Representing the second largest controllable expenditure for many corporations after salaries, it is no wonder that CEOs across the globe – spurred by the recessionary environment – are targeting travel as a way to lose any ‘excess weight’ putting a potential strain on the health of their business. From reducing travel to tightening travel policy, renegotiating with suppliers to adjusting travel behaviour, there are a myriad of avenues available to the cost conscious. But where does one start? BCD Travel serves up some hearty boardroom advice to help make travel programmes leaner in the short-term and fighting fit for the long-term.

Turn your ‘data’ into ‘information’
In order to drive savings, one first needs a clear understanding of current spending practices. BCD Travel clients know that you can’t control what you can’t measure. That is why they use DecisionSource, BCD Travel’s information management platform. DecisionSource provides real-time intelligence to help mitigate costs before travel takes place – providing at-a-glance information to measure programme effectiveness, spot trends, improve cash management and drive savings and compliance. The ability to share such information with cross-functional teams and key senior management within organisations is helping many to drive optimal efficiencies and savings both nationally and globally.

Savings potential: significant, depending on the size and scope of your programme.

Review how you pay for travel
A wide variety of payment systems are available to corporations today, and your choice of payment method may significantly impact your cash flow. With suppliers adding merchant card fees to prices it’s vital that the payment system chosen is both economical, efficient and meets your internal and external needs in order to drive savings. BCD Travel works in conjunction with its clients to guide them to the most cost effective methods which maximise credit terms whilst minimising paperwork and the impact on finance departments.

Savings potential: eight percent improvement in cash flow.

Read between the lines
Look beyond the ‘big-ticket’ items and focus on metrics that represent true savings rather than those that appear to matter at first glance. For example, it may be tempting to focus exclusively on air ticket costs, but for some corporate travel programmes, air may make up only as much as 20 percent of total travel expenditure. BCD Travel client account managers, often with the support of a consultative engagement from Advito (the independent consulting branch of BCD Travel, www.advito.com), help corporations drive savings throughout the total cost of their trips, including hotel, ground transportation and even restaurant costs.
Savings potential: 25 percent on total trip costs.

Update and enforce your travel policy
Growing corporate cost-consciousness is manifesting itself most prominently in the refinement and enactment of more stringent travel policies. The most common cost-cutting elements among BCD Travel clients are:

• Basing travel policy on ‘price’ levels rather than just ‘class’ of travel. BCD Travel has access to exceptional deals in business class which may be cheaper than their economy equivalent, meaning the traveller receives higher value and quality while the company pays less;

• Shifting from business class to economy class where appropriate (variations include mandating economy class for all travellers regardless of hierarchical level, increasing the business-class flight-time threshold and making better use of more restrictive economy tickets i.e. fixed outward journey, flexible return);

• down-tiering hotels (i.e., three-star instead of four-star); mandating the use of public transport rather than taxis; and retaining frequent flyer miles for business travel rather than personal travel.

Savings potential: 64 percent reduction in travel costs.

Change your travel approval process
Whether it’s instituting an official approval process where one might not have existed or – as is more common – making existing processes more restrictive, this cost-cutting method is winning wide-spread support among BCD Travel clients as an easy ‘quick win.’

As part of a concerted travel-cost reduction effort, one of BCD Travel’s global clients, which has over $450m in annual travel spend and more than 325,000 employees worldwide, changed its travel approval process to incorporate the following measures:

• No travel unless approved by a vice president on a single trip basis (fewer than 150 VPs in the company);

• No last-minute travel (under seven days’ advance purchase) unless approved by an executive vice president (fewer than 15 EVPs in the company).

BCD Travel’s TripSource: Authorizer is the perfect solution for driving such measures to produce cost savings. It automatically routes targeted transactions (such as a non-authorised class of travel, non-billable travel or non-use of preferred suppliers) to the traveller’s line manager or approver, who can then authorise or decline the trip via a mobile device. In addition to knowing that each trip is a valid business requirement, TripSource: Authorizer gives senior management greater control and peace of mind in knowing that all expenditures are policy-compliant and reasonable.

Savings potential: Significant, depending on the size and scope of your programme.

Increase your use of online booking tools
In order to save on transaction costs and streamline processes, corporations can mandate all domestic or point-to-point travel be booked online. Online tools can also play an important role in supporting changes to travel policy and to traveller behaviour. Companies can modify their booking tools to ask travellers about the necessity of a trip or offer alternatives to the journey before proceeding to booking. By working with every major online booking tool on the market alongside its own bespoke system, BCD Travel is ideally placed to advise on the most appropriate tool for your company.

Savings potential: 50 percent reduction in agency fees through the use of online booking tools, plus a further eight percent saving on travel costs through greater compliance driven by the travellers ability to compare all prices on screen.

Consolidate your travel programme
Corporations should also consider consolidating travel services regionally or globally. Consolidation of multiple country services into a travel management companies’ multinational service centre, for example, can represent considerable savings in resource and process costs. Mindful of such rewards, following a successful programme consolidation in the US and Canada, a service industry giant turned to BCD Travel to consolidate its travel within the EMEA region. They now benefit from greater spend visibility; tighter travel policy and cost control; improved vendor programme management; and concrete savings. One year after the consolidation, the company has seen a decrease of 14 percent in average ticket price and a 27 percent reduction in total agency costs.

Savings potential: significant, depending on the size and scope of your programme.

Last but not least… be strategic in your approach
As hard as it may be to foresee, the recession will not last forever. Companies will need to emerge from the downturn with plans for growth and solid business relationships in place – and travel is a crucial element in supporting such growth and retention initiatives. CEOs, therefore, need a targeted and measured response to any actions they take. As with any diet, success is incumbent on making change a way of life, not a 30-day wonder regime.

For further information on how you can achieve greater savings, value and return on your travel investment visit
www.bcdtravel.co.uk or contact:
Tony McGetrick
Director of Sales UK & Ireland
BCD Travel
Marble Arch House
66-68 Seymour Street,
London
W1H 5AF
T: +44 (0)20 7309 3725
F: +44 (0)20 7309 3706
tony.mcgetrick@bcdtravel.co.uk
www.bcdtravel.co.uk