Unless otherwise noted, statistics and observations in this book are from the author’s experience managing travel for more than 275 organizations. No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission from the author.
Dedication This book is dedicated to all the coaches in my life: first and foremost my wonderful, talented partner – in business and in life – Ellen MacNair; our children; my business Coach, Dan Sullivan; my dedicated staff; and my life’s experiences around the world.
Table of Contents Forward, by Chris Kroeger, Sabre Travel Network………. 6 Author’s Preface ………………………………………….. 7 An Introduction to Travel Management ............................. 8 Travel Management’s Balancing Act ..................... 10 The Benefits of Travel Management ...................... 11 What’s in This for You? ......................................... 14 Ch 1: Preflight—Assessing Needs .................................... 16 Know Thyself.......................................................... 16 Know the Travel Opportunity Universe ................. 18 Ch 2: Flight Plan—Developing Your Action Items ........... 26 The Travel Management Ecosystem™ ................... 26 Ch 3: Flight Crew—An Insider’s View on How to Select the Best TMCs and Supplier Partners .............. 43 Negotiating with TMCs .......................................... 43 Negotiating with Travel Suppliers .......................... 48 Ch 4: In-Flight—Plan Implementation and Communication52 At Plan Implementation .......................................... 52 Ongoing Communication ........................................ 53 Communication for Emergencies ........................... 54 Travel Links ............................................................ 55 Ch 5: Flight Certification-Benchmarking and Evaluating 57 Turn Your Travel Plan into an Ecosystem .............. 57 Conclusion—Enhance Your Organization’s Achievement through Travel Management....... 59 Appendices: Tools to Help Your Progress........................ 60 Appendix I: Worksheets ......................................... 60 Appendix II: Resources........................................... 65 Appendix III: Glossary ........................................... 66 Appendix IV: Selected Travel Profiles ................... 73 Appendix V: About the Author............................... 75
Foreword With the tremendous complexities facing today’s travel industry, I have never seen a greater need for a focused approach to managing corporate travel. The development and evolution of Corporate Business Travel has accelerated over the last decade, becoming increasingly complex and dynamic. There was a time when only global corporations used a true travel management plan, but more recently doing so has become a mainstream practice for companies large and small. Agencies have had to develop programs and compliance policies to manage business travel eﬀectively, as the pressures of cost containment keep the spotlight on strong corporate travel programs. I am always looking for folks who “get it.” And Mike MacNair “gets it BIG!” His book highlights the benefits that may be achieved by utilizing all travel management options. He also shares his wisdom gained as a longtime advocate, within the travel industry, for corporate travel. By championing corporate end–to-end programs, he’s gained extensive and diverse experience. This book is one of the best educational tools to help you understand the value of a strong travel management program and develop and maintain it. Watch as your organization’s travelspending power grows. Sincerely, Chris Kroeger Senior Vice President Sabre Travel Network
Author’s Preface As you are reading this book, you will find it useful to refer to the appendices in the back. There are also various worksheets for brainstorming about how to apply the ideas in this book to your organization referenced, which you can download here: http://www.macnairtravel.com/newsandtools/travel_leadership. The appendices include a list of useful resources, as well as a glossary with travel management terms, both common to the field and particular to this book. If you have any questions about this book or want to know more about how quality travel management can help your organization, please visit our website at www.macnairtravel.com or email me at [email protected]
Worse yet, under travel anarchy both the individuals and the entire organization are at higher risk for costly travel complications and liabilities. And without strong controls, the organization itself is undermining a culture of cost containment. Where else are employees permitted to purchase whatever they want from whichever vendor they want? FEES VS. THE COST OF TRAVEL Instead of eliminating fees by giving your travelers’ total freedom (and responsibility) to book their trips, spread your cost-saving efforts over all of travel’s expenses. A quality TMC can help you save much more than what it charges in fees, and you’ll reap a variety of benefits.
Compounding travel anarchy in many organizations is the fear of paying fees to a travel management company (TMC). (TMCs had to start charging fees for their services after the elimination of airline commissions, and at about that same time online travel companies emerged, enabling employees to buy tickets themselves and bypass TMCs.) Many organizations don’t understand the return on investment delivered by TMCs, so they focus on the fees as if they were the only travel costs they can control. The reality is that TMC fees are the smallest part of a travel budget.
TIP: The biggest opportunities are in the biggest costs.
This book will help you regain control of travel management at your organization. It will reveal:
all the potential benefits that travel management can offer,
your biggest travel challenges and weaknesses,
your current strengths to maximize, and
your travel opportunities to implement.
In short, this book shows you how travel management will improve your bottom line and how to move this process forward. You’ll also find some surprise benefits that you may not have even thought about. Travel Management’s Balancing Act Today’s travel management should create a balance between what the organization expects from its travelers and what the travelers want for themselves.
support, direction, and strategy than they get when they book on their own. It also respects the fact that travel can be a hassle. The Benefits of Travel Management Over the years I’ve found that the benefits of travel management fall into four categories that are critical for reaching an organization’s key corporate objectives: Savings, Productivity, Support and Control.. The epitome of travel management is what we call Travel Leadership and the antithesis is what we call Travel Anarchy.
Here is how you take advantage! SAVINGS Shop all the right sources for the lowest prices (and save 10% or more).
Define what rates travelers should take and when, and then make sure they take them. Leverage deals with travel suppliers. Reduce unnecessary trips by implementing an authorization process. Minimize the cost to change and cancel trips and maximize what you can get from unused tickets. PRODUCTIVITY
Use smart technologies and support to focus employee attention off non-productive travel arranging, thereby freeing travelers to focus on their own work.
Improve corporate culture through organization-wide cost-cutting initiatives.
Increase employee retention through providing successful travel experiences.
Provide quality travel support before, during, and after each trip.
Communicate changes in your travel program and in the travel world quickly and efficiently.
Minimize liabilities emergency plans.
Collect data to ensure compliance with acceptable business practices, client accounting requirements, and/or governmental regulations or procedures, and use data to make decisions on facts and benchmarks.
Create, maintain, and enforce a corporate travel policy that reduces liabilities, defines price expectations, clarifies and defines procedures, delivers useful information and direction, and embraces employees’ needs.
to buy any one product from a single source, you’ll inspire greater respect for other cost-saving initiatives as well. What’s in this for You? As co-founder and president of a highly successful travel management company and an industry spokesperson, I’ve transformed travel for hundreds of diverse organizations with a wide variety of travel management needs—fast growing technology companies, trade associations and non-profits, federal government contractors, and even U.S. Presidential campaigns. Although each type of organization has different needs and challenges, I’ve found commonalities in our successes, and I can share them with you to drive results quickly and easily. My desire is to start you down the path of travel leadership that helps make your organization stronger and more effective. Read on and prepare to take off!
SUCCESS STORY A few years ago, I developed a travel management ecosystem for the U.S. Chamber of Commerce. In less than nine months, their travel and entertainment budget was reduced by $132 per ticket, resulting in a line-item reduction of $224,400 per year. The new program: reduced hotel and car rental costs by 10% created preferred supplier relationships that resulted in thousands of dollars worth of discounts and amenities annually increased staff productivity. traveler satisfaction improved, and employee compliance with the selected booking system reached 100%. (This system allows the staff to call in or book on-line and receive full support 24/7 while they monitor spending and ensure policy adherence.) In the subsequent years, this travel management ecosystem has become part of the Chamber’s culture, and the successes of those initial months have continued and grown.
Now that you’ve begun to consider how travel management can be beneficial, it’s time to assess two specific areas: your organization, and its travel opportunity universe. When companies approach me for help with their travel problems, rarely do they fully understand their needs, and have a less than clear picture of what is available in the marketplace. Without this understanding, you cannot secure the right partners and solutions. KNOW THYSELF
Survey Your Travel Squad Gather current information about your present travel status by developing a travel focus group. This hand-selected “travel squad” of employees should represent different aspects of travel activity within your organization: frequent travelers, top executives (especially the kingpins who can drive commitment to your efforts), travel arrangers, members of the finance department, etc. This squad can help develop policies, select suppliers, and gain support for the program into the future, too What to Ask Service:
Regarding travel, what would you change or would you like to see happen that would make the travel process more effective for you?
Through what sources do you purchase and manage travel and why?
Are your employees aware of the organization’s travel policy and who your preferred suppliers are?
How do you rate your different sources? (If there are multiple ways employees arrange travel, get a rating on each.) 0 being the worst and 10 being the best and why?
Do you feel confident that you are getting the best fares? What prices do you feel good or bad about, and why?
Are the current travel policies at our organization clear and fair? What would you change?
How easy or difficult is the process for booking travel?
Can employees change their travel plans easily?
Is your travel management process supported by responsive professionals who provide productive relationships and services?
Are complaints or problems investigated and solved?
What would you do in case of personal, world, or business emergency?
From an operational standpoint, what works and what doesn’t work regarding travel?
How do you pay for travel, and with what processes? What works and what does not work regarding travel payment and billing systems?
What liabilities exist in your present system? How does your legal team feel about your travel policy and program?
What insurance products do you offer to your travelers? Have you told them what insurance to select based on this information and from which suppliers (for example, when they rent a car)? What coverage do you get from your credit cards?
compare rates, or what systems and procedures they could use to better manage travel costs. Following are just a few of the key issues to investigate, plus some of the organizations that may help. Benchmark Your Results Understanding how your average ticket costs compare in the marketplace may show you where you need to improve. Several services provide free travel statistics online and offer customized help at reasonable costs. The following are a few of the best. (For their websites, see the list of resources in the appendices.)
Topaz International publishes free data on its website to give you an initial idea about the results of your present TMC. They also provide customized assessments for a fee.
American Express Consulting Services and Runzheimer International both provide, for a fee, an accurate assessment, based on customized data for the exact city pairs you fly and other critical parameters.
Your TMC may be able to provide some complimentary or low-cost data.
The National Business Travel Association can provide additional direction and access to resources.
airlines, car rentals, hotels, rail lines, etc. The largest among them are Sabre, Galileo, and Worldspan.
THE HISTORY OF GDSs The GDSs were developed in the 1960s by the airlines themselves to more quickly distribute their fares and itineraries; later these systems were mostly disassociated from the airlines for various reasons, partly to aggregate different fares in a more unbiased fashion. For example, Sabre was used by American Airlines exclusively until 1976, when it was introduced to the travel agency community.
Because airlines and other suppliers pay the GDSs to display their products, increasing price pressure and the introduction of low-cost carriers make it difficult for today’s GDSs to display all suppliers and all available rates. Therefore, offerings by many TMCs and online travel sites are incomplete in one way or another. These days knowing exactly what isn’t included (flights, rates, etc.) in your preferred TMC’s online and call-in offerings and consumer travel sites is more important that ever. In addition to GDS, the following are the major types of ratesearch technologies in the market place that either are based on GDS data or enhance GDS data:
consumers, such as Kayak, and tools developed for TMCs, such as BookingBuilder and AgentWare’s Trip Console. The sites developed for TMCs compare the opportunities they find to those secured through an agent’s initial GDS search. The best TMCs use these tols as enhancements for a wider search of opportunities. If savings are a priority, you want one of these tools working for you. Consider which of these options will provide you with this value insurance and ask if your TMC’s system provides the webfare search enhancement. Corporate online reservation tools are what TMCs use to provide customized online travel procurement to corporate customers. These systems look and operate like public online travel sites, yet they are fully supported by TMCs, and many are enhanced with site-search technology tools. They create that crucial balance—between what the traveler wants and what the company wants—by enforcing travel policies, retaining the look and feel of the company’s website, and presenting a wealth of information to assist with travel purchase decisions (such as online ticket exchanges, aircraft descriptions with seat maps, driving directions to hotels, arrival and departure information, and more). GetThere, ResX, and Cliqbook are among the largest of these tools in the travel marketplace. The support and customization options for these sites and services are as extensive as those provided by your TMC (ranging from local support to global reservation centers and no-touch to touched reservations – see tip below). However, not every TMC has the team and experience to make these systems work. Ask the right questions to ensure you’re getting the right tools and solutions.
TIP: Touched vs. No-Touch Online Reservations. What makes a reservation touched? In most cases it involves any action that requires the online reservation to be acted upon before it is automatically issued. Examples include the ability to hold a reservation, ensure authorization, check webfares, or administer any special request. Are these important to you?
THE BOTTOM LINE The bottom line on rate-search technology is that travelers are often dependent on biased and imperfect systems for their rates.. Whatever travel company or search tool you use to book travel, you should understand its limitations and its opportunities, including:
which rate search systems your current TMC or online travel company is using and what rates and airlines are excluded from those systems, and what you want to do about that. what are those systems’ service limitations and opportunities (customer service, systems development, reporting, international, VIP, multi-leg expertise etc.). what components of a touched reservation may be important to your organization and travelers.
Consider other rate search systems and service plans that might help you reach your cost savings or efficiency goals better and how to access them if they’re unavailable through your current TMC or online travel company.
systems that are web-based, allowing you to access hundreds of reports around the clock. These systems accept reconciled travel data via a secure Internet connection and make it immediately available for real time reporting from the web 24/7, with the ability to capture both pre- and post-purchase information. Consider your organization’s needs and then list what data and capabilities you want from a TMC, such as:
Flexible Data: Information formatted by your TMC so that it can merge into your data management system.
Matched Data: Information that can be matched with your credit card company’s data so you can reconcile your credit card bill with ticket data issued by the TMC for that period.
Enhanced Data: Special information such as budget or project codes or the lowest fare offered to an employee compared to what the employee selected.
Quality-Control Technologies Quality control (QC) technologies ensure three things:
quality and value assurance, and
These systems ensure policy compliance by checking that the data entered with every reservation is accurate, compliant, and properly authorized. (This can include inserting project or customer codes, and regulation verifications or exceptions.) QC technologies also monitor access to fares and seat-assignments that weren’t available when the reservations were booked but might be available later. They may also help finish a trip that requires special services, such as limo reservations, hotel upgrades, the use of frequent flyer miles, and other special services.
THE BOTTOM LINE The bottom line for data-collection and QC technology is the same as for rate-search technologies: You need to know if the company you’re working with offers what you need. Consider service and customization especially—how important are these key components in your overall travel management program?
The Right People behind the Right Technology While comparing technologies, it is easy to get lost in a thicket of detail. To find your way out, focus on something that’s more important than what technology can do for you— focus on how well that technology is supported by the right people. For example, the overall success of your travel-booking program has little to do with whether you chose GetThere or ResX or Cliqbook. A greater influence is the competence, creativity, wisdom, and dedication of the TMC’s staff who support that technology. Technology that will do everything you need is actually harmful if it’s mishandled, so don’t just compare technologies, compare the teams who implement them. Ask about the experience of your TMC’s technology staff and the availability of support, and talk to their clients who have similar-sized travel budget.
CHAPTER 2: FLIGHT PLAN DEVELOPING YOUR ACTION ITEMS It’s now time to create your project “flight plan” for the travel transformation that’s right for your organization. As this chapter guides you through the important components, refer to my Flight Plan Worksheet in the appendices. The Travel Management Ecosystem™ Over the years I’ve developed a graphic depiction of all the key elements of a successful travel management program. I call this the Travel Management Ecosystem™, and I suggest you use it to identify your needs in each one of a flight plan’s key areas. As I discuss them, note the action items you would like to take to ensure that your plan works synchronously as an ecosystem. Quite frankly, one of the key benefits of working with a quality TMC is Strategic or Program Leadership. These key elements of the Travel Management Ecosystems should be understood, managed, and evolved by a quality Account Manager at your TMC.
Policy Setting a clear travel policy and enforcing it consistently are the most important steps you can take to reduce travel costs, according to American Express Consulting.1 Your travel policy is the engine that powers everything related to your travel management process. Unless your senior staff supports this important document and everyone is 100% clear on its details, you’ll be wasting time and money and might even create liabilities. Your travel policy needs to direct employees in the following three areas. Control
Authorizations: Address when they are needed, how to acquire them, which forms are necessary, and how to make it fast, simple and paperless.
Procedures: Specify which to follow for accounting, safety, reimbursement processes, transaction coding, etc., and which payment systems to use.
Supplier commitments: Determine and articulate your commitment to preferred airlines, hotels, and car rental firms. Communicate how you want travelers to make their travel plans (through the TMC only, for example), with whom, and why.
Management input: Be sure to get input on the policy components from departments such as human resources, legal, finance, and management.
Alignment with corporate culture: The tone of the policy should reflect your defined balance between employee travel needs (cash advances, comfortable flights, quality support, etc.) and the organization’s needs (lowest logical
airfare guides, hotel and car value, documentation, etc.). The travel policy should support the organization’s culture.
Explanations: Include why some of these policies are the way they are so employees will buy in to them.
Helpful hints: Include direction on travel procurement and travel itself to make it easier, faster, and safer.
Benefits: Be sure to clarify the benefits to all for this program to include a respect for the hassle that travel can be.
Allowable expenses: Determine what will be reimbursed for business travel items such as tips, meal costs, alcohol, dry cleaning, speeding tickets, improved seat assignments, spouse travel, etc. Determine how travel spend complies with contract or regulation clauses.
Spending thresholds: Guide travelers to the right buying decisions on spending limits for all components of a trip. (The price section of this chapter provides additional guidance on thresholds.)
Hierarchies: Make different value decisions for various levels of management in the organization, such as who is allowed to fly first-class and who may expense out entertainment charges when they involve clients.
For further guidance, turn to the attached worksheets for a detailed travel policy checklist. 20-MINUTE COMMITMENT Your policy needs to be comprehensive but not overwhelming so that employees will read it and refer to it in need. A rule of thumb is that employees should be able to read it in less than 20 minutes.2
Preferreds Preferred suppliers are companies with whom you have special relationships for air, hotel, car rental/ground transportation, travel management, and payment. If you agree to do a certain amount of business with them, they’ll often provide you with a special service and pricing package. According to the National Business Travelers Association, “by taking advantage of supplier discounts, a managed travel program pays for itself through cost avoidance and negotiated revenue streams (rebates, incentive payments, etc.).”3 ASK YOURSELF What does the lowest price mean at our organization? Is it the lowest price non-stop flight or the lowest price out of your preferred airport? Does your preferred airline play into this decision? What other criteria contribute to your lowest price definition? How could misinterpretations be affecting your bottom line? Define this well and save 10 to 20%. Even if your organization is small or mid-sized and you think you don’t have much power for leverage, you can negotiate agreements. All it takes is organization.
The key to leveraging the best opportunities with preferred suppliers is to: 1. Know your potential with each supplier (Do so by first estimating your volume, number of transactions, room nights, rental days, etc.). 2. Control what your employees purchase and how (these suppliers want more than just some of your business, so they need to know you can deliver). 3. Know what is out there (That is, know what’s available directly from the suppliers and/or from your potential TMC). 4. Go for win-win relationships and good track records with suppliers to deliver long-term results. (In the next chapter I talk about the different kinds of agreements you can make with your preferreds and how to negotiate with them.) This is where consolidating all your business through a TMC helps tremendously: They will have your data handy, they’ll know what’s possible, they already have supplier relationships, and they can open up opportunities for you. Who are your top preferreds? Work with your TMC to secure profitable programs, and define how and when they are implemented and maximized.
SUCCESS STORY The Fly America Act requires government contractors to fly on U.S. carriers under most circumstances when they conduct business in support of a government contract. Therefore, any organization with such a contract needs a customized travel policy that complies with the government’s travel regulations. When a government contractor partnered with my TMC, we developed a system that not only delivered a compliant itinerary but also documented and verified compliance. If there are any questionable portions, it provided an explanation for why a nonAmerican carrier was required and how this change follows the rules of the government’s travel policy. The contractor is able to keep this data as long as necessary in case of a government audit. Policies and procedures that are clearly defined, implemented, and tracked are critical for an organization to reach its overall travel management objective. Define the requirements and seek solutions Procedures When drafting your travel procedures, ask for contributions from various department heads (such as HR, legal, finance, or sales). Overall, travel management procedures fall into three categories: accounting, authorizations, and reservations. Accounting: How expense reports should be filed, data and reporting requirements (project codes), etc. Authorizations: What is and isn’t reimbursable, price thresholds over which authorizations are required, who authorizes tickets, what data is required (such as the lowest available fare offered verses the lowest fare requested), how changes are authorized and at what cost. Compliance: With federal laws for publicly traded companies or ones with government contracts…
Reservations: Who to use to book travel, how changes are facilitated, what should be done with cancelled or unused nonrefundable tickets, etc. PROCEDURES FOR PUBLICLY TRADED COMPANIES: SARBANES-OXLEY If your organization is public, your travel policies must meet the requirements of the Sarbanes-Oxley Act of 2002. This act aims to prevent reporting abuses by requiring CEOs and CFOs personally to sign financial statements. The data below is our interpretation of some of the act’s requirements related to travel.
Review your travel policy annually.
Mandate use of a corporate charge card for all business travel and entertainment expenses.
Review specific policies regarding advances, use of corporate cards and vehicles, and reimbursement of personal travel costs.
Review booking systems policy/enforcement compliance.
Review data-reporting capabilities to include pre-trip reporting for risk management.
Review reporting structure, controls, and procedures with your internal and external audit staff.
ASK YOURSELF What procedures are critical to reaching our organization’s goals and my goals for travel management? What people on my team have a need for certain procedures? What are these procedures and do they meet our goals? What procedures are missing that would help us save money, increase productivity, reduce liabilities, and enforce control? What will my TMC need to ensure policy compliance? What parts of our travel spend still are not being leveraged or managed? Board travel? Meetings? Special projects?
Protection Just as bad things happen at home and at work, bad things can happen on the road: Travelers miss planes, have heart attacks, get arrested, are inconvenienced by weather and strikes, get sick, are grounded due to national emergencies, forget their documentation, lose access to communication, and on and on. It’s true that nearly every organization has improved its emergency plans since 9/11, but most plans cover employees in the office, not the ones on the road. A sound travel management plan—for all employees— should be in place before emergencies happen, providing total protection in the form of:
Emergency and protective policies and procedures.
Lists of the sites and suppliers travelers should use for useful information and direction.
Policies that help avoid fraud and protect data confidentiality. Most if not all consumer sites require travelers to click on “I agree” to terms and conditions you may not be comfortable with.
Insurance products that cover travelers on the road (and directions for how to secure them—some credit card programs and most TMC’s offer them automatically, for example).
Insurance is an excellent way to protect against emergencies; your travel policy should clearly address such issues as whether you require car renters to obtain collision damage waivers and what to do in the case of an accident. It should discuss medical issues on the road and any approved enhanced insurance coverage (such as baggage insurance that covers travelers from when they leave home to when they come back, additional medical or evacuation coverage, etc.). For all protection issues, state what you will and will not pay for and make sure your kingpins are on board with these decisions. Tip: Develop Emergency Plans Before It’s Too Late. A travel manager I recently spoke with must address supplemental insurance policies and evacuation plans regularly for his travelers. Serious occurrences—such as food poisonings and having a traveler’s feet run over by a car where there was no quality medical care—have reminded him and his company that they must have emergency plans and policies in place before emergencies happen.
ASK YOURSELF What would our lawyers say about our present ability to gain access to the schedules of all traveling employees in case of a national emergency, major strike, global security threat, natural disaster, etc.? Do my people know what to do if they get hurt or caught in a difficult situation on the road?
Air Fare Types Standard wisdom may say that finding the lowest air fare is just a click away. The reality is that today there are more fares on more airlines with more fare rules than ever before in our lifetime. These include:
Published rates (published by airlines and distributed through GDSs)
Your TMC’s and your preferred suppliers’ rates (your own special deals)
Tour operator and consolidator rates (available through companies with special contracts)
Opaque rates (you bid for these on sites such as Priceline.com)
I recently checked the fare display for a flight from Chicago to Los Angeles and found that there were more than 140 fares in that market across all airlines, and that doesn’t even include some lowcost carriers, consolidators, tour operators, or fares that may be broken in a connecting city. Instead of asking travelers to choose among all the available rate types, consider asking a TMC to uncover the best rate for you. These fares change every second and with the quantity of fares and the quantity of changes made every minute, it is easy to understand why a group of people making arrangements on the same day could secure different prices.
Tip: Could it Be That TMCs Outperform Internet Travel Sites? A Topaz International audit revealed that today’s TMCs found business travel fares that average $56 less per itinerary than what Internet travel sites offered for the same itinerary. (Internet sites used in the study include Travelocity, Expedia, Orbitz, and various airline-direct websites.)*Mail me your flight plan, and I will send you a travel policy template that I have used successfully for 15 years to guide organizations of all sizes. Send your own plan to me at [email protected]
Hotel and Car Rental Rates Also available are a multitude of hotel and car rental rates, web rates, corporate rates, leisure rates (meant for vacation travelers), affiliate rates (AAA, AARP, American Express, etc.), prepaid rates (newest rates on the market that are non-refundable ). Be aware of these types of rates. Setting Thresholds Clarifying your organization’s expectations on price to your TMC and to travelers is the number one way you can save money. Key price threshold considerations include:
At what savings thresholds should a traveler select a lowcost carrier, a connection, or even an alternate airport (for example, at what savings threshold should a traveler be encouraged to fly out of Baltimore/Washington versus Reagan National, or Oakland versus San Francisco)? At what price-point should the traveler select a connecting flight (for example, if it saves the organization $100 or more, $200 or more, $500 or more)?
What hotel brand level should travelers select (The RitzCarlton, Marriott, Days Inn)?
would I? My accountant saves me the time, and—more importantly—his skill and expertise allow me to concentrate on my area of expertise. I apply the same reasoning when I choose a professional travel management firm.” Visiting four or more web sites to find the lowest fare takes even the savviest of Internet users fifteen minutes per site, and that is just to look and book. What about the increased time it takes to change reservations, process expenses, or follow up on post-trip problems? Time equals money, and great travel management saves you both. Make sure your plan addresses, explains, and delivers benefits that increase productivity in the entire trip workflow.
How long does it take to manage these items in your current system?
ASK YOURSELF Is my travel services package increasing my staff’s productivity? Is it the right service package at the right price point for all types of needs and travelers? What parts of travel management do I want to outsource? (Finding quality employees is harder and harder these days, and whenever I can outsource a function to professionals – thus allowing my employees to do what is expected of them – I do. Is this your philosophy?)
Profiles To maximize your ecosystem’s performance, your TMC must have on hand all critical data about your organization’s travel needs and policies as well as your employees’ travel preferences.
TIME = MONEY A recent study reveals that almost half of employees surveyed are researching and booking their travel on their own utilizing an average of 4.2 different websites for business travel.4 Whenever one of the “amateur travel agents” on your staff makes a bad buying decision or a mistake, you pay for it.
The Organization’s Needs Key elements of your organization’s travel management ecosystem should be summarized and detailed in your TMC’s computer reservation system so that all TMC employees recognize, implement, and respect your organization’s desires. If you choose to utilize the TMC’s online reservation tool, your organization’s data should be programmed into this technology as well. The Travelers’ Preferences With clear and updated individual profiles in your TMC’s computers, your travelers will get excellent service 24/7 (regardless of the agent or system they use within the TMC) and compliance with their preferences (frequent flyer miles, meal and seat requests, etc.). Also, your TMC will have concise contact information in case of emergency or flight changes. Consider ease of use, too. Travelers who use multiple travel sites have shared with me the complexity of managing their profile
data across multiple travel web vendors. Are you willing to be your own travel advocate when you’re faced with flight delays or cancellations?
ASK YOURSELF Is our TMC and/or other reservation services clear about our expectations and the expectations of our team? Are all of our road warriors well-profiled with our TMC?
People Selling a new travel management system to your organization’s management and staff takes support and service. Consider what levels of relationships, service expertise, and experience you expect for different levels of travelers and in different situations. What kind of relationships with your TMC and your preferred suppliers will make your travel plan a success? What types of support will you require for reservations, systems development, reporting, an online tool (creation and training, customer service, etc.)? For example, in today’s travel world you have access to:
dedicated, local travel consultants and support teams for a close, productive relationship when you need it
regional operations and reservations centers (that are less personal), and
national or even global operation and reservation centers (these may be cost effective but their weakness is their ability to offer regional knowledge and relationships).
ASK YOURSELF What type of support will I need to make my program successful, and in what areas will I need it? Do we want local contacts for any or all of our service packages? What value would this bring? How important is it that certain support people are assigned to our team that we can talk to at any time?
ASK YOURSELF What works with our current payment system for travel and what are its limitations? What would I like from a payment system? Does our card provide proper insurance coverage for traveling employees? Are some people not using the card and therefore making the task of securing travel data and processing travel more time-consuming and risky? Are they amassing loyalty points on their personal accounts and thus making decisions outside of policy while opening up liability? Possibilities When you’re thinking about how travel can help your organization reach all of its goals, what alternative ideas should you consider? For example:
Could employees use the services of your TMC or related suppliers at a discount for personal use? If so, would offering these benefits help sell the overall travel program?
Would leveraging the volume of both business travel and meetings travel together make for bigger savings?
Could air freight policies be built into your plan for more savings opportunities?
Could you leverage the buying power of your customers or meeting attendees to reduce your own travel budget?
Could you take on group travel projects with the support of the right travel partner? Projects, incentives, etc.
The possibilities are endless when you begin to gain control.
Chapter 3: Flight Crew AN INSIDER’S VIEW ON HOW TO SELECT THE BEST TMCS AND SUPPLIER PARTNERS You’ve got your data and your plan—now you need your crew to put the plan into action. The outside companies with whom you’ll work to make your travel plan come alive fall into three categories:
Travel management companies/travel agencies who will perform certain travel management tasks for you
Travel suppliers with whom you’ll negotiate to secure better values (airlines, hotels, etc.)
Technology providers to help you reach your goals.
If you’ve followed this book so far you are well ahead of most organizations looking to receive better results from their travel management systems, because you have what you need to negotiate the best values and partnerships. For example, as the president of a TMC I know that I’m able to offer my best prices and results to organizations that have done their homework and have control of what they spend and how. NEGOTIATING WITH TMCs Tip 1: Know what you are looking for and develop a thorough and consistent RFP (request for proposal). You’ve already gathered the key components for an RFP that will reveal your travel needs to potential travel management companies:
What type of TMC do you need?
Your travel spending data (which you’ve collected with tips from Chapter 1)
Additional services that are absolute minimum requirements for you (such as wanting local contacts, ticket delivery, on-site consultant, a 24/7 mechanism to handle reservations, etc.)
Be sure your RFPs articulate what you need done and what you spend in as much detail as possible. Also request a consistent format for the responses so you can compare bids in an apples-toapples fashion.
RFP RESOURCE I understand that it can be frustrating to develop an RFP. Download a copy of my suggested format at www.macnairtravel.com/news_and_tools/travel_leadership or become a member of the National Business Travel Associations whose library contains many forms.
least, you will leave this conversation with clarity and the feeling that you have given them their fair shot. If you can improve your relationship with your current TMC significantly then consider doing so, because making a change can be costly. However, if you decide to hire a new TMC and you still have a valid contract with your current TMC, you need to understand your departure/termination clauses. Tip 4: Understand what kind of TMCs are in the marketplace and what’s right for you. What are the different types of travel companies? When people hear the term “travel agency,” they think of the mom-andpop agencies around the corner that we relied on for travel help before the Internet (and some organizations still do). In reality, all companies that supply travel fulfillment services are travel agencies, from the brick-and-mortar stores, to online travel sites (such as Orbitz and Travelocity), to large travel management companies, to variations of them all. Each type and size of TMC has strengths and weaknesses. If one is too big for you, you may get lost among the other clients, and if it’s too small, it may not be able to evolve and support you. Ascertain which options are right for you based on your flight plan and travel spend. Here are a few places to find TMCs that may be right for you (their websites are in the appendices):
National Business Travel Association (NBTA)
The American Society of Travel Agents (ASTA)
Networking (local companies your size often make good suggestions)
Suppliers (local airline representatives and other suppliers often know who is qualified and reputable)
Tip 5: Understand fee types and inclusions. Every TMC charges fees differently, which makes a direct comparison sometimes quite difficult. TMCs also often use different terms: A trip may be defined as a transaction or a reservation or inclusions maybe defined differently. Be sure to understand at least all the fees charged for your various requirements and what is and is not included in each fee. Following are some services that TMCs charge for—ask about them and be sure you understand them.
Different fees for full service (call-in) domestic reservations or transactions versus fees for international reservations; surcharges for reservations that include multiple flights
Fees per ticket and/or trip or per reservation, with and without changes after the reservation was made
Setup or initiation costs and/or annual fees
Online reservation fees, domestic and international, touched and untouched
Fees for calling in changes to online reservations
After-hours reservation surcharges
Fees for hotel only and/or car rental only reservations or as add-ons to an existing airline reservation
Fees for exchanging a previously cancelled ticket for a newly booked trip or for voiding a refundable ticket that you won’t use to secure a full refund
Surcharge or reservation fees for using your preferred supplier agreements
Fees to seek authorization from travelers for out-of-policy reservations or collect billing codes
Costs related to develop or deliver reports and research
Fees for special services like visas, restaurant reservations, maps and directions, processing frequent flyer tickets or
special service configurations (such as an onsite agent, supporting an agent you hire, etc.). THE BOTTOM LINE The bottom line is that you need to know exactly what your fees are and what they include. Remember, though, that they make up just a small percentage of your overall travel costs and that you get what you pay for.
Tip 6: Each TMC offers different deals and has access to different suppliers. Discover each TMC’s key deals or relationships with travel suppliers and what suppliers they don’t work with, and then decide if what they offer matches your needs. Especially consider what technologies they use and how those may affect the offerings you receive. Many large TMCs are part of buying groups or consortia that improve their offerings; for example my TMC belongs to the American Express consortium, and many of our deals come from this relationship. Tip 7: Expand your view of potential opportunities (such as your meetings needs)to include in your TMC’s RFP to get a better deal. Include meeting management services, attendee and committee travel, and other opportunities that may benefit your TMC in your flight plan or RFP, and communicate this opportunity to potential bidders. They may be able to help you, and you may be able to get a better overall deal from them.
NEGOTIATING WITH TRAVEL SUPPLIERS Tip 1: Even small and mid-sized companies can get benefits. Preferred supplier programs—for airfare, hotels, car rentals, and credit cards—are available to a wide range of organizations. Agreements with suppliers typically fall into one of three types:
Corporate affinity programs (they provide benefits to smaller businesses based on the volume provided to that supplier),
Corporate volume agreements (these are discounts or backend cash payouts based on volume), and
Meeting agreements (these are discounts to events with 100 or more employees traveling to that one locale).
A good example of a program geared toward small organizations is United Airlines’ free Perks Plus program, which provides organizations with points for the business provided to them. These points can be used for items such as free flight certificates, seat upgrades, and VIP Club memberships. It works in harmony with an individual’s mileage plus program so no employee loses any opportunities or feels tempted to book travel with suppliers other than the organization’s preferreds. The Hertz Business Account Program is also free to join and offers such benefits as low rates, special discounts, #1 Gold Club memberships, complimentary insurance, and free rental days. You qualify even if your organization employs fewer than 100 people, as long as you rent cars at least five times per year. Work with your TMC to ensure you’re implementing the most beneficial programs for your organization. Each supplier will provide you with a coding system that your TMC will track and manage to ensure maximum results.
NEARLY EVERYONE CAN NEGOTIATE AGREEMENTS “Over 90% of NBTA members [many of the largest corporate travel buyers in the country] have negotiated agreements with one or more air carriers, and over 87% of NBTA member companies have sought to negotiate with major airlines as a means to address rising airfares.”5 Take your travel budget to market and see what you can secure.
Tip 2: Find your most frequently used hotels and ask for a discount. Hotel rates can be high, yet managing this cost is often simply forgotten. If your organization routinely books a significant number of room nights in one city, you may be able to negotiate directly with hotels. However, reaching agreements nationally is more difficult without a very significant volume of hotel room bookings. (I believe this is due to most hotel brands being owned by hundreds of tenant owners or ownership groups, so it’s harder for them to commit to deals, unlike airlines that are owned by single entities.) The National Business Travel Association reports that hotel negotiations may be tighter for travel managers in the future, but that “does not mean an empty table.”6 You can negotiate for discount rates and soft dollar considerations such as room amenities, free Internet access, upgrades, last room availability, and breakfast. Understand what deals your TMC has and start negotiations from that point. Also consider partnering with fewer preferred hotels to maximize your leverage, and ask about prepaid nonrefundable rates that have recently entered the marketplace. Your TMC should introduce you to the universe of opportunities for you to consider.
Tip 3: It’s easy to broker agreements with car rental agencies. Like hotels, car rental companies may not significantly lower your rates unless your volume is large. However, you can deal with them in other ways. Your TMC may be able to provide special rates from car companies, and many car companies will offer other value-added benefits to you directly if you channel a majority (or all) of your business through them—no matter your volume. For example, you can garner such benefits as free insurance, VIP membership for travelers, and upgrades. As your volume increases and you create a track record, you can negotiate for increasingly significant discounts. Some car rental agencies combine their deals with airline points—you can earn points with one company while enjoying rewards from the other. Tip 4: Credit card companies can make deals too. Depending on your company’s total volume of transactions/dollars for travel (and even non-travel items) charged on a credit card, you may be able to negotiate annual deals with your organization’s credit card company for the use of the card, higher credit limits, frequent-flyer style benefits related to card use, lower annual card fees, and more. Using your points to their maximum potential can also dramatically reduce your travel budget. Do you have a system in place for this effort? If you don’t manage your credit card company relationship, be very careful. If your team uses their own cards they could be reducing the above benefits to the company in exchange for improved benefits for themselves. In the process, they’re also sidestepping insurance protection and increasing expense reportprocessing time.
MANAGE YOUR CREDIT CARD ACCOUNT If you do only one thing as a result of reading this book, I recommend you mandate consolidation of travel and entertainment expenses on the organization’s credit card account to ensure you have control of your data! This is a key tenet of Sarbanes-Oxley laws introduced for publicly traded companies, and it’s a sound business practice. Tip 5: Leverage your meeting volume with your travel volume to get better deals. If you combine your organization’s meetings department volume with the overall volume in transient business travel to leverage your buying power, you should be able to negotiate a significant deal for the transient travelers and an even better deal for the meetings. Many airlines offer meetings’ discounts for meetings’ attendees whether they are paid for by your organization or not. Attendees get a discount and the organization receives one free ticket for every 30 or 40 or so that are booked. Leverage them and save! THE BOTTOM LINE The bottom line for negotiating TMC arrangements and supplier deals is to know how much you spend on each element of travel and to be able to show that you can control that spending, think win-win, get creative if you get no for an answer, and work hard to deliver.
excitement and creativity (maybe even develop a theme), your program will be readily adopted. Draw prizes for compliance, host lunches, have departments compete for adoption, and send out regular communiqués that include success stories. Step 5: Be prepared to handle objections. Changing habits isn’t something humans do well, so some employees will resist your effort. Adding to this phenomenon is the fact that travel tends to be very personal, and many individuals prefer to make all their own judgment calls on what they feel is the right use of the organization’s funds and their time. If, for example, a traveler claims he can do better on price than your TMC, make sure he tells you at the moment he finds the low fare. Then, immediately report his exact data to your TMC so they can determine the real facts. Step 6: Measure the plan’s success. Compare the plan’s results against your original objectives, using the data you gathered to create it. Adjust accordingly. Ongoing Communication Throughout this process (until it’s a habit) make sure you explain to all individuals involved what’s in it for them and for the company. Openly discuss why the travel program has changed and what the overall goals are. Much of the data you can use is in this book, and you can supplement it with help from your TMC. They too sell successful travel management as part of their business. Use their wisdom. Once your organization begins implementing the new travel management plan, people will form new habits to support it within 90 to 120 days. Throughout that time and beyond, continue to ensure compliance with internal legal and HR directives by keeping these entities involved in the program so that all future employees are given proper directives when they come on board.
DON’T GET OVERWHELMED I know this looks like a lot of work. However, a good TMC with excellent customer support personnel will do the heavy lifting for you and can even make all of these steps happen automatically. It’s important mostly that you know what to expect.
Continue ongoing communication throughout the organization by distributing notices about success stories and changes to the travel world that may affect employees, such as strikes, global events, preferred supplier agreements that have changed, new policies, etc. (Your TMC will likely provide this data). Maintain ongoing learning to help the plan and your people evolve. Frequent communication should come from your suppliers too—they need to keep you informed of key opportunities and issues in communiqués that you redistribute to your staff. They should stand with you to handle objections, answer questions, and change plan components that don’t quite work. Communication for Emergencies As I’ve discussed previously, emergencies do happen on the road—such as natural disasters, terrorist attacks, and travelers’ health problems. A crucial part of your organization’s travel management program must be communicating emergency plans to travelers before the worst occurs. Make sure you know exactly what your TMC can provide to you in emergencies regarding systems, data backup, and procedures. What are their emergency staffing plans in these situations?
Travel Links Communicate to travelers the necessity of being safe on the road, both domestically and internationally. The following resources can help direct employees’ attention to timely warnings, suggestions, and requirements for dangerous travel circumstances (their websites are listed in the Resources section of the appendices). International Travel Sites The U.S. State Department provides:
passport and visa information,
new international travel requirements, and
updated travel warnings for specific countries and regions.
The Centers for Disease Control (CDC) provides:
health information for specific destinations,
vaccination recommendations for travelers of all ages and yellow fever vaccination recommendations by country, and
an abundance -of information on international travel topics such as warnings and procedures for illness and injury abroad, safe food and water instructions, and even guidelines for traveling with pets.
International SOS provides medical assistance, international healthcare, security services and outsourced customer care.
Intelliguide Professional provides travel security and destination information collection, analysis, and dissemination.
A Note on Confidentiality Travelers and their organizations are universally concerned about the confidentiality of their data. They want to protect their company credit card numbers, and they want to limit who knows where their people are and what they’re buying and spending. The more often your employees book travel from a variety of sources, TMCs and online sites, the more the organization’s data is exposed. Furthermore, the moment you make a reservation, you’re passing on payment and travel information to many suppliers (credit card companies, airlines, hotels, etc.). Not one of them guarantees confidentiality. TMCs can promise not to sell your information or spam you themselves, but they can’t help passing your confidential data to others who might, since they need to pass on this information to complete bookings. Data sharing is a difficult situation, and you need to be aware of who has access to your company’s information, how they use it and most importantly, how they will protect it.. THE BOTTOM LINE The bottom line for implementation and communication is to communicate until it is a habit. Be sure your policies and procedures include: An emergency mechanism to support employees 24/7 Guidance on insurance, travel warnings, requirements, and useful tips Direction regarding information privacy and security
Tip: Have a Pro Give Your System A Grade. Consider an independent assessment of the performance of your TMC by a professional third party such as Topaz International (see resources). Use Your Suppliers: Keep in contact with your TMC and suppliers so you know what’s new and what they suggest for your plan as it develops. Most TMCs will automatically provide an annual review with much of this data to its customers. Make sure you like it and are prepared to share your desired changes and any concerns, or appreciate what you have! Make it Automatic: The right technology and proper planning will make these steps automatic so you don’t have to think about them, and voila, they just happen. Soon new employees will understand your system from day one, and eventually no transformation will be required at all. Communicate and Celebrate: Celebrate your success and communicate your weaknesses so you know what to keep working on.
BUILD YOUR KNOWLEDGE To take your understanding of travel management to the next level, consider joining an organization such as the National Business Travel Association, where you can network with other professionals who do this around the clock. You can also subscribe to business journals such as the Business Travel News in either paper format or online. (All websites are listed in the appendices.)
CONCLUSION—ENHANCE YOUR ORGANIZATION’S ACHIEVEMENT THROUGH TRAVEL MANAGEMENT Managing travel expenditures isn’t easy – but we knowit is important. An expense that typically ranks as one of the top three deserves proper “procurement” practices and you have either just learned them or they were reinforced. The lost opportunities and challenges are significant! If you’ve followed or plan to follow the advice in this book, you will have created or improved your travel management ecosystem and achieved a wide variety of benefits, including:
Improved control for this second largest controllable cost, thus reinforcing a culture of cost-containment and reduced liability
Dependable support—including responsiveness, safety, retention, program management …
Better productivity helping people do their jobs better and faster without wasting man power on travel.
When these big-picture transformations begin to take place, they’ll foster other improvements throughout your organization. Because of quality travel management, your company will start operating in a new gear, and you will be seen as a true transformer within your organization. It’s a worthy effort, and there are companies and suppliers that can help you achieve your goal.
APPENDICES: TOOLS TO HELP YOU PROGRESS Appendix I: Worksheets Several practical worksheets were referred to throughout this book to help you at various stages of creating your travel plan. Following are snapshots of these forms. Visit www.macnairtravel.com/news_and_tools/travel_leadership to download and print the full versions, and continue to refer to them as you evaluate and revise your plan year by year.
Appendix II: Resources MacNair Travel Management is both a travel management company and a consulting firm. We would be excited to guide you through the process of creating your travel management plan in either capacity - or both. Below is a recap of the great used resources for direction, education, and support in this book.;
American Express Consulting: http://corp.americanexpress.com/gcs/travel/us
American Society of Travel Agents: www.astanet.com
Business Travel News (BTN): www.btnonline.com
Centers for Disease Control (CDC): www.cdc.gov/travel/
Intelliguide Professional: www.intelliguide.com
International SOS: www.internationalsos.com
Meeting Professionals International (MPI): www.mpiweb.org
National Business Travel Association (NBTA): www.nbta.org
Runzheimer International: www.runzheimer.com
Topaz International: www.etopaz.com
U.S. State Department: www.travel.state.gov/travel/travel_1744.html
NBTA (National Business Travelers Association): Represents the interests of corporate travel managers and travel service providers in the U.S. while providing education and networking to its member organizations. Opaque Pricing: Airfares, hotel rates, etc., offered online for which the prices, times, and/or suppliers are hidden from the buyer until the sale is final. Major sites: Hotwire and Priceline. Preferred Suppliers: Travel service providers promoted by organizations for their discounts, loyalty programs, quality, or other considerations. They include airlines, hotels, car rentals, and credit card companies. Profiles: Computer files that TMCs and travel suppliers routinely access in the booking process that contain data on the travel needs and preferences of an organization and its individual travelers. Published Rates: Standard, universal travel rates published by airlines, hotels, and car rental agencies that are accessible through TMCs, online-travel sites, and all other travel-related sources. Quality Control Technologies: Software tools used by TMCs to review (and often complete) reservations prior to ticketing. These robotic programs can add seat assignments, catch continuity errors, insert loyalty program code numbers, ensure that the proper credit card is charged, and much, much more. RFP (Request for Proposal): An invitation for vendors and/or suppliers, through a tender process, to bid on a specific product or service.
Reconciliation Technologies: Software tools used by TMCs to correlate TMC data with that of the client account’s credit card vendor. Typically run monthly, these programs indicate discrepancies in the two databases and track open items, customized data handoff, refunds, and more. ResX: A corporate reservation tool that allows business travelers to make reservations online and be guided by their organization's policies, procedures, and preferreds which are pre-programmed into the system.
GDS. If the agent selects the presented rate, it fills the request at the supplier site and performs other data transfers so that the TMC can support the reservation. Web-based Report Generator: An online tool for corporations seeking to better manage travel information and data. Programs such as iBank accept reconciled travel data via a secure Internet connection and make it immediately available for up-to-the-minute reporting from the web 24/7, with the ability to capture both preand post-purchase information.
The National Business Travel Association (NBTA) is the leading provider of education, research, news, networking, advocacy, and information for more than 2,700 corporate travel managers and suppliers who collectively manage more than $170 billion in business travel expenditures. Members turn to NBTA for a variety of resources to aid them in maneuvering the complexities of the industry, including the launch of a corporate travel department or beginning a career in corporate travel management. NBTA offers a wealth of resources to help you meet these challenges and succeed. Educational programs: These cover various travel management topics and involve the Certified Travel Executive certification. Resources for Travel Managers: Members have access to standardized RFPs for obtaining corporate travel services, plus a variety of white papers on industry topics. Members may also participate on NBTA’s buyers-only interactive Listserv. NBTA International Convention & Exposition: This convention attracts thousands of corporate travel buyers and suppliers and is the industry’s largest annual event. Visit www.nbta.org to take advantage.
industry expert testimony to government entities. He has traveled in advance of U.S. Presidential candidates, overseeing travel and logistics. In his leadership role, MacNair presents timely and engaging quarterly web seminars on travel management and scheduling, and his own unique travel management tools are in the trademark process. His newsletters, also known as InFlight, are read by thousands. When not promoting travel management, Mike is traveling the globe with his family and as an adventurer/athlete. Visit www.macnairtravel.com to take advantage.