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Travel managers: a watchful eye on business travels

The economic crisis has forced all companies to submit all expenses for approval that are susceptible of generating reductions of expenses. Business travel is one of the first items to receive a draconian revision. Managed at major corporations by negotiation and organization professionals, they are under the watchful eye of travel managers, whose job as “cost killers” and keepers of the travel policy has been reinforced.

On this multi-billion euro market (28 billion euros for professional travel estimated in France in 2008– source AFTM), the first trend is to shrink expenses. A recent study realized at the request of the Association of corporate travel executives, Acte (see box), that brings together professional travel managers in large corporations, gives volume to the phenomenon. 93% of companies questioned announce a reduction in travel expenses in 2009. 59% of companies consulted declare they would like to arrive at these budget reductions by com­bining at once a decrease in number of trips and nego­tiation of prices for services from suppliers, while 39% will be satisfied with limiting the number of trips. “In just a few months these percentages have increased, particularly at American companies,” insists Susan Gurley, executive di­rector at Acte. “They reflect a greater concern about the ef­fects of the economic recession and the fact that it is here for some time.”According to a study presented at the last Espace Voyages Professionnels forum, this automation of procedures saves around 50% in the management of monitoring professional travel and avoids a large share of individual straying. According to this study, only 40% of French businesses use SBTs because they lack awareness or just stick to their old, more personalized approach with travel agencies out of habit. This figure should grow under as the pressure for saving rises.Whatever cuts are made to travel budgets, the role of bu­siness travel managers is not called into question in Europe, on the contrary. Companies rely on their know­how to find sources for savings and implement policies limiting travel. 68% of travel managers questioned indica­ted that their company had stressed respecting travel po­licies. This study shows that the items under very high surveillance are airline tickets in 85% of cases, hotel reservations in 59%, seminar organization and the use of self-booking tools (see box) in 46% of answers.Beyond the greatest respect for the regulations prescribed in corporate travel policies, for 65% of those companies consulted these rules have been further reinforced in terms of expenditure ceilings, choosing partners in favor of those likely to make additional pricing efforts, or criteria for justifying travel.The quest for savings also involves reinforcing the automation of procedures that have become necessary in more than half the companies interviewed. Control also happens through increased use (58% of responses) of Management information systems (MIS) and the preciseness of reporting to plan and control spending. These movements are not just a result of the crisis, but it is clear that it helped their implementation and sophistication (32% of cases).And yet, the quest forth the lowest price at all costs has its limits. Thus to the question, is your company ready to accept prepayment of hotel reservations if rates were more advantageous? The answer is no for 61%. This is the confirmation that flexibility in organizing itineraries and reservations re­mains an essential characteristic of business travels. Travel managers feel the need to keep options open when it comes to changes in reservations and cancellations. One of the great questions concerned the role and control, they have become essential partners for hotel place of travel managers in a context in which the chains. “It is normal for our negotiation power to be hinumber of trips is likely to shrink, as well as the global gher during a crisis. Higher categories - 4 and even 5 budget. In fact, for 75% of those interviewed expenses stars - are prepared to make efforts to maintain a good were not reduce in their service, nor was there a real business volume.” The period is propitious for putting change in mission, a sign that their position in the race pressure on sales and marketing managers and nego­to economize is determining.In this mission, travel managers are relying on new allies, particularly in terms of external partners and technological tools. Everything is being done to modify the bargaining power in the negotiation with sales and marketing managers at hotel groups. Philippe Noyez, operations manager France at BSI, is one such intermediary who enters to support travel managers in the hotel reservation management process. “We intervene to manage reservations for corporate managers at clients companies. Requests from companies is twofold: first of all they want to consolidate their information regarding hotel reservation expenses, which are globally ess well-known than transportation expenses; on the other hand, we must minimize accommodation expenses as much as possible. Here we have a double role as advisor and controller to elaborate the rules of the game and implement them.”Since the beginning of the year 2009, these intermediaries have seen a drop in their volume of business by 15 to 20% due to restrictions on number of business trips. And yet, because of the volume that they continue to control, they have become essential partners for hotel chains. “It is normal for our negotiation power to be higher during a crisis. Higher categories - 4 and even 5 stars - are prepared to make efforts to maintain a good business volume.” The period is propitious for putting pressure on sales and marketing managers and negotiations bear on the level of the rate and the period during which it is applied. Not only do we want to make all our key account clients benefit from better rates, but we try to guarantee they will last. If were develop a new price grid in function of volumes, it should remain valid for at least two, or even three, years,” adds Philippe Noyez. “It would be difficult to explain to our clients that prices can go up brusquely at the slightest sign of economic improvement. In our belief, commitments made by hotel groups can only be conceived in the long run.”Another mission of these middlemen is to ensure corporate travel policies defined by companies are respected, while maintaining some flexibility as necessary for a good social climate. “There is a certain amount of tolerance with regard to accommodations. Our job is to ensure that an average of 70% of hotel reservations made strictly respect the corporate travel charter, 30% may be left to the traveler’s initiative regarding hotel preferences. But this doesn’t mean anything goes… less and less so. We regularly provide statistics and reports to corporate managers. Hotel expenses, even outside the framework of the travel policy, must be coherent with the policy. When there is a significant difference, we raise the point. Thus it is up to the hierarchy to decide whether or not there is abuse or if the expense may be authorized.”Travel managers, travel agencies and specialized reservation centers work together to keep watch over business trips and provide maximum supervision. In terms of hotel expenses, when it comes to developing corporate travel policies the rule is to determine an average cost for each destination. “We have price indicators posted by destination and negotiated average rates,” explains Philippe Noyez. “Our role as advisor comes into play to define the lists with respect to the categories of personnel at the company, offering the necessary comparisons. It is thus in hotel chains’ best interest to make their proposal fall within the this average cost schema.”Technology has long since made its appearance as a working tool for travel managers. These tools have become increasingly sophisticated over time. “Our clients want tools that broaden their scope of work and allow them to verify spending through all kinds of reporting,” explains Stanislas Berteloot, marketing director at KDS France, one of the main editors of business travel management software. “The new tools cover the more than the supply of hotels available via GDS by connecting to other sources such as specialized central agencies and Internet sites. The highest demand is for immediate connectivity with the different CRS”.Moreover, the possibilities for analyzing new software keep track of the slightest expense that could be considered superfluous. “We offer tools that are able reconstruct the contents of the hotel bill and break it down, even with personal credit card payments and especially payments with Corporate credit card,” continues Stanislas Berteloot. The new generation of Self-booking tools (see box) have a much broader exploration capacity and does not merely manage negotiated rate procedures with hotel chains. For a reservation at time T and subject to the same usage and flexibility conditions, the new software will verify whether not a better price is available aside from negotiated prices.The moral, hotel brands are subject to a great deal of pressure to agree to even more advantageous negotiated rates for business travelers and do not even have the certainty of being automatically retained and being ensured of volumes that are more or less guaranteed, is a competitor decides to punctually make a better offer.Travel managers get organizedWhether skilled in networking and exchange of the best solutions, travel managers find themselves in the midst of several professional associations, a cross between thinktanks, discussion forums, trend indicators of trends and pressure groups. Internationally ACTE is a reference. In France, AFTM, a recent creation, is following in its footsteps. The Association of Corporate Travel Executives (ACTE) is a not-for-profit association established to provide executive-level global education and peer-to-peer networking opportunities. Membership spans all of business travel, from corporate buyers to agencies to suppliers, and accords all sectors equal membership. ACTE serves more than 6,000 executives in over 80 countries.ACTE aims at providing global and regional leadership for the advancement of the business travel industry through the exchange of knowledge and opportunity and the pursuit of excellence. Through its events and educational programs, ACTE facilitates understanding of market trends and issues in business travel and creates environments to develop strategies and bring solutions. www.acte.orgPresided over by Michel Dieleman, Travel Manager for the group Orange, the Association des travel managers français was formed out of a desire to validate a complex, passionate trade that brings together the world of Buyers, Information Technologies, Human Resources and skills in terms of professional travel. But the AFTM wants to go beyond the simple corporate approach to a trade to open up to training, the exchange of knowledge and reception of those who, tomorrow, will become the travel managers of major French, European and International companies. “We also must be the drivers at the core of France’s administrations and professional associations,” explains the President who wants to tackle many subjects that knit together the daily lives of business travel professionals, “we must share our knowledge about travel and traveler security, for example”.Self Booking ToolDo it yourself savings A Self Booking Tool is literally a reservation tool that may be used by the customer himself. Designed by a service provider specialized in management of professional and travel expenses (KDS, Ulysse, Amadeus… or outsourced by the travel agency managing this travel on the behalf of the company, this online reservation tool has its parameters set to include all the partnerships with preferred or exclusive suppliers: transporters, hotel chains, automobile rentals…. And automatically applies the negotiated rates and conditions attributed to each category of personnel.According to a study presented at the last Espace Voyages Professionnels forum, this automation of procedures saves around 50% in the management of monitoring professional travel and avoids a large share of individual straying. According to this study, only 40% of French businesses use SBTs because they lack awareness or just stick to their old, more personalized approach with travel agencies out of habit. This figure should grow under as the pressure for saving rises.

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