The best way to answer this question is to ask yourself: “Do you regard business-related travel as a cost or profit centre?”
Most corporates see travel as a cost that they’d like to reduce or avoid altogether. This is where procurement comes to the fore, leveraging existing and future spend to create preferred suppliers offering lower rates and other benefits. But travel is not like other commodities. The price doesn’t always come down as demand increases.
Rather than a cost, some visionary CEOs see travel and meetings expenditure as a source of profit; the means to facilitate business. Even in the digital era, face-to-face contact is essential to do business. Alternatives such as Skype and video conferencing can replace some meetings, but rarely can a sale be initiated without pressing the flesh.
Global travel is increasing, both for business and leisure. The global talent pool is getting smaller so the global workforce is having to be more mobile. The number of companies sending employees on international assignment is growing year-on-year; another example of travel facilitating mobility and an illustration of why HR is also a major stakeholder in corporate travel management.
Managed vs un-managed
Most business travel is managed; in other words, travel is strictly controlled with processes in place to cover trip and expense authorisation, use of preferred suppliers and post-trip evaluation protocols to ensure that the overall cost of the trip is minimised. The traveller has relatively little choice over where he or she stays, and the rate paid is pre-determined by the terms already negotiated via procurement.
However up to 30 per cent of business travel in the UK is unmanaged, with no restrictions placed on purchases in terms of seniority, entitlement or spend limit. The problem with unmanaged travel is that the associated spend is not leveraged. The time spent trawling the internet for the day’s hot deal represents lost productivity elsewhere, as well as offering a false economy.
Other organisations believe their employees want to be good corporate citizens and therefore empower them to make travel choices. This approach has been dubbed Travel 2.0, but like the more traditional approach, this also relies on systems and booking channels to be in place to leverage best value from the company’s travel budget.
Effective travel management calls upon many different corporate disciplines, not all of which may have the resource or bandwidth to be part of a robust travel programme. That’s where TMCs come in.
Chambers and other TMCs help larger organisations to shape travel policies that maximise compliance and leverage maximum savings using the aggregated buying power of our respective clients to secure the lowest possible hotel rates, air and rail fares.
For smaller companies, we help to save money and time by giving them the means to book travel through a single point rather than losing productivity whilst individual employees waste time making their own arrangements.
And by establishing trip approval and cost control protocols within travel policies we work with our clients to change buying behaviour, eliminate unnecessary travel and streamline expense processes.
We also provide the technology that captures every booking and enables travellers’ whereabouts to be tracked whilst away on business – especially important when disaster strikes and you need to meet your Duty of Care obligations.
The future of travel management
Twenty five years ago, you’d find an in-house travel manager in most large organisations. The emergence of the TMC changed that. And over the next 25 years the shape of travel management at corporate level will continue to change. Mobile apps and social networking are already changing the way travel is booked and consumed. And a new generation of traveller – Generation Y – has an affinity with Skype and Facetime instead of hopping on a plane.
As travel programmes mature, travel products become more dynamic and booking channels more diverse, the scope for finding incremental savings will diminish, and along with it will be the role of procurement. Corporate communications teams will assume responsibility for putting people together using the most appropriate medium to achieve the required results. Advances in technology and Gen Y’s expectation for booking travel on the move will also make the IT department a key player in travel management
But despite these inevitable changes, one thing looks unlikely to alter: the diversity of corporate cultures. This means that there can never be a ‘one size fits all’ approach. Here lies the future value of the TMC. As specialists in business travel, we will have the expertise, systems and content to meet these changing needs.
This blogpost was written by Daniel Von Weihe, executive vice president business development, Chambers Travel Group www.chamberstravel.com. Chambers Travel Group is exhibiting at the Business Travel Show, which takes place 25-26 February 2015 at Olympia Grand in London. Register for free now at www.businesstravelshow.com