Business Travel Show Europe Kick Off, 23 February,
Global Travel Risk Summit Europe, May 2023,
3rd Annual Sustainable Business Travel Summit
SCOTT GILLESPIE, CEO OF TRAVEL DATA CONSULTANCY T CLARA, has somewhat controversial views when it comes to the benchmarking of air fares. It is “completely pointless, and morally and ethically wrong”, he says. “There is no value in it other than to pander to management, which expects benchmarks to be provided.”
He says the premise of traditional benchmarking is flawed for three reasons. “First, buyers will rarely reveal benchmarks that make the supplier’s pricing look favourable; conversely, TMCs may have reason to make their efforts at managing a client’s spend look successful. Second, it matters not to the supplier what another provider’s pricing is – airlines customise their offer to each buyer. Third, benchmark data is typically old enough not to reflect market conditions.”
He adds: “You have to account for 6-8 empirically, statistically relevant factors before you can conclude whether or not you negotiated an inferior or superior price with an airline, including the distance between city pairs, the point on the fare-ladder that was bought, the number of connections taken, or the ability to move volume to the airline.” He says his firm is beta-testing a tool that can achieve this, and hopes to roll it out early next year.
Gillespie recommends benchmarking the traveller experience, as relentless travel plays a major part in loss of corporate talent.
The figures are compelling: HR professionals calculate that taking into account recruiting costs, and lost time and productivity, the cost of replacing a middle level or senior manager was between 50 and 200 per cent of the position’s annual salary. And Gillespie adds that an organisation is “likely to spend around six figures to send travellers around the world, so these are an organisation’s most valuable employees”.
T Clara recorded more than one million trips undertaken by 150,000 travellers in its database. The research focused on those spending more than 40 nights a year on business away from home. “Data tells us the things that really matter are nights away from home, number of hours in the air and amount of time spent travelling on one’s personal clock – that is, when people are on a plane outside 8am to 6pm, Monday to Friday,” says Gillespie. Two-thirds of hours flown by employees are outside business hours.
The two other stressful factors are travelling at short notice and regularity of travel: people get more frustrated and stressed over short periods of intense travel than over a longer period of more moderate travel. To mitigate this, organisations can create a different travel culture, whereby employees do not schedule meetings on a Monday morning or Friday afternoon, to minimise the need for travel on weekends or starting early on Mondays, and finishing late on Fridays.
“Organisations ought to be asking their road warriors what they want to make their travel more sustainable,” says Gillespie. “How can we keep you travelling at this pace? Or, if we can’t, please tell us so that we don’t burn you out. Can we make your travel healthier, more productive, more convenient?” These could – literally, for a cost-conscious company – prove to be the million-dollar questions.