When you look closely at your travel expenditure, be it air, hotel or transportation- more than 30% of that expenditure is directly related to meetings and events. Is this part of your travel expenditure being managed? Do you have visibility into the expenditure?
For most organisations, this dilemma is further exacerbated because administrative assistants in departments handle meeting and event related travel on their own, causing leakage in costs and increasing risks that are otherwise managed by the travel department. In fact, 80% of meetings expenditure is unmanaged in organisations. Travel managers can no longer ignore meetings related travel. The expenditure, risk, and duty of care implications are too large for any organisation to ignore.
"The last bastion of unmanaged spend"
Meetings and events are the most visible form of travel expenditure - sales incentive trips, large client conferences, congresses, exhibitions, product launches, the list goes on and on. According to the Aberdeen Group (2012), the average organisation spends approximately 1.1% of its total revenue on meetings and events. As companies come to understand the volume and importance of meetings and events spend, senior executives want visibility and oversight. Travel managers, who successfully implement and manage travel programmes are being asked to accomplish the same for meetings and events. To be able to build a successful meetings programme, we have to first understand the three key areas of concern for all travel managers looking at meeting and event expenditure:
1. Duty of Care
One of the main responsibilities of the travel manager is making sure business travellers are safe and secure, also known as duty of care. No matter the purpose of the trip, it is important to keep in mind that duty of care applies not only to foreign travel, but also local and domestic travel.
According to ITM Procuring Meetings and Events (Feb 2011), 67% of UK office workers travel to at least one meeting per week. With such a high number of employees travelling for business, travel managers must be able to track where each and every one of their travellers are on a particular day. By mandating that all business travel is booked through travel departments, organisations can better track their travellers at a given time, leaving nothing up to chance.
Duty of care is a regulatory requirement in many countries. For example, in the United Kingdom, organisations have to be cognisant of the Corporate Manslaughter and Corporate Homicide Act of 2007 when developing their travel programme and policies. The law creates a means of accountability for deaths caused by very serious employee management failings, which naturally includes business travel.
As a travel manager, there are a lot of forces beyond your control such as natural disasters, virus outbreaks, and political instability. While you do not have power over this these particular acts, you are expected to account for your travellers when these acts do occur. Imagine you have a group of employees travelling to attend a meeting abroad. If a natural disaster (hurricane, tornado, etc.) were to occur in that particular region, would you be able to account for their whereabouts? For many organisations, the simple answer would be "no"- since duty of care is not being followed in the majority of meetings programmes. One sure way to keep track of travellers is to ensure that all travel is being booked and managed within the travel department.
2. Contractual Risks
Business travel, especially related to meetings and events, is an area that often requires contractual agreements between an organisation and hotels, airlines, restaurants, and transportation companies. For example, think about the process of booking a block of rooms for an upcoming event. The contacts include room night commitments, attrition clauses, parking rates, internet access, food and beverage costs, etc. Travel managers are well equipped to review, negotiate, and execute travel-related contracts. Many meeting planners are not equipped to do so. When the contracting process is left up to meeting planners, administrative assistants or the like, there is not only room for added cost but also an increased risk of liability for the organisation as a whole. Such contracts bind the company to non-competitive rates and room blocks that could have been avoided.
Ensuring the travel department manages travel associated with meetings and events allows for considerable cost savings. Travel managers handle sourcing as one of their major job functions, and thus have the skills and experience to tactfully navigate the sourcing process better than the -average employee. For example, travel managers able to reduce attrition costs by leveraging their relationships and volume with their hotel providers. Similar to the contracting process, these advantages lead to better negotiations resulting in increased cost savings for the company.
Additionally, managing meeting and event related travel allows travel managers to leverage the increased volume of room nights across transient and groups to negotiate better rates with hotels. This also includes managing and utilising company cancelled space, keeping these sunk costs from going to waste.
Meetings and events are the most visible form of travel expenditure, yet organisations still lack the visibility and tools needed to get a handle on these activities. Continuing to do so can result in unnecessary spend, high costs, and serious corporate liability and risk when it comes to duty of care. Once travel managers begin to take a holistic approach to managing all facets of corporate travel, the next step in the process can be investigating the meetings and events that are occurring within the company- their process, spend, and general ROI. Look for my next article on building a business case for meetings management- increased productivity, savings, and revenue.