In these times of financial crisis, the global business community is collectively tightening its belt by as many notches as it can. One of the best areas to trim unnecessary spending is in business travel.
Second only to paychecks in terms of amount of business spend, travel expenditures can be drastically reduced by those savvy enough to choose the right fit for their operations. Whether it is a travel management consultancy or an online booking agency, or trimming down in-house, finding the right method can help bring travel budgets under control.
For businesses of all sizes, cutting down on unnecessary business trips should be at the top of the list. IQAsia, a travel industry consultancy which conducts business in northern and southern Asia, Australia and Europe, uses low-cost online meeting and conference resources such as Skype and iChat video to connect with clients whenever possible, said IQAsia managing partner Eric Liebman.
The company also qualifies all of its employees’ business travel beforehand, evaluating the need for the business trip using an in-house, seven-step evaluation process.
"Our people don’t get on airplanes until the customer has satisfied at least four requirements and we can validate that a strong potential for business exists," said Liebman.
He was keen to stress that IQAsia doesn’t go overboard in its conservatism. Employees are not forced to fly with low-cost carriers or follow bizarre routing for the sake of a few dollars.
"If the travel is necessary, our consultants should at least be able to travel with convenience and comfort, if at all possible. We also do not require customers to pay for premium airlines or business class or five-star hotels. We’re quite modest in our requirements."
But in Asia, sometimes it’s worth it in the long run to spend on a business trip to build relationships, which is key in cracking the Asian market. As a general rule, a great deal of emphasis is placed on personal relationships. These ties are difficult to build through computerized meetings or teleconferences.
"Of course businesses in Asia will naturally understand if you don’t make a special trip out to see them," said Liebman. "But your competitor will, and they will end up building a relationship instead. In Asia, relationships equal revenue."
It is this kind of relationship base that online booking agency Ctrip uses to its advantage, said Ctrip business development manager Coley Dale. The Chinese equivalent of American site Expedia.com, Ctrip, founded in 1999, is the market leader in China, snagging over 50% of all online bookings. It has the largest network of hotels in China, and boasts customers like Coca-Cola and Sony.
Considering that large hotel chains have yet to make significant inroads into the country, these relationships with independent hotels can prove invaluable for the business traveler who would prefer not to stay at a five-star establishment when there is a more reasonably priced hotel down the street.
Under the microscope
In 2015, China is expected to surpass the US as the world’s most visited country. In anticipation of this surge, Ctrip expanded launched a full-service English-language website in March of last year to better meet the needs of English-speaking business travelers.
As a corporate travel tool, Ctrip offers software functions that allow managers to set limits on employee hotel, flight and other travel reservations. For instance, if a manager wanted his employees to travel only economy, then they would only be able to book economy through the company Ctrip account.
Most online booking agencies use a variety of of IT solutions, such as those provided by Amadeus, a Spain-based travel IT solutions company.
"The right technology solutions can help travel providers to streamline processes, increase efficiency and manage costs," says Amadeus Asia Pacific president David Brett. "This is currently of even more importance due to the economic downturn, which means operational costs are under the microscope."
Amadeus, active in Asia for more than 13 years, processes the largest number of travel bookings in the world. Its partners include leading airlines, travel agents, hotels, travel websites, rail systems and car rental companies, as well as travel management companies and corporations.
In addition to providing its own online booking services, Amadeus also creates IT platforms that other online booking services can use to streamline the products they offer customers. Last year the company processed over 1 billion bookings across the globe.
Some of the programs Amadeus offers service providers include the ability for those with mobility impairments to request special assistance at airports at the time of booking. The company has also introduced an SMS service, developed in Asia, to help travel agencies customize services by sending travel information directly to customers.
Huawei Technologies is one of a number of Chinese companies that has adopted Amadeus’s e-Travel Management solution program to manage their corporate international travel. The program enables companies to ensure employees are adhering to corporate travel policy and increases transparency for easy tracking of travel spending. To date, all major carriers in China – Air China, Cathay Pacific, China Airlines, China Eastern Airlines, China Southern Airlines, Dragonair and EVA – have outsourced part or all of their e-commerce activities to Amadeus.
However, Chinese travel agents are prevented from using international agents like Amadeus to book flights on domestic or international airlines. That right is reserved for TravelSky, which enjoys a near-monopoly in China.
Though growth in general has slowed, online travel bookings continue to account for an increasing percentage of travel bookings in Asia, due to increased access to the internet and trust in online payment processes, said Brett. This is good news for travelers, as airlines and travel companies compete to entice customers to book online.
The personal touch
For businesses that prefer the personal touch, a travel management consultancy is the way to go. At Travel Management Group (TMG), a UK travel management consultancy that has been in operation for over 20 years, it is "very much about relationship management and the bigger picture," said corporate division director David Moore.
According to Moore, clients now demand greater transparency in their travel budgets. This means more detailed quarterly reports and in depth explanations as to why a given expense is necessary. This attention to detail is difficult to find through an online booking agency.
Most of the firm’s clients are long-term, allowing TMG to monitor business travel patterns and adjust plans accordingly. In this way, travel management consultancies like TMG are able to tailor services to very specific needs. For example, travel security data is used to keep track of clients on business trips around the world. In the case of emergency, the company can quickly locate and assist clients. This kind of service has led to TMG’s sports division handling many foreign football teams traveling in Asia.
Though the effects of the world’s financial state are causing companies to think twice about sending their clients abroad, travel remains an essential and intrinsic part of doing business. Companies that can find ways to cut travel costs without cutting business will be best positioned to survive.
Best practices for smart travel
Consider premium economy. Premium economy class seats offer some of the perks of business class for less. For the same price as a full-fare coach ticket, Singapore Airlines and Virgin Atlantic offer wider seats, more legroom, free drinks, better lighting and curtains for privacy.
Watch your credit card. Some cards charge extra every time you use them at overseas ATMs. If your company card charges for foreign currency, consider switching to one that doesn’t.
Check your cell phone. International roaming charges can be expensive and are frequently unnecessary. TravelCell rents out local cell phones for use in 150 countries for about US$30 per week.
Get the most from air miles. If you are expecting a spate of business travel to come up soon, check your frequent-flyer program for the possibility of gaining elite status before you log the minimum number of flight miles.
Keep flight flexibility. Booking on airlines that allow passenger changes on non-refundable tickets for a minimal fee allows you to change or cancel tickets without taking a total loss.
Consider alternate routes and multiple one-way flights. Non-direct flights are cheaper than direct routes, and also offer the option of combining business trips. Combining one-way flights can be cheaper than booking round-trip.