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.