Travel managers can help clients cicumvent costlier air travel, hotel bookings: Egencia (Part-II)March 3rd, 2011 - 1:33 pm ICT by ANI
Proactively communicating and educating all travelers on the importance of corporate travel policies is fundamental to achieving savings through compliance. Executive support is key to coporation wide compliance, but other ideas to ensure a policy is adhered to is through organizing ‘travel day’ seminars; asking each department to manage a specific and accountable travel budget; offering detailed reports to manage costs; making company policy easily accessible online or on an internal intranet site and providing fresh updates on travel and hotel amenities through regular communication, the Egencia study says.
Among its recommendations on how to save money on air travel, the 2011 Cost Avoidance study reveals that non-refundable tickets cost up to 54 percent less on average than refundable tickets on domestic routes in India.
The study indicates that in most instances, these savings more than make up the loss from the small percentage of cancellations with only ten percent of overall tickets purchased in India changed.
It also says that booking travel online, often results in selection of the lowest logical fare of the day, which can result in significant savings.
In a 2010 study comparison of flights, Egencia India clients saved an average of 16 percent on point-to-point tickets booked online compared to offline purchases.
Given the change in market dynamics, the study also indicates that it is absolutely essential to inform the traveler or client on hotel rate (per diem) limits on a regular basis.
It says that many organizations today have established rate caps for an entire geographical region - say for instance Europe, or North America, or the Asia-Pacific region etc, and have not taken advantage of city-specific per diems.
Therefore, if you are applying for price caps for cities or regions, it would be advantageous to look at what the hotel ADR (Average Daily Rate) has been in the last year, and then apply a price cap of five percent below this rate.
This, the study says would be an effective way of incrementally reducing business or corporate travel spend.
For instance, the Average Daily Rate for Indian capital Dehli is currently 268 dollars. By implementing a cap of 250 dollars, an average seven percent savings per transaction would materialize.
The study is of the view that once city-specific per diems are set, travelers would be confident to book up to the hotel limit.
As per the study, 72 percent of travelers fail to book in advance, and therefore, it is advisable to set a 21 to 30 day advance purchase policy.
By booking 21 to 30 days in advance to Mumbai, travelers saved as much as 14 percent on ticket purchases compared to those who booked at the last minute (i.e. less than a week).
The study recommends purchase of travel insurance, as in many instances, costs outweigh the benefits if a small percentage of trips are cancelled.
It also essential to be informed about a travelers’ most widely traveled routes and to focus negotiations on those, not the “one-offs”.
When comparing options online, travelers gravitate to lower-priced fares. Therefore, apply the Visual Guilt effect - ensuring all employees treat company money spent on business travel as they would treat their own.
On hotel discounts and amenities, the 2011 study says that hotels may be more resistant to further lowering their rates, but that does not mean that travel management firms cannot negotiate for additional amenities and benefits that reduce bottom lines.
Additional amenities and benefits may include last room availability; last day cancellation (up to 6 p.m. on day of arrival); no blackout dates; free Wi-Fi, breakfast and parking.
It says that travelers need to be educated on the availability of these benefits through targeted communications.
The money saved can be substantial.
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