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Travel management is a specialised business function that balances employee needs with corporate goals, financial and otherwise. Travel management ensures cost tracking and control, facilitates adherence to corporate travel policies, realizes savings through negotiated discounts, and serves as a valuable information center for employees and managers in times when travel is not as smooth and carefree as it used to be.
The economic downturn in recent years has allowed travel managers to take a front and center role within their companies and has made travel management, as a profession, an important part of every top executive’s strategic planning. In many cases, travel managers have been asked to lead company-wide efforts to cut travel costs, track those savings and report them back to senior management.
But travel management is still misunderstood and undervalued by some corporations today. Therefore, the role of business travel within the corporate structure must be placed in proper context so that its value can be measured and appreciated.
Travel management plays a significant financial role and can contribute to a corporation’s shareholder value. Since the cost of travel is a corporation's second or third largest controllable expense, having experienced travel management professionals manage and negotiate travel-related services provides measurable financial benefits to the corporation. In addition, monitoring and analyzing travel expenditures is essential for realizing cost-cutting opportunities.
Traditionally, the corporate travel department works with each department to determine its travel needs and develop its travel budget, based on current spending and planned development. Then, with the consolidated travel needs of the corporation, travel managers negotiate discounts and preferred rates with travel suppliers based on their company-wide travel needs. Corporate travel management professionals are the essential elements to managing the negotiation and review of vendor relationships. By negotiating discounts up front with selected travel providers based on volume and price, companies can maximize the value of their travel spending by fulfilling more of their travel needs through these preferred vendors and negotiated agreements.
In the dynamics that now define the environment of corporate travel management, many corporations have developed preferred relationships with travel suppliers and have moved to negotiate direct discounts with airlines based on volume. BJT implements negotiated agreements with one or more air carriers as a means to address rising airfares. Relationships are key to successful travel management.
The impact of cost avoidance and what can be accomplished under an effective travel manager can be illustrated by BJT in a today’s presentation to your organisation. BJT can provide the most recent example whereby it saved a major client nationally $1.6 million in travel based on previous years travel spend of $3.6 million due to control of travel means. (This included the take up of eliminating certain travel related credit cards). Client reference available upon request.
This can be viewed as return on investment of 44%, contributing substantially to shareholder value. It puts travel management in a very different perspective. This may not be repeated every year but was achieved at a time it was most required.
Gathering travel data and setting up travel agreements with providers is important but it is merely the first step to realizing actual financial benefits. BJT is responsible for developing corporate policies that optimize the company’s travel dollar. In order for a client to get the most out of their negotiated discounts, policies must be created that compel employees to make their travel arrangements through a corporation’s travel department, using these negotiated rates with preferred suppliers.
Policy adherence is essential. Otherwise, the corporation may be wasting money through more expensive bookings with non-preferred travel suppliers. A managed travel program guides employees to travel the way management recommends. By taking advantage of supplier discounts, a managed travel program pays for itself through cost avoidance and negotiated revenue streams (rebates, incentive payments, etc.). For instance, a company may negotiate a contract with its preferred air carrier that offers discounted fares on key city pairs.
While the monetary benefits of a managed travel program to a company’s bottom line are clear, there are also valuable strategic, non-monetary benefits that may be less visible. Corporate travel professionals are responsible for providing a valuable service to their customers, the company’s travelers. This involves ensuring travel is both safe and productive. Travelers need a smooth, efficient travel process in order to reach a company’s business objectives. And during times of national, corporate, or personal crisis, travel management professionals are crucial to reducing the risk to a company and its travelers through employee tracking and emergency assistance.
The corporate travel professional’s important role is never more visible than during time of crisis. On September 11, 2001, professionals at all levels realized the enormous non-monetary benefits of their corporate travel departments and the value of the human factor. Lessons learned from that day show that effective communications and tracking systems managed by the travel office are essential for locating travelers, speeding their return, comforting their families and keeping the normal flow of business in times of crisis.
The new security concerns and constant changes in the travel industry have expanded the role of the corporate travel department as a provider of critical information. BJT is constantly reviewing new travel communication procedures and crisis management programs. The role of the Travel Manager has evolved into an information center that provides valuable insights on how to travel safely and efficiently. A travel manager must be seen as a critical segment of any crisis management plan.
Successful travel management also has a substantial positive effect on employee satisfaction and increased productivity. *A recent survey of 300 Internet business users revealed that a staggering 89.9% of employees utilize the internet for personal use, mainly to make travel arrangements. Bypassing the travel manager thus decreases employee productivity. In addition, providing good service to a company’s travelers makes it more likely that those employees will book their travel through the travel department, increasing compliance with travel policies and ultimately allowing the corporation to realize greater financial savings.
Today’s environment presents real opportunities for internal travel managers to demonstrate their value to their companies and the industry as a whole, both financially and through traveler efficiency and safety. With COO's, CEOs and CFOs now focused more on corporate travel and its effects on a company’s bottom line and risk management, anyone who can deliver accurate data that can strategically help the company chart through tough times will continue to be a valued and key player in any organisation As technology progresses and as there are more and more developments in the business travel industry, corporations will need to rely even more on the expertise, experience and insights of the often undervalued corporate travel manager.
* Survey Conducted By The Global Business Travel Association