By Elise Coker, Senior Director of Global Marketing
In a recent, Advito-sponsored ProcureCon webinar on how travel and procurement professionals can reduce travel spend, two travel experts shared abundant ideas to achieve breakthrough savings. Advito Managing Director April Bridgeman and LinkedIn Global Travel & Event Operations Manager Leslie Hadden discussed effective demand and traveler behavior strategies in a powerful 60-minute session. Here are some key takeaways:
- Hotel content. Beyond negotiated rates and the GDS, make sure your travelers have access to the best hotel content, properties and rates from multiple suppliers. This proven strategy results in additional savings of 2 to 4% on your agency hotel spend.
- Price assurance. Basic products that continue shopping for lower hotel rates or airfares after a trip has been booked can generate an additional 1 to 2% incremental savings on air and hotel spend that goes through an agency. Surprisingly, a lot of companies are not using these products.
Demand management strategies
Employ demand management strategies to change why and how often employees travel:
- Target reduction in specific types of travel. Examine closely why people travel and drive down non-revenue generating travel. Easy way to get started: capture reason codes for travel. Because most companies spend about 50% for internal travel, even a 10% reduction generates big savings.
- Promote travel alternatives. Many companies have invested heavily in collaboration technology; begin guiding people to use video conferencing to reduce travel.
- Tie to organizational goals. Travel reduction helps achieve many broader organizational goals related to sustainability, talent management and retention, productivity and financial initiatives. Gain leadership support by demonstrating the connection.
- Educate travelers. To enlist traveler’s support, help them understand the purpose of their meetings and set the stage for an effective gathering by selecting the right collaboration tools for the job.
- Reexamine your travel policy. While policies are not the most effective tools to impact travel, it is rare for a company to provide guidelines about WHEN people should travel along with details to help them make informed decisions.
- Pre-trip approval. Consider using approvals to target high cost outliers, for example, if someone selects a certain category of travel, travels for internal purposes a certain percentage of trips or if the cost passes a preset threshold.
Behavior management strategies
Behavior management strategies impact what employees spend when they do travel:
- Dynamic policy. With continually changing rates, setting travel caps once a year is no longer realistic or effective. Innovative technology is currently available that integrates with online booking tools. It shops and captures prices that meet certain criteria and guides travelers accordingly. These resources enable companies to use real-time shopping data to create a budget to beat.
- Traveler incentives. Reward travelers for making decisions that are cheaper than what policy requires. These programs can provide an incremental 8 to 12% net cost reduction after sharing the savings with the employees and the cost of the incentive management platform.
- Digital marketing. Consumers are exposed to sophisticated digital marketing techniques daily, yet this is one area where corporate travel lags seriously behind. Most TMCs have messaging capabilities available through their booking tools. Create targeted, contextual marketing campaigns to change specific travel behaviors – the more personalized, the better.