Travel Anarchy™ is alive and well in businesses, and with corporate travel increasing, it’s critical for SME’s to destroy travel anarchy in their organization before it gets out of control.
Travel anarchy is the organizational phenomenon where travelers are in charge of their travel choices according to their desires and experience, as opposed to travel being managed through a series of clear instructions on preferred suppliers, cost savings thresholds, and agreed-upon policies and procedures.
When travel anarchy exists in an organization, the true value of travel management cannot be realized, resulting in an increase in travel and entertainment expenses (already considered the 2nd highest controllable cost within an organization); increased risk for travel complication and liability; and a lack of control in a truly managed travel environment.
How can you combat travel anarchy, while at the same time, provide true travel value for your road warriors and your business? One of the proven ways to increase the success of your travel program is to enlist the help of a highly qualified, expert travel management company (TMC).
TMC’s Eliminate Travel Anarchy
When you work with an exceptional travel management company, positive results can be realized almost immediately. Instead of the chaos that exists when employees are completely in control of their travel, a TMC that provides exceptional travel leadership can:
- Increase travel savings
- Provide support for travel and procurement managers, as well as travelling employees
- Increase productivity for employees by reducing the time it takes for them to book travel
- Increase control of your corporate travel program, virtually eliminating travel anarchy
One of the biggest barriers that you may face when communicating the true value of a TMC is the perception of TMC fees. Many organizations don’t understand the return on investment delivered by TMCs, so they focus on the fees as if they were the only travel costs they can control. The reality is that TMC fees are the smallest part of a travel budget; only 3% of your travel spend is fees, while 97% of travel spend is on air, hotel, car, etc. This large chunk of your travel budget is where a TMC can make the biggest difference. In 2014-15, we analyzed the work we did for our clients and found that:
- For domestic tickets, the national average ticket price was $572. Our clients paid an average of just $447 per ticket – a savings of $125 per ticket.
- For international tickets, the national average ticket price was $2,213. MacNair clients paid an average of $1,783 for a $430 per ticket savings.
It’s critical to ensure both your business and your traveling employees are getting the best travel value. Following are ways that this value can be realized as you implement travel leadership into your organization with the help of a TMC.
1. Gather insight and best practices on procurement from your TMC
A recent survey from the Global Business Travel Association (GBTA) showed that 90% of respondents stated that “negotiated discounts” lead to the biggest travel savings for their organization when working with a TMC.
When employees have the choice to pick their favorite airline or hotel there is no guarantee of the best price. When a TMC works to share expert insight and advice on procurement strategy, all vendors can be appropriately vetted to ensure your business is receiving the best value.
The best procurement value will result in a huge cost savings for your business and in turn, allow for support of travelling employees.
2. Develop and respond to the Request for Proposal (RFP)
Once you’ve determined your overall procurement strategy, the next step is usually the development and deployment of a request for proposal from your travel vendors. An expert TMC will help you clearly communicate your needs and subsequent request to move you efficiently through the process.
This process will give all potential vendors a very clear and concise description of the needs of your business, and in turn allow them to provide you with the best travel options. This not only works to start a successful partnership with your vendor(s), but also ensures overall travel savings.
3. Clearly communicate procurement strategy to leadership and travelers
The nature of travel anarchy – employees booking travel on their own – will produce questions and concerns from employees when the new/updated list of preferred vendors is developed. It’s critical to clearly communicate the “how” and “why” of vendor procurement, and what kind of value they can give back to travelling employees. Perhaps the new airline partnership allows for class upgrades when travelling internationally, or the hotel includes a complimentary meal when a room is booked. Your TMC can help to clearly communicate these and other possible value-added benefits to your travelers, reinforcing your organization’s support of their travel.
4. Include all preferred vendors in your company travel policy
As travel vendors are secured, don’t forget to include them in your travel policy. Your expert TMC can provide tremendous value to ensure your travel policy meets the needs of your travelers and travel objectives, and includes all of the necessary details to ensure compliance and travel management, which benefits all involved. An effective travel policy ensures maximum efficiency and value through savings, support, productivity and control.
5. Track value results and communicate ROI
After the successful procurement of your travel vendors is complete, work closely with your TMC to track the results from working with these vendors to successfully communicate the return on investment to both travelers and your leadership team. When working with a TMC, expect to see a 10%-20% reduction in your travel and entertainment budget line item.
Travel anarchy can be eliminated in your business with the help of an exceptional travel management company. Through effective procurement techniques, a succinct travel policy and clear communication of value and ROI, your TMC will reduce expenses, increase support and productivity for your business and ensure control and compliance in your corporate travel program.
What does your company do to slay Travel Anarchy? We’d love to hear your thoughts and best practices and hope that you’ll share your comments below. If you’re interested in learning more about developing a supremely successful travel leadership program, please download The Secrets to Travel Procurement or give us a call.