What You Should Know About Outsourcing Corporate Travel Management
By Valerie Sullivan, Outsourced Travel Manager
The business travel industry is constantly changing, and that can make it hard for procurement professionals and travel managers to keep up and ensure their program is performing at the highest level. Sometimes they just don’t have the resources or the bandwidth to devote to travel. The result is usually a program that is functional, but not at all optimized for peak performance. Outsourcing travel management is a solution that can help reduce costs, while also improving program performance and traveler experience.
What does an OTM do?
Outsourced travel managers work within your program to improve processes, deploy new products and services, manage compliance, develop vendor relationships, as well as increase traveler satisfaction. OTMs can also develop and execute a travel strategy, manage the entire program, lead Traveler Engagement campaigns and serve as the internal point of contact for travelers.
The bottom line is that the role of an OTM varies according to the company’s needs. There’s no one size fits all approach. Instead, it’s about making sure the travel program that meets the company’s unique needs and delivers on organizational goals.
When is outsourcing the way to go?
While it is not magic bullet for every organization, there are several situations where outsourcing the management of your business travel program could make sense.
For example, when you need to benefit from industry expertise, but don’t have in-house talent with a travel background – or the bandwidth the manage a program – outsourcing could be the solution. A travel manager who is not a subject matter expert may not have the breadth of experience they need to keep pace in this fast-evolving market.
Outsourcing your travel program is also a time-saver. Many travel managers are not dedicated to travel and have other responsibilities. It can be difficult to design and run a program, engage travelers, manage to travel policy, deliver savings and more. Outsourcing can ensure that there is someone who can dedicate the right amount of time to these tasks, and employees in other functional areas don’t have to take time out of their workflows to manage the program.
It is worth noting that outsourcing might not always be the right choice. For example, a small company where employees only take a few trips a year can probably handle bookings in-house, as it’s not a major time-sink and cost implications are low. However, when a travel program isn’t working as well as it should, outsourcing travel management can be the answer. Travel experts can work faster and more efficiently to run the program, deliver on savings and engage travelers.
In companies without travel managers, employees often book their own travel. This can give rise to a big duty of care issue. Not knowing what flight travelers booked or the hotel they are staying in is a safety risk. On top of that, you’re almost certainly overpaying for both travel and accommodation and don’t get real insight into what’s happening with travelers. Did they have a productive trip? Was the hotel they booked close to the office? Did it include wifi or breakfast? If you don’t have access to these types of insights, you’re missing out on key information that can be used to optimize program performance.
This is even more important in a large organization with multiple travelers. At that point, in-house travel management can become a large, unwieldy task, and you can’t afford to leave travel issues to chance. Outsourcing can reduce risk and deliver security, savings, and peace of mind, without the headache of running it in-house.
What your travel program gains with an OTM
There are many ways that both your travel program – and the organization overall – will benefit when an OTM comes on board. Many OTMs have deep industry knowledge after working as travel agents, account managers, in-house travel managers, and more. Being able to draw on decades of industry expertise without having to develop it over a long period of time is a big benefit of outsourcing.
Hiring an OTM reduces overheads for your travel program. You often get the roles of two or three people wrapped into the cost of one FTE employee. This is key in an organization that’s not primarily focused on travel.
Your OTM can also draw on industry data and contacts to help you improve travel policies, processes, performance and supplier negotiations so that your travel program meets your company’s goals. OTMs can review your program data on a regular basis to make adjustments as things change. That way you know whether suppliers and partners are delivering on agreed upon rates and deals, and can follow up quickly if they aren’t, resulting in cost savings.
Finally, an OTM can develop and lead Traveler Engagement campaigns, allowing the organization to keep travel policy top-of-mind, inform employees with important travel updates and even influence their booking behavior. Traveler Engagement leads to improved traveler satisfaction and reduced employee friction, and happy employees are more likely to stick around – reducing the cost of employee turnover.
In a fast-changing industry, having an expert in the driver’s seat navigating the travel program’s role in overall organizational strategy and goals will deliver significant savings and performance improvements for your travel program.