The economy continues to improve and because of this, businesses are willing to plan large group meetings or special events to connect with their customers and facilitate collaboration and innovation. The requests for meeting space and group travel is increasing. In 2014, spending on group business travel ($126.5 billion) exceeded spending on individual business travel for the first time since 2008. The BTN Outlook predicts that group trip volume will grow 3.3 percent in 2016, and spending on group business travel is expected to grow 2.7 percent.
With a continued focus on cost savings and improving margins, how are businesses, and in particular Finance Executives expected to manage this significant organizational spend? For the average organization, group and meeting travel accounts for 35% of all travel and expense (T&E) expenditures. Through expert analysis and our wealth of industry knowledge, we’ve developed the following three key strategies to reduce group business travel expenses for meetings and events.
Key strategy #1: Develop and deploy the right RFP
A Request for Proposal (RFP) is one of the standard documents used in the procurement process to gather relevant information on meeting venues or hotels when planning a group event or meeting. Thorough data analysis and clear communication plays an important role in developing the RFP and therefore, receiving the best quote. RFP’s must be clearly stated, include relevant data and information about your business, and articulate expectations for meeting and/or group needs based on the event.
In addition, the deployment of the RFP must be strategic; clearly define who you are asking for proposals and why. Consider distribution requirements and timing of the ask; is there enough lead time for hotels to consider your proposal, for example? The location of your potential vendors, size of the company and the monetary value of your contract also need to be included. Being very specific in how and to whom you distribute an RFP will save time and keep the project within budget.
While being specific with the needs of your project in the RFP is important, be willing to allow some flexibility. The 2016 Advito Industry Forecast states that, “Hotels are rejecting more requests for proposal (RFPs), because they simply don’t have space, or because they’re being more selective about the bookings they do accept. They’re turning down RFPs if the price is not right or buyers present master service agreements that are too strict.”
Developing an RFP that clearly states objectives, includes relevant data, expectations and is strategically distributed will save time and presents the most cost effective options for your business.
Key Strategy #2: Align business-meeting objectives with partner organizations
The power of established relationships in planning and executing group business travel is critical. As you work to reduce expenses within your travel and expense budget, specifically regarding meeting and event planning, utilize the relationships that you’ve already secured for the best pricing results.
- Negotiate discounts for travel – contact your preferred vendors first to speak with them about discounts and best rates for group travel. Provide detailed information on timing, number of participants, and special travel needs. Work closely to develop the most cost effective option for travel, keeping expenses at a minimum.
An increase in demand for hotels will increase prices by 4% to 6% this year. This increase in price combined with high occupancies will require more work to find the right property at the right price. Speak with your preferred vendors or consider the use of an expert who works with hotels in meeting management to effectively negotiate the best options for the best price.
- Clearly communicate with vendors – the relationship you have with vendors will be critical in the development and follow-through of your travel and event contracts. Reach out to partner suppliers to leverage your group business travel spend and work towards the most cost effective options.
- Consider booking multiple or recurring events within one contract to incur price discounts and to save time in planning.
- Develop clear language that addresses attrition, room block rates, meeting room fees, food and beverage costs, cancellation fees, payment options, etc. These expenses seem “minimal,” but add up quickly at an event with hundreds of people in attendance.
- Reserving and managing block reservations for airline seats and hotel rooms will reduce costs and provide ease of booking for group travelers. For hotel reservations, determine how many hotel rooms are needed, the type of rooms that best suit the group and the amount of time the block is held. Blocking seats on an airline allows for easy planning and reservation management, while also guaranteeing paid seats for airline companies. Consider offering incentives for attendees to stay within your blocks such as reduced registration fees or entertainment discounts.
Leveraging the already-established relationship within your group business travel circle ensures predictability in planning and considerable reduction in expenses.
Key Strategy #3: Streamline with group business travel automation
The technology available to streamline group business travel, meeting and event planning and the overall managed travel process has a tremendous impact on expense management. SME’s can benefit from technology through realized cost savings, increased control and compliance and increased productivity from staff.
Requiring both staff and non-staff to become authorized before the trip is essential in reducing expenses for group business travel. The time it takes to enter and approve every traveler, gather the necessary paperwork and details on their participation can be saved increasing overall control of the process and increased productivity from travelers. Pre-authorizing attendee information, travel details, travel preferences and payment information ensures the correct data is available and prevents headaches from manual credit card entry, on-site attendee data entry or verification of payment receipts.
Event logistics automation provides meeting management tools and shared document sources that drive value for your meeting participants. Travel management companies (TMC’s) can customize online registration and booking with features that will send customized invitations, negotiate and manage room blocks, as well as upload and manage attendee lists and run reports.
In addition, using automation within your T&E system to effortlessly track cost, invoices and event registrations will increase cash flow, reduce expenses, save time and give predictability for budgeting in future meeting and event planning.
Group business travel and meeting and event planning continues to provide strategic value to businesses. It’s important for Finance Directors to work closely with travel managers and project leaders to develop the most cost effective options for keeping group travel expenses to a minimum. Consider the above key strategies to reduce expenses related to group business travel, increase control and compliance of travel procedure that result in a successful, beneficial event.
Do you plan to increase group travel and events in 2016? Share in the comments below some of your challenges and plans reduce the costs around group travel, meetings and events.