deals with the right suppliers (a good account manager from a TMC should help you), and directing your people to those deals in all the right situations will help you win. With air, car and hotel, ensure all road warriors join at least one frequent flier or preferred club like National’s Emerald Aisle. Most people sign up for all the airline programs but for car and hotel hidden extras are found. Emerald Isle for example lets you bypass the counter and, more often than not, get a free upgrade. Address and consider who your preferreds are and who travelers probably should not use. Watch and address secondary brands like Ace, EZ Rent, Economy, Firefly, Midway, and many others who often leave travelers less satisfied with their experience resulting in challenges, issues, and productivity concerns.

6.      Leverage automated expense tools and their data to further direct value. With the increasing use of automated expense tools you could now more easily evaluate the total cost of stays and direct efforts to make better choices and negotiate costly extras – it’s not just the room rate. Is the Hampton Inn with an airport shuttle, free breakfast, and free WiFi for $129 a better option than the Courtyard by Marriott down the street with no breakfast and no shuttle for $115? What about the Ritz Carlton that is $359 as compared the Grand Hyatt at $329, but the Ritz Carlton includes free breakfast, free WiFi, and late checkout because the traveler is a customer of ours?

Take whatever tips hit you here and evolve your policy making sure that expected value is clear, including brand and price expectations. Use pre trip authorization to enforce what you come up with. If and when - and it will happen - someone wants a fare or rate that is outside the value policy the company put in place, have a system to say yes or no with the right data to make the right decision. Do a few of these well and make the most of your travel dollars while not getting yourself crazy. We can work on some more next year!

And remember, to learn more about how to get the best value on your Travel and Expense, register today for our March 5 webinar entitled:  A Travel Insiders Guide to Getting the Best T&E Value in 2015.