How to travel smarter

The Canadian Professional Sales Association (CPSA) 2006 Business

Unfortunately, the 2007 American Express Global Business Travel Forecast predicts increasing costs.

"Keeping executives on the road while holding budgets in check will be a challenge for organizations," says Mike Streit, vice-president and global leader for American Express Business Travel. "For instance, compared to 2006, the forecast indicates an average domestic North American trip, inclusive of air fare, car rental and hotel will increase $46, or 4.5%, in 2007, and an average international trip with its air fare and hotel stay will increase $180 or 4.6%."

In Canada, the study predicts fares will rise about 3 % for domestic routes and 4-6% for international routes.

hotel rates rocket

Meanwhile, skyrocketing demand for hotels will continue to give hoteliers more control over negotiations, with few downward pressures available to stabilize pricing. Rising occupancy, limited supply growth, and competition between leisure and corporate travellers will give hotels the confidence to increase rates.

For example, 2006 costs for international hotel bookings were up 8.5% to $23O, or an extra $18 from the $212 average in 2005.

Perhaps most surprising was the increase in budget hotel rates. Budget hotels averaged $179 per night, compared to $130 in the first quarter of 2006. Economy hotels, which are considered to be a better class of accommodation, averaged $164 a night.

Car rentals showed a higher average daily cost as well. Prices rose 4.5% to $69.

"We anticipate that more organizations will ramp up their procurement focus, implement new technology tools at the point of booking, update and strengthen their travel policies and focus on traveller behaviour to ensure that negotiated savings are realized," says Streit.

"The migration to online booking is growing and the visual guilt associated with fare transparency will gain even more momentum as a strategic imperative. A growing number of corporations will zero in on corporate meetings spending as this area, until now, has been under-examined and is ripe for savings and control opportunities," Streit continues.

Online booking

While costs are rising, there are ways to save.

"By consolidating all your travel purchasing into one travel management company that provides an online booking tool as one of the vehicles for fulfillment, you can optimize your program from a cost savings perspective, as well as gain many other efficiencies," suggests DeAnne Dale, vice-president of strategic account management and consulting services for Travelocity Business, based in Dallas, TX.

GetThere, the world's leading online corporate travel reservation technology, recently announced the milestone of 10 million bookings made by corporations using their system. Clients reported an average savings of 14% on air tickets alone compared to other booking methods.

With professional travel management, you get powerful information that can be used in your favour. "If you aren't gathering any information, you won't be able to leverage your spending. If your travellers are free-range booking, as you grow, you won't have anything to go back to your suppliers with to negotiate preferred discount programs," says Dale.

"There are many more controls in place as airline prices continue to rise due to fuel costs," she continues. "It also depends on how aggressively managed the company is. Companies are putting tighter controls on policy. For example, some only allow business class seats for their executive team or VIPs. Others have business class bookings only if the flight is over eight hours now. It used to be over six hours."

There's also been increasing use of corporate card programs. "Some companies say that if employees don't use their corporate card, they won't be reimbursed. That's because the card information identifies where the leakages are within the program," she says.

Travel reports

Another useful tool for managing costs are travel reports. Reports from a travel management company are detailed and far-reaching.

"Our reports identify opportunities," says Dale. "If a company has five different operating units we build our reporting to identify the information. Then we can issue a monthly report to each business unit so they can look at it as a whole and manage compliance."

The reports drill deep. "We can see a pattern, whether it's one individual or one department that is costing more than it should," explains Dale. "When the executive team sees this, it creates internal competitiveness between units. As well, it shows who the rebels are who are not following policy."

The information can be rationalized, of course. "If the travel was for a sales department, the policy may or may not reflect what they truly do. They might have different behaviour and travel patterns than everyone else," she says. "This is where the account management group comes in to show where savings are, but also take the company's culture and objectives into consideration and align these programs together."

Car rentals

Car rental is going to become a point of cost controversy.

"We did a study that showed that some local municipality taxes being imposed on the car rental companies at the airport can represent about 26% of your cost," says Dale. "There can also be as much as a 50% difference between renting a car at the airport rather than offsite, so consider taking a bus or taxi to an offsite location."

Car rental prices are predicted to be more expensive because Vanguard bought the National and Alamo agencies, the three of which represent more than 50% of the industry. "Unless Vanguard tiers their rates, the cost could go way up," says Dale.

7 Time Saving Tips

Controlling costs is an important aspect of business travel. But losing time can be just as expensive. Here's how to save time:

1. At the airport, use the self check-in kiosks. A recent J.D. Power and Associates study found that 38% of passengers do, and your wait will be half as long.

2. Use Wi-Fi access to work wirelessly, wherever you are. More areas at airport gates and lounges, rail terminals and hotel lounges are increasing their coverage.

3. Use express check-in and check-out. Ask for e-folios (electronic bill receipts) if you don't have time for a paper copy.

4. When renting a car, pre-pay for the first tank of gas when you pick up your car so you don't have to re-fuel it when you return it or pay a service charge for not refuelling it.

5. Get a Nexus card to fast-track your border clearance at land crossings. It costs about $80 for five years. Plans are to expand it to airports and marine borders in 2008. Getting the card requires fingerprinting, a personal interview and background check. About 120,000 people have them.

6. To avoid flight delays, book direct flights or morning flights, and be wary of tight connection times of less than an hour (especially different airlines). If you hear an announcement about a mechanical delay, go to the nearest ticket counter and book yourself on the next flight or another one. Most mechanical delays last hours, and some get cancelled. If there's a weather delay and you have access to the Internet or TV, see what the predictions are for it clearing to make your decision about booking a hotel. Always pack your carry-on as if you'll be delayed overnight somewhere.

7. Airlines lose about six out of every 1,000 bags, according to the U.S. Department of Transportation. Make yours look different to find it faster on the carousel. Always include two ID tags on the outside (since they fall off) as well as on the inside. Lost luggage reimbursements are up to $2,500 now, but most airlines don't reimburse for computers, cameras, jewellery or money, so unless you have expensive clothes or the suitcase itself was expensive (and you can prove it), get independent insurance.