Despite the snooze-worthy technical jargon associated with corporate travel management, it is an essential part of any business that involves travel. Investing in management solutions that efficiently organize and manage your employees’ travel saves your company time, money, and contributes significantly to both client and employee satisfaction. With constant new advances in corporate travel management, it’s more important than ever to be fully aware of the various travel management options available to your business.
Travel Management Companies:
If you want to go old school, TMCs are for you.
Travel Management Companies (TMCs) are the tried and true method for corporate travel management. Depending on the size of your company, travel managers might be located in-house or work for you via an outside TMC, such as American Express GBT or TravGroup. Services provided include negotiating airfare and lodging at special discounted rates; providing spending data to streamline budget control; tracking employee compliance with travel policy, and managing itineraries with end-to-end booking so that your employees are safe and where they’re supposed to be at all times.
Top Advantages of TMCs:
1. Cost-Effective Planning and Data Analysis
A TMC will work with your company to determine the best expenditure plan based on your travel needs and available budget. They can provide and assess centralized data about your employees’ current booking and spending habits. This centralized data is key in revealing opportunities for lowering expenses. A TMC can then recommend steps that will streamline your company’s travel policy and ensure that cost-cutting opportunities aren’t left behind.
2. Negotiating on Your Behalf
A TMC will negotiate with travel providers based on volume and price points, establishing relationships with preferred vendors that will translate into valuable savings and a better travel experience. Your travelers may think they’re getting the best deals on airfare, car rentals, or accommodations, but without the comparable data, they won’t know for sure–and neither will you. Through direct negotiations with the vendor, a TMC can often secure special rates or upgrades unavailable to the general public. These negotiations based on centralized data and projected volume are especially important with program expansion: having the hard data that demonstrates growth in travel will go a long way toward securing those cost-saving contracts with the vendor.
3. Providing Support
Let’s not kid ourselves here: business travel (really, any travel) does not come without its fair share of service interruptions, whether it’s unexpected weather delays, overbooked hotels, or last-minute itinerary changes. Your employees can suffer severe productivity loss if they’re scrambling to fix travel issues instead of focusing on their work. Reducing travel anxiety by relying on a TMC to handle any and all travel interruptions can have a profound impact on the business travel experience. After all, the less stressed the traveler, the more relaxed and confident they’ll feel going into that important client meeting–and that confidence often translates into success.
Disadvantages of TMCs:
1. This Ain’t No Free Ride
As should be expected, there are fees accompanying that awesome TMC that consolidated your company travel. Transaction fees for bookings are standard (sometimes at $20 or more per reservation), but so are other fees when interacting with the agency. If a traveler needs to call the TMC multiple times to secure a booking, there might be multiple interaction charges even though it’s only one transaction. This can be true even if the traveler has booked everything online but needs to make a change that requires agency help due to system limitations. Even though your employee did everything right, the fee system might result in additional charges. Make sure you’re aware of all potential costs when negotiating contracts with a TMC.
2. You Might Not Get the Whole Picture
Going back to those system limitations…many employees might be resistant to using the travel platform provided by the TMC. The ease of familiar, user-friendly interfaces makes it awfully tempting for employees booking business travel to search and make reservations through their favorite travel websites, just as they would for personal travel. However, the data collected and analyzed by a TMC won’t include travel that was booked outside of an official channel. So unless you have 100% travel policy compliance from your employees (which seems doubtful), there are numbers left out of the analytics, which could significantly affect data interpretation.
3. Size Matters
Travel managers negotiate discounted rates based on volume. A June 2016 report from Business Travel News on Small and Midsize Enterprise Travel Management suggests that travel programs with a volume of less than $2 million will have difficulty accessing those discounts and benefits from vendors. So, unless you’re a larger company, TMC-provided discounts might not offset the transaction fees you’ll be charged.
The fees associated with TMCs can be costly, but theoretically, TMCs should still save you more money in the long run due to their negotiated fees and data assessment. Aggregating travel data and analyzing trends in expenditure provides powerful knowledge that can help streamline travel and reduce costs. You just need to be sure that your TMC provides you with innovative service that is worth your investment. However, if you’re a small business owner spending less than $2 million on annual travel, that may not be a viable option. So, what other choices are available to manage your business travel?
A Laissez-Faire Approach
Open booking is the practice of allowing employees to book their own travel itineraries however they like instead of strictly going through third party channels already established by the company (such as those dictated by a TMC). This freeform concept provides the most flexibility for travelers because they can use any platform or vendor they like so long as their choices comply with company travel policy. Before allowing an open booking policy, management should invest in travel policy education for their employees. Being proactive goes a long way in securing compliance and ensuring travelers’ safety.
Top Advantages of Open Booking:
Perhaps the best advantage of open booking is the traveler’s sense of personal choice. Open booking allows travelers to prioritize their preferences and maintain control over their travel experience. They get to secure that aisle seat; that hotel near the park with the great running trails; the rental car that can accommodate four clients most comfortably. This flexibility can be extremely valuable to an employee, especially with the rise in bleisure trips (business + leisure). By 2020, millennials will comprise 50 percent of the global workforce; with frequent job-hopping becoming a millennial rite of passage, high job satisfaction is a powerful way to ensure employee retention and recruitment. Flexibility in the travel booking process can add to that high job satisfaction.
2. No Management Fees
Another obvious benefit to open booking is savings in fees that would normally go to a TMC. The transaction fee cost for online booking sites is minimal in comparison; so, as long as your employee isn’t making $3,000 per hour, it might be more cost-effective to allow him or her to book the trip themselves. The traveler gets to book when and how it’s convenient (while still following travel policy) and management doesn’t have to take on those additional fees.
3. Loyalty Programs Still Count
Just because you’re opening up the gates doesn’t mean you have to let in every visitor that comes knocking! You can give your employees freedom to book where and how they like while still maintaining a few guidelines that support them and help them choose travel providers at reduced cost. One way to do this is to encourage travelers to use airline and hotel loyalty programs as well as travel rewards credit cards that award points back into the company travel program. Tracking travel expenses through a credit card aimed at business travelers can be useful because employees can take advantage of reward programs while employers have access to concrete spending data (what was actually spent rather than what was booked).
Disadvantages of Open Booking:
1. Booking Can Be a Major Time Suck
With a plethora of online travel sites offering packaged discount deals, it may sound like a great idea to just use open booking to find flights, hotels, and car rentals. However, while many consumer sites for online booking are user-friendly, there’s also usually a whole bunch of filters that spit out a huge amount of information that needs to be compared. Travelers often don’t have the time to fully engage in that comparison. Spending lots of time scouring the internet for a good travel deal often leads to confused frustration at the sheer magnitude of options, which in turn may lead to a traveler booking “the next best thing that pops up” in an effort to simply end the whole ordeal–which defeats the purpose of all that time and effort. Finding the most efficient route with the least amount of travel time and expense that also conforms to company travel policy can eat up valuable working hours that could, and often should, be spent elsewhere.
2. Online Booking Does Not Guarantee the Best Deal
However, if an employee does prioritize work and leave booking until the last minute, there’s the problem of exponentially rising airline ticket costs the closer one books to the departure date. Plus, if there’s a later need for exchanges or refunds, or if “hidden fees” suddenly pop up on the invoice, you’re looking at even more extra cost. According to a recent study by Concur, booking a flight at least eight days in advance can save an average of $148 per ticket, and booking at least fifteen days in advance can save an additional 22%–if the employee makes the effort to book travel this far in advance, of course. Open booking clearly leaves your company at risk of losing out on these savings. Searching for the elusive holy grail of bookings is often more trouble than it is worth.
3. Loss of Centralized Data
Expense management relies on data collection, so allowing open booking also necessitates that a company use comprehensive administrative tools to track invoices, receipts, and other relevant financial data that will affect budget projections. Your employees don’t have access to the comparison data to see if they’re getting the best price on their bookings. If you don’t utilize a TMC, your company will need to collect data from your employees’ travel itineraries in order to confirm policy compliance and conduct routine checks for travel fraud. Even then, having the accurate data doesn’t provide insight into what it all means. You’ll need to compare your company’s spend to benchmarks of similar companies across the industry, as well as pre-discounted prices, and then figure out a way to tweak travel policy and secure compliance. Yeah. Have fun with that.
Another thing to keep in mind with open booking is duty of care. Travelers using Uber, Lyft or Airbnb might be saving the company money, but are they doing so at the expense of their own safety? If duty of care is at the top of your concerns, know that there are new technological ways to keep employees safe and reduce travel costs while also maintaining data collection and streamlining the booking process.
Technology on the Rise
We’re living in a world where almost everything is turning digital, and that means there are constantly new technological solutions emerging in business travel. Digital travel management offers modern efficiency without the heavy price tag. There are a several kinds of digital travel solutions from which you can choose:
- Perhaps the most basic of digital travel services offered are mobile apps that can provide last minute deals for abrupt travel changes. Hotel Tonight, available on both iOS and Android, uses your phone’s location services to search local hotels for the best discounted prices. Users can book a wide range of options from “Basic” to “Luxe” (and also view customer reviews). The mobile app will also provide check-in details, directions, weather predictions, hotel amenities, nearby food options, and digital receipts that can be forwarded to data collection services.
- Another option is the A.I. travel agent, such as Hello Hipmunk, which searches your email and calendar in order to find travel events and offer recommendations for flight, hotel and rental car options. It’s available through the travel search website Hipmunk, and the easy-to-use chatbot is available on Facebook Messenger and Slack.
- There are also A.I. travel assistants, such as Claire by 30SecondsToFly, that work like traditional TMCs in that they provide special negotiated rates and can customize travel booking based on the traveler’s preferences. Claire can book policy-compliant travel itineraries, provide expense data to management, track travelers throughout their journey, and is available on Skype, Facebook Messenger, Slack, and through SMS.
- Finally, there are online companies, such as Egencia or Concur, which offer a fully digitized travel booking experience via mobile apps, and some include more traditional travel management services.
Advantages of Digital Solutions:
1. An A.I. Can Personalize the Travel Experience
Unlike online booking platforms that won’t save your travel preferences, an A.I. travel assistant learns from each trip booked and uses that information to provide streamlined travel service for future bookings. Travel search websites only provide an aggregate of available options. An A.I. can learn your preferences and suggest travel routes, local activities and restaurants, and provide other ways to truly tailor your travel experience.
2. Real-Time Travel Risk Management
With crisis events affecting nearly every part of the globe in recent years, duty of care has taken on a new urgency. Making sure that travelers are following company policy, receive real-time itinerary updates and travel alerts, and can be easily tracked in emergency situations are now essential. A good mobile app that offers these services can provide peace of mind for both you and your employees. For instance, Concur Risk Messaging tracks traveler locations via credit card transactions linked to the traveler’s account, and can update both traveler and management of any new risks in their area. This way, you know where your employees are (and that they’re safe), but the surveillance doesn’t cross the line into full, real-time tracking, which feels invasive.
3. Fewer Fees, Less Time Spent Booking
The whole idea behind A.I.s and other whip-fast digital solutions is that they can replace human labor (and even human error). Using technology instead of a travel agent to find and book the best travel options means the travel company saves money–which means you save money in the form of lower fees. Plus, you’ll spend less time searching through pages and pages of travel options and more time preparing those documents for that important meeting.
Disadvantages of Digital Solutions:
1. Not All Bots Are Created Equal
We’ve all experienced that moment when technology just won’t do what it’s supposed to do, and this frustration is often directly proportional to the difficulty of the task required. The newest travel chatbots are no different. Chatbots designed to help you book travel through conversational language can sometimes be easily confused, or ask several similar questions in order to glean the traveler’s need, which is both time-consuming and tedious. Even more traditional non-A.I. digital solutions aren’t always fully fleshed out. We spoke with Angela Zade of staySky properties, who explained that her company just switched to a new online booking platform because their old one was “clunky and less reliable…The ease of an online booking engine is crucial for our hotels. Without it, we lose business.”
2. International Snafus
Even if you’re a seasoned business traveler, the complexities of international travel can be difficult. Trying to manage a multiple-leg business trip for a whole team with various traveler needs can be overwhelming, for both humans and bots. The online tools provided may not be up to snuff or able to take into account personalized traveler requirements. This means you’d need help from a real human, which translates into paying an agent-assist booking fee that will drive up the cost of the service.
3. Lack of Customer Support
Not all of the A.I.-driven bots have support staff available 24/7 like some TMCs. This means that if the bot malfunctions, or operates at a snail’s pace, you might be on your own. At times like this, it’s important to be aware of the limitations of these tools and make sure the level of customer support is where you need it to be.
Choosing the Right Corporate Travel Solution for Your Company
When it comes to corporate travel, the solutions keep growing–which creates great opportunities for managers, travelers, and vendors. No matter your position, the smart play is to keep up on the latest technological and management innovations and take advantage of as many advances as possible. Travel management companies are most likely essential for larger companies with thousands of employees (and their data) to keep track of, but it’s important to negotiate the best level of service. For small to medium sized businesses that don’t like the idea of open booking but can’t afford the fees of a larger TMC, looking into a digital solution that can offer centralized data and customized support might be the best bet. Ultimately, there are a myriad of options available and each company should explore the possibilities and decide what works best for their travel needs and budget. With this industry, the potential gains are endless.