Business travel costs consume large portions of operating budgets and executive time. Add the time spent planning and running the gauntlet of more stringent security measures and is it any wonder travel plans are more vigorously contested? The job of arranging business travel is now more time consuming and complex than ever.
Little wonder then that more organisations are outsourcing the job to specialist travel managers. Travel companies, once agents for suppliers, have become more sophisticated and now work with clients to save both time and money.
It might still make sense for secretary or personal assistant to arrange an online booking for simple domestic flight, but it’s not cost effective to have them organise more complex business trip. Travel experts are generally speedier, and should deliver both better deal and some added value.
A good travel manager will get to know personal preferences and the client company’s culture. Preferred travel times, seating choice and what they’re likely to want for breakfast should all be part of the service.
The best travel management companies are almost an extension of the client organisation, in tune with the climate and culture.
The corporate travel market is built on relationships according to James Langton, president of the Travel Agents Association of New Zealand. Customers trust agents to provide service, the best deal for the travel dollar, and an ability to look and think outside the square. “We all have access to the same deals – so if you’ve got good travel operator don’t change because the relationship gets better with time,” he says.
Neil Tolich, managing director of Atlantic Pacific Radius, thinks business travellers should examine travel companies to discover one with the electronic and human brains to fit the client’s culture. “Writing air tickets is the least important part of what we do. It’s more about realising the mix of different organisations, all with different motivations, people and deadlines. It can take some months to build good understanding and feeling but it should become seamless relationship,” says Tolich.
Service, however, is increasingly delivered with price tag attached. Travel agents margins are being squeezed as airlines reduce ticket sale commissions forcing customers to pay for the service. “We’ve been reluctant to charge [clients] but that is changing with the worldwide move to reduce commissions on hotel bookings and flights,” says Langton.
United States’ airlines have stopped paying any booking commission to independent travel agents. Travellers pay for the itinerary design, time spent in making reservations, plan changes, checking alternative routes and any related services. Ironically, US travel agents report an increase in business. It seems customers are willing to pay for professional assistance rather than wait for, or deal with, generally unhelpful airline reservation staff.
Langton believes New Zealand will follow the same route. Meanwhile, business travel agents here provide comprehensive service that “leaves other countries around the world for dead”.
Migration
Grant Bevin, managing director of First Travel Management, thinks business travellers are migrating from bigger travel management companies to smaller operators which offer heightened service standards. “Companies want us to negotiate the best deals on their behalf and expect us to keep an eye on management expenses. They expect to pay for the service, but they get it back tenfold because of the savings we bring to the table.”
Managing client’s individual needs is important to Andrea Gregory, strategic procurement manager for TVNZ. She is, she admits, difficult client. “We travel lot, frequently to remote places and often on time-critical schedules. We rely heavily on our travel management company and trust them to provide us with the best options. They must have extensive knowledge of the industry, need to know our organisation inside out and must deliver value-added service.”
Travel managers, under increasing pressure to justify the reasons for travel and the outcomes, are using reporting services that analyse the figures, the advice given and keep track of costs. “You have to be accountable and companies want to know the return on the investment in any trip. Sometimes it is hard to measure returns. We know that in business you can’t beat dealing face-to-face but, being there to build the relationship is difficult to measure in monetary terms,” says Gregory.
The opportunity to cut expenses and deliver business travel cost savings to its clients led House of Travel to launch Orbit Business Travel last year. The specialist subsidiary uses an email-based booking engine known as OB2 to make bookings and track costs. Corporate general manager Scott McCrea says Orbit has grown 40 percent in just 12 months. “There’s been huge interest in OB2 because no-one else has pure email booking engine for domestic travel. Travellers have the various options in front of them within minute. By perhaps choosing slightly later flight they can save hundreds of dollars on business trip.”
The company has also developed an e-ticket tracking system to search and detect unused tickets. When the consultant goes into the system to make booking, the software automatically suggests utilising unused tickets that offer significant savings. “One client found $40,000 worth of unused ticket credits. Agents are not always aware that these exist,” says McCrea.
Electronic ticketing and the internet have transformed the business travel market, according to David Allen, managing director NZ and ASPAC Sales for Sabre Pacific Pty.
Big savings
“Experts predict savings of 50 to 75 percent with online transactions costing no more than third of full service transaction today. Industry analysts believe that within two years, 20 percent of corporate transactions will be online driven,” says Allen.
Serko Online, business-to-business e-commerce solution is an example of leading technology that allows customers to manage their own travel arrangements.
Developed by Signature Travel, the system allows corporate traveller to make reservations and alterations to schedule at any time of the day or night, via their personal laptop. Signature’s group managing director Darryll Park says the system offers real time and cost efficiency.
This system, according to Park, is valuable where contract compliance is important. Its reporting options deliver clients financial analysis and cost efficiencies plus benchmarking and tracking of the company’s performance history against the market. “We can be financial controller, auditor and travel arranger,” says Park.
The internet is also becoming increasingly popular, particularly when it comes to booking accommodation. There is, it seems, trend toward booking smaller boutique hotels.
Christine Voelker of ‘8 Parliament Street’, an upmarket B&B in Wellington, says executives who travel frequently like to stay in more personal atmosphere. “Guests, particularly women, appreciate touches like nice interior design, essential oils in the bathroom and contemporary art work,” says Voelker.
Another Wellington boutique hotel, which caters for women guests only, is The Mermaid set up six years ago by Francesca Brice who had been living in Greece for 20 years. “I had my own company, travelling lot on business, and found it daunting on my own. When I came to New Zealand I saw niche market for women who travel. I wanted to create an environment where they could feel secure and safe and were able to relax in an atmosphere where they could walk around the house in their bathrobes if they wanted to,” says Brice.
Environment
Elisabeth Vaneveld, senior manager with Creative New Zealand, is regular guest at The Mermaid. She travels to Wellington about twice month and wants accommodation that saves on costs and provides sense of home environmen
