If You’re Budgeting For Travel Costs In 2015, Go For Neutral To Single Digit Increases Across All Regions

American Express Global Business Travel released its 2015 pricing outlook last week. In the outlook, Amex forecasts worldwide air, hotel and rental car pricing "to be neutral to slightly higher across all regions," with variance across geographic markets and supplier categories. On tap for the United States are low-to-mid-single-digit percentage increases in each of the three major travel supplier categories. Europe, meanwhile, will see a mix of increases and decreases. Asia pricing should be up, but at a slower growth rate compared with recent years, while Latin America projections range from modest declines to modest gains. Amex cited an "improving economy" and "capacity discipline" by airlines in North America as it projected airfares in the region would rise across the board next year: Short-haul business-class fares are projected to grow year over year between 2 percent and 6 percent, long-haul business class will be up between 1 percent and 4 percent, short-haul economy is projected to increase between 2 percent and 5 percent and long-haul economy should be up no more than 3 percent.

North American hotel rates, meanwhile, are projected to be "buoyed by favorable economic growth, increasing demand, and a lack of new inventory," according to Amex. "After an extended period of relative weakness, hotels are looking to capitalize on favorable market dynamics to increase profitability." In North America, average mid-range hotel rates are expected to increase up to 6 percent year over year, with upper-tier rates up between 3.5 percent and 7 percent from 2014 levels. Car rental base rate growth in North America should be more modest, rising no more than 1 percent, according to Amex, which added that it is "likely that rental companies will work with their customers to keep their corporate rates generally flat next year."

For more information, guidance, or a deeper dive into data for planning, let us know how we can help.

Are You Managing Travel or Managing Trips or Both?

“Begin with the end in mind” is one of the Seven Habits of Highly Effective People. This should be the mantra for any major initiative. In travel procurement we often run into organizations who focus on managing travel (the line item) because the buyer of travel is driving the decisions. That person is often the Travel Manager, CFO, or similar. In other instances the decision of what to do (or more often what not to do) is based on the end user, or the travelers. In my experience exponential value is created when we are working with an organization trying to find the ying and yang (balance) between benefits that the organization should want and expect in managing T&E, and benefits that travelers should want and expect. Make sure you know what both sides can expect and add that to what you should expect to determine your goals and objectives with balance and consideration for both sides. It’s a good time for an assessment for the coming year. Then in understanding the potential and this desire for balance, filter requests and comments through these objectives before making any decisions. Here are some examples:

 

• Supplier display and speed - Many public travel sites recognize what the traveler has bought before and limit the display to what the traveler is likely to buy again. That’s a happier and quicker experience for the traveler, but does your organization want the buying decision to be strictly the preference of the traveler or the best available unbiased options every time?
• Traveler Tracking- I have heard travelers say that they don’t really want people to know where they are all the time. I have seen lawyers for companies explain that knowing where their travelers are all the time is a corporate responsibility.
• User interface- Many times advertisements for cruises, tours, packages, offers, and other products make sites look more exciting and user friendly, but are these advertisements simply distractions to your corporate travel policies? Yeah sure business travel buying technologies do need some updating but so does your CRM and ERP. These are all tools focusing on the job at hand versus an experience. What is important?
• Supplier preference- Is it the travelers preference that is the driver or the organization’s preference for the greater good of all that should be driver of the buying decision?

As in anything balance is required.

Why Your Superhero Road Warriors Need a Sidekick

Many travelers feel that they can make travel arrangements on their own outside of the company system just as well as the travel provider. Sure, making travel arrangements isn't difficult but by making these arrangements through a Travel Management Company they receive sidekicks (Batman has Robin and the Butler) that will help them defeat evil villains like Money-Waster, Time Cruncher, Plan Changer, Control Resister. Here are a few things they can do when they have such a sidekick that are good reminders of the benefits to them of working within your travel procurement system (Batman always did what was good for Gotham and him):

• Leap tall supplier cancellations and changes with a single phone call. 
• Leave you to do your job fighting villains versus the menial tasks of shopping for the right reservations, changing reservations, expensing reservations, and more. 
• Jump into battle with someone covering your back and providing you with useful data to accomplish your task. 
• Confirm your decisions making sure its good for you, Gotham, and the Butler.
• Maintain your secret identity by making sure only the right people know who you are with data security control you can understand.
• Ensure the data you need to fight your battle comes from every source in an unbiased fashion.
• Get you upgraded when appropriate with the right cool tools and equipment like a bat car versus a compact.
• Provide the right seats so that you are rested and ready to jump into battle.  

Even Batman needed Robin and the Butler - and they were always by his side when things went awry. Don’t be a Joker.

5 Advantages Gained by Establishing a Centralized Billing Program with a Credit Card Company

Saving time and money is the key to travel procurement and while other more expensive solutions exist to automate all T&E expenses, this is a very good first step in capturing more travel data with actual spend versus simply booked spend.

1. Gain Efficiencies with a Card-less Solution. Save your travelers from having to pay out of pocket and simplify your company’s payment and reimbursement processes by allowing these expenses to be on a company card. With less credit cards in use, less changes to numbers and expiration dates saves time.
2. Gain control and visibility over more travel spend. Have more complete data on spend including air, hotel, car rental and rail costs. Effectively monitor and manage traveler’s expenses by consolidating virtually all your travel expenditures into one account, one bill, and one payment. Ensure preferred supplier and travel policy compliance, access spend data that is meaningful to your company and improve spend visibility to assist with supplier negotiations.
3. Reduce traveler responsibility for payment without issuing cards. Travelers do not have to use their cards for a large portion of travel and this service can be provided without issuing cards for travelers. This can be especially useful when you have contractor and other non-employee types requiring payment for travel. This system can be combined with a program that includes the issuance of cards for certain employee types.
4. Provide Travelers With Access to Benefits. Many of these programs offer enhanced business travel accident insurance, baggage insurance, and some 24-hour emergency service. Points can also be a benefit.
5. Streamline Reconciliation. Account Reconciliation systems enable you to streamline and reduce the reconciliation cycle by days or weeks. It can be configured to the requirements of your financial systems to lessen IT programming time and costs. You can even have the capability to reconcile transactions and edit multiple transactions in a single step. You can enhance individual BTA transactions with your organization’s HR data. Allocate transactions to the appropriate cost center through account code validation. Save time by not having to request and receive missing data.

There are many ways to process travel payments and many times of cards and brands of issuers. Seek a consultation on the options and time and money can be saved while helping travelers facilitate the payment of this significant line item.

What is Ethical when it Comes to Making Travel Arrangements? 7 Tips to Keep Your Organization from Going from DIY to DIFM

What is ethical when it comes to using company paid expenses to enhance personal gains? What is ethical when it comes to taking personal gains when negotiating with suppliers? Company culture, standards, policies, training, HR, and legal responsibilities come into play when establishing policies on items like this - and travel is no exception.

The government asks its contractors to report any gains a company may get from suppliers for expenses paid for by the government. It wants to be aware. In a recent article from PCMA’s Convene Magazine, ethics was discussed in regard to what a meeting planner should and should not accept when in negotiation with hotels while planning a major event. It also suggested that policies on such matters should be clear and in writing.

Do these ethics and your culture get considered when booking travel? Are these standards in writing? It may seem insignificant to you that a traveler wants to go to their favorite website to book travel to maximize miles and influence, use their personal card for these charges to also gain miles and influence (while slowing down the expense process), and the same with their hotel and car expenses regardless of what is in the greater good of the company paying for these expenses. The cost of these items is significant when your company purchases many trips if complete travel anarchy is in place. Plus, there is a want to find out the impact.

Here are a few keys here that are important to consider:

1. Some of this influence is important and should be respected as travel is hard on road warriors. Business travel should respect the company and traveler.
2. There are surely thresholds under which would want to let employees make the call to support their preferred supplier and over which approval should be sought.
3. If you have preferred suppliers as a company, make sure people support them and explain why it is important to do so.
4. The extra time it may take to process expenses or make changes or support the traveler in case of emergency should be considered.
5. Your policy should address what is ethical and in the best interest of the company and why and people should be trained to it.
6. Travel should be booked in one place so you can monitor adherence and justify or quantify the decisions made.
7. This process and these policies should follow your culture, should comply with other HR functions, should consider what business you are in, and should be run by legal.

If before you know it, anarchy in travel spread to computer purchases, health insurance, and even office supplies, you end up with a DIFM (do it for me) versus what seems like a simple DIY (do it yourself) philosophy.

Six Ways to Determine if You Should Rein in Your Rogue Travelers

Millennials often shun the concept of a centralized managed travel system. They have come to learn that they know a lot more about technology than many of their more senior associates managing line items like this and they think that simply by technology access they can do it better. Most claim they are doing it to save money but more often than not proof of that result is not always available to those who hope to keep an eye on this significant line item. I would also mention that for years travelers have claimed they could do it better themselves even when they had to call multiple airlines. In every analysis I have been involved in the results didn’t prove these travelers right because many had their own idea of what the best value was (many times that perception involved their preferred suppliers and not the company’s). Do not get me wrong, their intent was not malicious but they many times end up feeling complacent with going to their go to suppliers and they did not always consider all the options in an unbiased way. This has been my experience, anyway. There are six ways to evaluate and assess these rogue claims to determine the CBA of this behavior.

1.      Benchmark. Compare the rogue average airline ticket, hotel, and car spend over the course of the year to those that are complying. There are ways to capture rogue and complaint traveler data these data via expense reports, card data and more.

2.      Bias. Run a report of spend by traveler and look for supplier consistencies. Are they always on American? Does it seem their hotel selection complies with policy?

3.      Policy compliance. Look at how you define value in your travel policy and what travelers should select in your policy to determine if even when they book outside your system they are making good selections.

4.      Cancellation cost. Check to see how many trips these travelers cancel and if they are using up their unused non refundable tickets or if they are incurring hotel or car cancellation charges at rates over and above the others.

5.      Deals. Asses the volume of spend you are investing in different suppliers and ensure you couldn’t be securing a discount or benefit from these suppliers as a company by managing spend within your system. If you have deals like this you must consider what you may lose by not having travelers use these deals.

6.      Compliance/Legal. When people go rogue how do you know where they are and if they get hurt or make the wrong buying decisions would the law be by your side. A chat with you legal team may help clarify legal obligations and even business plan compliance obligations.

With these few consideration you can put a number on the cost benefit analysis of managed versus unmanaged travel and make the right decisions. In this life we all have to comply with many sensible rules for the greater good- taxes, health care requirements, traffic laws, workplace obligations, etc. Not everything can go rogue and in my experience and in most instances, T&E is not a place to go rogue and not only because of trip. It is not just about booking trips and it is also about managing travel – the line item.

Five Places to Secure Data About T&E That Can Uncover Treasures For This Sizeable Line Item

We work with many small and mid sized companies who are ready to get a handle on their T&E spend. Sure their people can book trips a variety of ways but how do you know that you agree with what they have selected and they haven’t left some significant opportunities on the table for the company’s budget? Many don’t. They have no idea what they spend in many of these expense categories and don’t know how they stack up to others or even those within their organization. As a result they cannot quantify their missed opportunities and they cannot define what the company should expect them to do when making choices for travel. And you don’t have to be the travel gestapo to spot check and clarify expectations for big savings. By making sure that the company’s and traveler’s desires are respected, big money can be saved, expense processing can be streamlined, the volume the company spends can be leveraged for deals, and support and emergency care can be enhanced.

Here is where you can find some of this data.

1. Travel Management Company. When you direct all travel to one travel management company (we all have online and call in booking opportunities if we are focused on the business travel marketplace) you can access what was booked, policy compliance data, lost opportunity data, spend by department or customer or person , available unused non refundable tickets, and more. If you are assigned an account manager and have a corporate agreement with your travel company also, most of us will even help you benchmark your travel spend to determine treasures.
2.  Credit Card. With one central card system you can have a great deal of the data mentioned above but you will see actual spend versus what was booked (what the agency has). In addition entertainment costs also come into play here also. The data from those who book outside of your travel system can also be secured if you make them use your card system at least so you can compare how they are doing as rogues versus managed travelers.
3. Expense Systems. Popular today are automated expense systems that are pre populated with booking data from your TMC’s bookings tools and data sent to it by your travelers. These systems too have extensive amounts of actual data in many T&E categories.
4. Itinerary Management Apps. Trip Case and Trip It for example have upgraded versions that allow companies to aggregate data for trips booked and sent to these apps for you to review.
5. General Ledger. If nothing else this data has to fall into your accounting system somehow and some way even if spreadsheet expense reports and rogue travel is your norm.

T&E is the second largest controllable cost for the average company and it makes me nervous when I hear companies don’t know what they spend and cant easily get this data. Its my experience that when data is collected and the opportunities are assessed, treasures can be found is easily managed places.

25 Transformations in 25 Years: Start Up Student Group Customer Requires Creativity to Make First Event Ever a Major Success

We recently had a customer sign up who had very specific guidelines for their student groups. They needed MacNair to find hotels that could accommodate 200 rooms per night with 3 beds per room (so, we would have to locate a hotel that would have 200 cots). A place that would tolerate a large student group, was accessible to the DC Armory (either walking distance from it or metro accessible), and one who would be flexible on deposit and payment dates as this was a startup organization who did not know the response its first event would receive. Cash flow was king. We leveraged systems we use to develop a first rate RFP, researched likely properties, and used preferred supplier relationships to uncover and cajole a few potential options in short notice. We (with the customer) performed site visits and negotiated a great price with the appropriate number of rooms under acceptable terms that also included an additional block for parents and breakfast included in the room rate.

The result was that the customer's first event ever was a smashing success even in inclement weather (we hand held many through transportation challenges that weekend). They have gone on to expand their events and with our support have multiple blocks around the country including a block at the sister hotel of the initial hotel who was happy to have them and us back with a good history and track record and more accurate RFP.

Change Fees and Buckets of Money Left on the Table with Unused Non Refundable Tickets and What to do About it

Business travelers change their tickets often. We know this. The current airfare structure also incentivizes companies and travelers to purchase non refundable tickets and the change fees to re use them are size able. As a company do you know how much you are leaving on the table by not maximizing the use if these non refundable tickets and the cost to exchange these tickets? Not only are the unused tickets money left on the table-or should I say with the airlines, but the change fees required to reuse these tickets are significant. Customers in the United States paid a total of 2.5 billion in cancellation fees in 2012 as per the bureau of transportation statistics. Cancellation fees have even increased from $150 to $200 in more recent years. The interesting thing is that this bureau of transportation statistics does not collect the amount of non refundable tickets go unused, but you should for your organization. To digress, I am not a proponent of more regulation but disclosure of this data seems logical and useful for companies that serve the vast public and use public facilities and services. 

So what can you do as a travel manager to understand this amount and change policies and behaviors to better leverage this sizeable investment? Travel Management Companies like MacNair Travel Management offer a reminder to use these tickets on their corporate online booking sites, we offer reporting of the unused tickets to travel managers, and the cost of exchanging tickets is readily available on travel management summary reports. So yes this is yet another reason to manage and consolidate travel if your volume and losses are a concern and are significant. 

Ralph Nader, the consumer advocate, has been pressing airlines to account for the amount that have gone unused. At least you can take on is responsibility for your organization and deliver even more value. Current open booking trends can make this process more complicated but in a managed program, it is easy to control.

25 Transformations in 25 Years: Local Association Needs an Online Travel Solution for Staff and Non Staff Travelers.

A local association customer of MacNair’s needed reporting, itineraries, and traveler information for both staff and repeat travelers (profiled) and one time travelers (non-profiled) who were booking travel on their online booking site. The association wanted to be able to put all travelers booking within their site (including the non-profiled) on their corporate card. Meeting planners needed to get all travelers on board with using MacNair and improve their online adoption. As a result, we created two separate travel sites – both paid for by the association - one for profiled and one for non-profiled travelers. On the profiled site, travelers’ data would get saved. For the non-profiled the traveler would be responsible for inputting their TSA information at the time of booking. A meeting link was setup for each individual site and the meeting planner was able to receive a copy of itineraries and reports for both groups.

As a result, the Meeting planners had the ability to track all travelers (profiled and non-profiled) and would receive itineraries on each. This enabled them to mandate the use of MacNair Travel for everyone and online adoption jumped up to 89%, reducing fees while policies and procedures were enforced with quality booking data and trends that reduced ticket costs by 18%.

Ebola Issue Brings up the Need for Risk Management

As I watched the plane bring the Ebola effected doctors back to the US I thought about the risks my customers take in sending their travelers abroad for business - and even when their executives travel to unique places for pleasure. I also thought about the risks that occur when traveling in the US and was reminded of the tour bus crashing into people in Manhattan.

I attended a business meeting recently where Europ Assistance (a global travel assistance provider) gave me some facts and insights on the subject. 63% of companies have no travel risk program in place. They don't feel it will happen, don’t know the legal liabilities, don't know where to start, and don’t know the costs of a potential incident. One incident can surely be much more than the cost of putting a travel risk mitigation system into place. Think about the reimbursable costs, the time and disruption to the traveler and company, and the legal costs. 87% of the time an issue takes place the employee sues the employer. Yes, you have a business travel accident policy but what exactly do these type of policies cover? Then you have to ask is this policy combined with training, education and the establishment of protocols ( hotlines, approvers, contact systems, portals, alert opportunities, training, and more). These items minimize the impact for the traveler, their family, and the company - and reduce legal challenges.

The top three components of a great travel risk program include:

1. Prevention- intelligence, pre-travel training, crisis planning.

2. Monitoring – tracking, alerts, medical monitoring, records sent from TMC to provider.
3. Response - 24/7 response, protocols, insurance.

There are many decisions to consider in advance. Direction is required and we partner with companies for solutions. MacNair is having an upcoming webinar on this subject next month. If you are interested in attending or having a direct discussion, like or comment on this blog post

Improve T&E Program Compliance with These 3 Program Communication Tips.

Getting everyone on board with your Travel and Entertainment (T & E) program can be a challenge. I have found that these three tips make compliance improve significantly.

1.   Request compliance with your T&E system not just your suppliers. I often hear at kick off meetings for new customers that the company will be requiring everyone to use their new agency - MacNair Travel. While that may be true, aren’t you asking them to commit to the system that you selected to manage this significant line item with you TMC as one fulfilling supplier of this process? You want them to follow your T&E policies, your procedures for booking and filing travel expenses, preferred supplier agreements, security and more. And your TMC is here to help direct some of these items and support them. The process has many pieces that you have carefully selected. Sell your process. Maybe even name it.

2.   Make sure T AND E are addressed in your policies and procedures for everyone to understand. Seeing the big picture of the procurement ecosystem that you want them to comply with to manage this big line item makes for a bigger case for following this generally accepted procurement process. 

3.   Explain what is in it for the company and them. They haven’t heard the case for procuring versus simply buying travel. Explain it to them. Travel management is the ying and yang of making sure the company and the travelers are as happy as they can be together. A win-win. Win-lose scenarios never work out. So what are you looking to accomplish, what are the numbers behind it, how have you determined it will deliver an ROI. Then update this at least once a year with data from the TMC.

 

 

I hope this helps rejuvenate you on the opportunities and inspires you to relaunch with better results. This is the right thing to do

25 Transformations in 25 Years: Association Saves Fees and Fares by Implementing Online Booking Tool with MacNair Travel Management

An Arlington telecommunications association wanted a travel program that was high-tech and high-touch that would save on fares and fees. In 2002, they selected MacNair Travel Management to implement a program to provide top-shelf support and quality technology that would drive high online adoption rates, save money through policy creation and enforcement, and offer a wide range of fare savings opportunities. We implemented several important features: we implemented GetThere, an industry leading online reservation tool, we provided comprehensive kickoff meetings and on going training to introduce the association staff to MacNair’s team and technology, we helped update and enforce a new travel policy that clearly defined when online should be used, we helped the association justify their new travel program and policy decisions with data and best practices, and we instituted reporting system to include a central credit card reconciliation process that made their finance department giddy with excitement.  

Results:

The association's average ticket cost in the last year (we tracked from April 2013 through March 2014) was $415, which was far below the national average for the same timeframe of $545*, providing a per-ticket savings of $130. Based on its ticket count of 402, the association saved $52,260. Of these 402 transactions, 93% were online. The association's online adoption rate has increased by 30% since their first year with us in 2002 – that year the percentage was 63%. Since each on-line transaction saves $20 in fees over the industry average for full service transactions, the association saved a total of $7,460 on fees. Thus, the association saved $59,720 in the past year in combined airfares and fees. Twelve years later they are still finding a savings with us and still going strong.

*Numbers are based on national averages provided my Topaz International and GBTA

Uber and Lyft are cool. Can cool get you in hot water?

I love how technology is revolutionizing the world. I am amazed how bureaucracies like taxi commissions are being challenged by new ideas and products like Uber and Lyft. I even love how being able to book black cars and taxis online are making their way into our capabilities. I personally use Uber myself and love it, but I thought about how products like this need to be evaluated and vetted by your procurement team like every other supplier used by your company.

I have been watching taxi commissions trying to address the public use of these tools and can understand both sides of the argument on the subject. Governments have set expectations about what taxi services should have to protect consumers up until now and in most locations, services like Uber have not had to comply with these requirements. On the other hand, I have sat in bad dirty taxi vehicles driven by drivers that don’t know there way around for too much money. Drivers who don’t talk to me because they are on their phones with a friend, who have ancient technology on board, and who I have no easy way to rate their service.

As you may know, Uber gives you the capability to rate their drivers and even pick the highest rated ones. I am by no means trying to throw taxi drivers under the bus, but inconsistencies are rampant in a system that was developed to protect consumers and ensure quality. As in anything, I think that the answer of what to do with the revolution started by companies like this lies somewhere in the middle. Some regulation, more competition, and automation. I am pretty confident that that is where this will end up.

That being said, this is an example of the risks that your travelers can be obliging your organization to if you do not vet and pay attention to the suppliers used by your staff. If an accident does occur, if an executive misses appointment, if a road warrior spends way too much (price should also be vetted in the process), or your credit card data is stolen, there will be costs to your organization. I am not stating what your policy should be, I am only confirming that directing your people to approved suppliers is a good habit. I will add that many limo companies and rental car companies are trying to play catch up, and they too are an option that should be considered.

Is this addressed in your travel policy? Do you tell your travelers which process to follow, which suppliers to use, and which payment system to utilize? The recommended process, your preferred suppliers, and why should be identified. As always, engage your travel squad (a team involved the most in travel who helps evolve your travel program including legal and HR staff). Then, finally, tell your TMC what to enforce.

Do We Deliver Freedom to Our Customers or a Capability or Both?

I was asked recently by a friend of mine, who also happens to be business consultant, if ours is a freedom sale or a capability sale. A freedom sale allows the customer to gain freedom from the supplier by having them do something faster, better, and cheaper.  The capability sale brings a unique solution to a problem many customers have.

 

Your travelers and our agents would probably answer a freedom sale as we deliver a better trip faster, better, and cheaper than the traveler could deliver on their own. Your Travel Managers and our Account Managers would respond that it’s a capability sale because we are helping to create and manage a travel procurement system that the company neither has the expertise, data, personnel or time to do completely on their own. So the freedom sale is transactional (trip management) and the capability sale is the part that we do that is strategic (systems development or travel management) for Travel and Expense.

What about both? What we know is that when both are leveraged together well, the results are exponential – and it is exciting.  The right system is developed based on the right best practices, tools, and company culture, and as a result the transactions come out better because both the company and the traveler are as happy as possible.  So the key here is to make sure you are leveraging your TMC’s support on the freedom sale side (trips) and the capability side (travel). What we often find is that because travel management systems and processes are so unknown to so many, that the focus is usually solely on trip management.

Our focus for years has been on the development of a healthy travel management ecosystem that balances the desires of the company and its travelers. Guidance, training, education and evolution are at the core of the travel leadership consulting we intend to deliver to those who seek this capability. A great example of this is one of our customers who saved $250,000 out of its 1.5 million dollar travel budget and gained control and support in the process. Got freedom and capability?

How Do You Best Survey the Health and Effectiveness of Your Travel Program?

I would like to share that when surveying or measuring your travel program you should consider two best practices we have found to enhance this process. One, collect a net promoters score ("On a scale of 0-10, how likely would you be to recommend our travel program to a friend of colleague and why?"). Asking this question gives you a score to work on, it is one question so your number of respondents will increase, and the why at the end of the question allows for comments about anything that is very important to consider (good or bad). Then number two, separate the results into two different groups. Those who manage travel (the line item such as finance, your travel manager…) and those who take trips (the road warriors). The scores will be different as both parties have different goals for different reasons. Consider the opinions of these different sources will develop a more effective and logical set of follow ups. I remember being in high school and I must say that our cafeteria had the best food I had ever eaten. I remember the German baker and the amazing lunch ladies that would pump out amazing food on a dime. They never got any kudos from the students because we were all forced to eat there every day. They did win awards from the school district for their quality and value. So the scores will be different for legitimate different reason that you need to evaluate. We too have begun assessing survey results in these two buckets.

 

Learn about this and 13 other Key Performance Indicators to Determine the Health of your Travel Procurement Program at our webinar next week on May 29. Register for the webinar by clicking here.

Sure, your T&E costs aren’t the Wolf of Wall Street’s but are you managing the threats to this 2nd largest controllable cost?

In the movie The Wolf of Wall Street, Leonardo DiCaprio and Jonah Hill throw hundred-dollar bills in the trash, charter planes, stay in luxury penthouses, and toss cash off a balcony. The movie follows the trajectory of DiCaprio's character, Jordan Belfort, a party-minded stockbroker who spent 22 months in prison for market manipulation and running a penny stock boiler room in the '90s. When I saw the movie I also thought of his gross miss management of his firm's Travel and Expense (T&E) budget. One scene shows Rob Reiner – who plays Belfort's father and the firm CFO– freaking out over the fact that his son spent $26,000 on one dinner. Belfort then asks his business partner Azoff to tell his dad about "the sides." "What, they cure cancer?" asks Reiner's character. So while your T&E might not be that out of control and the abuses may or may not be illegal, can you access data that will assess your T&E spending so that you can identify dangers, opportunities, and strengths in this very significant line item? The data is available from your TMC, credit card company, and/or expense tools. It is easily available today if you have the right partners and the right direction from those partners. After all, simply telling your team to book where they want and make good decisions may have been the travel policy of Belfort's firm Stratton Oakmont!

To avoid these pitfalls and determine where you can determine the health of your travel program reach out to your TMC or join us on our webinar on May 29 at noon. For details on the webinar check here  14 Indicators of T & E Health for 2014 or contact Jess Cardenas at jcardenas@macnairtravel.com.

My iPhone was and will be even more my secret weapon on the road. How do you address communications and smartphone tools in your travel policy?

While on my trek to Everest base camp in Nepal my phone was my secret weapon. It was the single most important device that I had with me and I used it often. In thinking about this critical business travel tool, I wondered how companies should direct and advise their road warriors on the use of such a tool, what should be required as policy, what is recommended as important uses of such a tool,  and what is an approved expense. I would love to hear your comments, I’d love to see what is written in your company policy, and I’d like to inspire a useful discussion for those of you who would like to enhance how you address communications while on travel.



Power. A critical commodity. Charging my phone on the way to Base Camp.

Here are some of the ways I used my device and some observations:

Communication. I used my iPhone to communicate and had many options to enhance how this tool would operate. I checked with Verizon before I departed and understood the local charges. They were quite high. Many on the trip visited a local communications shop and purchased either a local Nepalese phone or a Nepalese SIM card. The other option is to communicate when Wi-Fi was accessible. I used FaceTime a few times, emailed the office and friends and family often from the phone, posted pictures and distributed updates on Facebook via the phone. To take it a step further, climbers at base camp had purchased a sleeve that turns the iPhone into a satellite phone. So from a communication standpoint, the options were endless. What do you direct employees to do and what constitutes approval for some upgraded communication tools when traveling to developing companies like Nepal?

Camera. My camera on my phone was the only camera I had. With a swipe of my thumb my camera was ready to take the amazing shots that I took. Panoramas, videos, selfies and more were easy to take, of high quality, and ready to post. I have had cameras before and others lugged around big cameras but I was amazed and satisfied with what I secured from this amazing device. While on work related projects do you limit what people are able to post or do you require or encourage them to take and post pictures so that the company is more engaged with the work related projects and activities that are going on? 



Me at Everest Base Camp. Photo taken with my iPhone.

Travel tools. I used it for my itinerary, boarding pass, confirmations, and more. These are all best practices for the most part. You could take it further in some parts of the world to secure an uber car, etc. (surely not in Nepal). Sharing best practices like this is also an important part of a great travel policy. Not all travelers are experienced in all types of travel (like travel to third world countries). They may assume they can do some things that wont work and may need to be directed to some other options. What do you do to train or brief travelers on before they travel for company business?

Maps/GPS. It was amazing to use this tool to map where we were on the trek. Many companies have tools to allow the phone to track where their employee is in case of emergencies. Safety and awareness are surely items to address.

 Medical. I am in my fifties with some failing body parts including my eyes. I used the phone for magnification and light when necessary. I wondered what other medical tools and best practices could be incorporated into the phone. Where should a traveler house and hold their medical details, lists of medications, right hospital to see in case of emergency, insurance data, evacuation data, etc.?

 Translation. I could get some Nepalese words and translation help from my translation app. I thought that some direction on how to secure some language knowledge before travel would be helpful and respectful.

Currency Conversation and Math. Determining the right currency conversion and the math that went along with it was extremely useful. Again with currency, there are many ways to secure foreign currency. What is your best practice and is it shared in your travel policy? 

Answers. Google anything when connected and you have your answer. That said, modern travelers want to know where to eat, what to see, what is dangerous, who to connect with, etc. There are many sources for this data. What is the best practice at your firm that sends your people to the right places while keeping them safe? 

Clock and Alarm. Knowing the local time and the time at home and elsewhere was helpful. 

Payment. Even some suppliers used their phone to allow me to pay for items by credit card that I would have needed cash for before. What is safe, what approved? 

I had the phone at arms length away in the side pocket of my hiking pants at all times and it was a revelation to see how useful this tool was and will be-even for this old man. I now know I could have used it more, been better prepared with it, and have some specific recommendations for our travelers. What are your best practices and how easily are they found?

On a sie note, one day in Kathmandu there was a street festival and while this impoverished country has significant hurdles to overcome, it's youth were doing what youth do worldwide. They were texting one another, taking selfies, and sharing pictures of the fun they were having. The world is coming together with tools like this and there are pros and cons to this. While seeing a Sherpa talk on the phone while hiking in the kumbu is a change from the past, the benefits and conveniences of these devices are powerful.

A Travel Management Company and Travel Agency are NOT the same thing. Clarifying can help your T&E procurement system

At times the challenge with introducing a new travel procurement program is that your staff can think that you have just hired a travel agency to help them with travel. First of all, many don’t think they need help booking their trip. Secondly, they have no idea what a Travel Management Company does versus a travel agency.

So let’s start with not needing help making their travel arrangements. Quality TMCs have both online and call in systems to make easy and complex reservations however the traveler sees fit 24/7 in a managed environment. They also have teams to construct complex muti-leg international itineraries or even change/support reservations when schedules change or weather disrupts the industry. So at one point every traveler is going to need some help to get out of a jam and/or save time. When we say a managed environment we mean that the resulting reservation will make the traveler and the company who is purchasing the trip as happy as possible based on some defined policies, procedures and systemic expectations.

When you Google Corporate Travel Management (CMT) you come up with the following Wikipedia definition: CTM is the function of managing a company’s strategic approach to travel (travel policy), the negotiations with all vendors, day-today operation of the corporate travel program, traveler safety & security, credit-card management and T&E data management. CTM should not be confused with the work of a traditional Travel Agency. While agencies provide the day-to-day travel services to corporate clients, they are the implementing arm of what the corporation has negotiated and put forth in policy.*

In other words, CTM decides on the class of service that employees are allowed to fly, negotiates corporate fares/rates with airlines and hotels as well as sets forth the use of the corporate credit card. The agency on the other hand makes the actual reservation within the parameters given by the corporation and develops, supports, and or enforces the desires of both the company and its travelers. For most companies “travel & expenses” (T&E) costs represent the second highest controllable annual expense, exceeded only by salary & benefits, and is commonly higher than IT and/or real estate costs. T&E costs are not only limited to travel (airline, rail, hotel, car rental, ferry/boat, etc.) but include all costs incurred during travel such as staff & client meals, taxi fares, gratuities, client gifts, supplies (office supplies and/or services), etc. Furthermore, this area often includes meeting management, traveler safety & security as well as credit card and overall travel data management. The management of these costs are usually handled by the Corporate Travel Manager, a function that can be part of the Finance, HR, Procurement or Administrative Services Department. As this function touches on all of these areas in some form and represents such a major corporate expense, it stands to reason that this function should have equal ranking within a corporation as any other major division and not be seen as a sub-set of existing departments

So if you fully leverage these travel management opportunities, communicate what you will be having your TMC do from a B2B standpoint, clarify the difference between the B2B relationship you have established versus a retail travel agency relationship, track the results, and share progress and expectations with you team,  you can expect more compliance with the big picture value you should expect.

*http://en.wikipedia.org/wiki/Corporate_travel_management

Travel Management Companies are Not Dead, In Fact They're Thriving

In a recent article by by Marilee Crocker titled Govt. Looks to Travel Agents for Lessons in Resilience , Marilee points out that the government has taken notice of the fact that in the travel agency industry, pointing out, “At the U.S. Bureau of Labor Statistics, economists who study productivity noted a significant and steady increase in the productivity of the travel agency industry—including both traditional and large travel sellers.”

Outsiders share with me all the time that they thought that travel agencies have gone away. I always have to explain how a Travel Agency (personal travel) is different from a Travel Management Company (business travel) and that the industry has been broken into niche markets. I also have to remind them that Online Travel Companies are travel agencies too and even have some humans behind them who consider themselves to be travel agents. We know from our experience that the increased use of technology has allowed us to grow as a company with less travel agents as a percentage of our larger size (35% of all of our reservation come to us through online tools we build, customize and support for our corporate customers) and with our travel agents who have kept pace with the productivity requirements of the business model by leveraging an amazing range of tools allowing them to do more in less time more effectively.

The article goes on to state that only the best can survive and have survived and they are investigating that mojo. I am glad we have it. I don’t see us going away any time soon (as a matter of fact this year is already on pace to be our biggest growth year ever), and these changes have made us a company that can embrace change. The rumors of our demise have been greatly exaggerated!

 

Marliee's full article can be found here:  http://www.travelmarketreport.com/content/publiccontent.aspx?pageID=1364&articleID=10562&LP=1

What is the Real Problem Regarding Rogue Behavior?

In a recent PhoCusWright survey it stated that 55% of travel is not being managed by a TMC (Travel Management Company). My experience in the marketplace has been that the real reason behind this high percentage is that no one is out there touting the benefits of a managed travel system for the company and the travelers. Travelers are focused on making their trips and the company should be focused on managing travel - the line item.

Who teaches mid sized companies the key tenants of a well managed travel procurement system – what I like to call the travel management ecosystem? Well, we do but not many more. The way to get business travelers to use a travel procurement system is to make the systems better and the benefits clear. The systems are getting better and with bigger data it's pretty darn great. Let's get our industry to teach travel procurement to the anarchists who manage every other possible expense except this one. Let's then help these believers address maverick spend in a meaningful way versus a way that seems to enable maverick behavior. Sales force and Google manage travel democratically yet uniquely. 

First Class Service to Third World Charm

As many of you know, I left on March 30 for Kathmandu to take the trek up to Mt. Everest Base Camp with my longtime friend and customer John Carney. Flying well makes a big difference. I left the US yesterday on a business class ticket with Etihad Airways and was very well taken care of. Business class included amazing lay flat sleeping, allowing full and complete sleep on the first fourteen hours of the flight,  a large screen monitor chocked with movies and programs, an amazing international crew, service, and food - and that was in business class. First class had even larger more comfortable quarters and supposedly a private chef.

 

I had a four hour layover in Abu Dhabi. The airline arranged for a meet and greet at the gate. This caring and smiling representative escorted me and my new friends Audrey and Jeff to the first class lounge where we showered, had a spa treatment, and a nice personally prepared sit down meal. They are both heading to Everest as well (climbers and trekkers are beginning to find each other). Audrey is a trekker on my trip. Jeff is a climber who attempted to summit Everest with my friend John Carney and is back for his second attempt. It's great to be in this community, and the players can be identified from afar.  The lounge looked, smelled and acted like a Four Seasons. Travel at this level and these experiences are what makes me love what we do.  

 

 

 

 

The Etihad Representative escorted us to the next flight. Watching the Arab cultures walk through the airport and the Vegas like world outside in Abu Dhabi was fascinating. The Flight to Kathmandu was less than four hours. Another meet and greet had me an my new buddies get off the plane first and into a private van to baggage claim where my bags where pre pulled. Visa and passport control was clunky, but having gone through it first made it easy.

 

Upon entertaining Nepal, a real world experience began to change from a first class one to a third world country experience. You could tell the air was thick with pollution and the chaos of taxi drivers and private pickup vehicles with tons of signs and hordes of people yelling out their company or offer. I saw the Alpine Ascents (the company who is leading the expedition up Mt. Everest) sign and followed the crew to their van. We waited for one more traveler to arrive - Erin Carney, John's niece and my hiking buddy. She welcome the friendly face and off we left in the van through the chaotic streets highlighted by dimly lit shops to the Yak and Yeti hotel.

 

 

The hotel is a blend of what seems to be ancient Nepalese extravagance and sixties or seventies modern. A clean and calm retreat from the streets of Kathmandu. Our guides checked us in, we dropped our gear, and headed down for an Everest beer (yeah that's the name of the local beer) and some conversation. John and Nick (Johns college roommate and my soon to be trek mate) found us and the day ended with friends, travel tails, and grand expectations. After a great night sleep I write you today from a sunny lounge and bad cup of coffee. A great start to what is sure to be an amazing journey.