In a 2014 GBTA Foundation survey,1 travel managers in North America and Europe cited containing rising costs as their #2 priority, behind enforcing travel policies, and it’s no wonder — given the anticipated 2.6 percent increase in global hotel rates.2 Yet so many corporate travel managers have to scramble just to stay on top of administrative tasks associated with their hospitality programmes — making it hard to focus on reducing costs. Inefficient processes for sourcing hotel rooms, inadequate negotiating leverage, and noncompliant bookings only add to the problem and make controlling these costs virtually impossible.
To truly get a handle on costs, travel managers need to automate these processes as much as possible. By automating the RFP process, travel managers gain control over negotiations with suppliers by being able to manage higher bid volumes.
But getting great hotel rates isn’t enough. Travel managers need to ensure that their travelers are booking hotels at correct negotiated rates. That’s why automated rate auditing is also crucial to keeping costs down.
Travel programmes that have embraced automation have seen dramatic reductions in their overall spend — by negotiating lower rates on hotels, increasing traveler compliance and by reducing the labour spent manually managing these processes. If that’s the case, then why aren’t all travel programmes getting on board?
One reason is complacency; people are just used to doing things a certain way, even when it’s not in their best interest. Perhaps they aren’t bothered by all those nebulous spreadsheets, or perhaps they’re afraid they’ll be sacked and replaced by a computer.
More likely, travel managers are simply unaware of the significant return to be made on an investment in an automated travel management solution. And while there’s not much to be done for the complacent, this can and must be addressed.
In 2014, Lanyon partnered with Hobson & Company, experts in ROI/TCO modeling, to help us quantify the return on investment of our travel management solutions. We found that, by using our software, travel programmes could receive upwards of 448% ROI over three years.3 Working with Hobson & Company, we’ve also developed a travel programme ROI calculator, which we will be demonstrating this February at the Business Travel Show. We do hope you’ll come by our booth and try it out. What you discover may surprise you.
- A Day in the Life: The Role of Travel Managers (North America and Europe), Global Business Travel Association Foundation, October 2014
- 2015 Global Travel Price Outlook, Carlson Wagonlit Travel (CWT) & GBTA
- Driving ROI: The Business Case for Comprehensive Travel Management Software, Lanyon, 2015