Whether it's a meeting, client presentation or conference, for some companies, growing the business means investing in travel. So how do small businesses work to keep those outgoing costs down while still prioritizing important travel? The following list aims to help small business owners save money on travel where possible.
1. Understand your travel needs. Keep track of your travel patterns. Are you constantly sending employees to the same locations? Are they flying the same air carrier and staying in the same hotels? If so, you may have leverage to negotiate discounts with preferred suppliers based on your travel volume.
2. Consider these five improvements to achieve cost savings of up to 20 per cent. Purchasing travel tickets in advance of the trip can represent an average savings of six per cent. Purchasing restricted or non-refundable airfares could represent an average savings of 4.8 per cent. Using or mandating the use of preferred suppliers could represent an average savings of 5.4 per cent. Being flexible on traveller comfort (i.e. type of room category reserved) could represent an average savings of 4.3 per cent. And, using preferred booking channels and suppliers could represent 1.9 per cent.
3. Establish a travel policy. Formalize a process that your employees can follow when travelling. Your organization should have an annual assessment to include all elements of your travel program – air, car, hotel, parking, expense management, online booking, mobility, credit card, safety and security. It is also important to have an effective incident process in place in the event of a crisis in order to track travellers quickly, establish contact and provide assistance, such as re-booking, emergency re-routing, etc.
4. Enforce travel policy compliance. Communicate your company’s travel policy and educate employees on what is permissible and what falls into the company’s guidelines for acceptable travel spend. You can use various communication tools and channels (portal, e-newsletters, e-mail, expense management, on-boarding new employees, etc.) to communicate the importance of managing travel costs in a growing company. Be sure to clearly explain why following the travel policy will allow your company to be more cost-effective.
5. Leverage buying power. Working with a travel management company offers buying power based on volume to better negotiate preferred supplier rates which results in savings for your company. A travel management company that has a program focused on the unique needs of small and medium size companies can provide various discounts that can be applied immediately while long-term cost savings programs are being established and spending is being measured.
6. Go to the negotiating table. Believe it or not, you have power to set costs for travel-related expenses. Understanding your company’s travel patterns unto itself is beneficial, but knowing what can be done with the data to secure negotiated rate opportunities will offer better pricing on air, car, hotel and more. Working with a travel management company or consultant will help smaller to mid-size organizations that lack time, resources and experience sift through various rates and maximize savings.
7. Consider a travel management company (TMC). TMCs are intimately involved with the entire travel experience, are tracking trends as they occur and have the ability to understand tailored approaches for small companies to save on travel spend. Some key things to look for when considering a TMC are: find a TMC that provides 24/7 desk top data and information accessibility, provides custom analysis, ability to offer service levels to match your needs, dedicated business resiliency resources, proprietary research and development, safety and security, etc.
8. Establishing performance metrics. Develop an action-oriented performance measurement plan. This means managing the buying behaviour of your employees and ensuring they are following your negotiated travel programs. Measuring elements such as Average Ticket Price and comparing these to benchmarks in other like companies will allow you to set additional goals for cost savings and identify plans to reach those goals. For example, advance purchase of airline tickets still statistically results in lower overall ticket prices long term.
9. Consider a corporate online booking tool (OBT). Organizations should consider adopting a corporate (customized to your policy) online booking tool that manages costs, Traveller needs and employees will be more likely to comply with your recommended travel program. An OBT will allow you to easily track travel and reduce travel and expense costs such as reduction of the average ticket price. An OBT can also be used to support and increase travel policy compliance.
10. Formalize meetings and events programs. To minimize costs and maximize efficiency, organizations should include meetings and event management process through a travel management company which will result in additional savings. You can leverage combined volume of preferred supplier programs, technology solutions, companywide compliance policy, etc.
Sherry Saunders, senior vice president and general manager for Carlson Wagonlit Travel (CWT) Canada, has been helping companies manage travel and save money for more than 25 years.