Keeping costs in check is going to be tricky in a year of hikes and cuts, predicts David Chapple, event director at the Business Travel and Meetings Show, held at Earls Court, London on February 8 and 9.
2011 is already being slated as the year of cost cutting and price hikes. Business travel crystal ball owners are predicting that, this year, budgets will remain tight even though passenger and trip numbers will gently increase. Balancing that is a hard task for business travel buyers at the best of times, but throw in the fact that everywhere you look costs are rising, and rising fast, suddenly it becomes a very unenviable challenge.
In addition to tax rises, increasing hotel rates and fuel prices, airline consolidation and Government cost cutting, a BTMS survey of the corporate travel industry has also found that buyers are worried about additional cost pressures threatened by some airlines through continued unbundling and the introduction of new distribution channels.
Driven by their own desire to cut costs and save money, carriers like American Airlines are planning to bypass TMCs and GDSs with direct connect offerings. By cutting out the middle man they will, of course, make savings. But the big concern is for the rising costs (and increased complexities) that will be passed on to corporate travel buyers as a result.
The Institute of Travel and Meetings (ITM) has already reinforced its belief that it is “imperative that buyers have access to all the content, all the time, in their chosen GDS”. The association has also stated that it feels the industry should be “working towards the streamlining of content access, not creating scenarios which result in increased fragmentation and added complexity for the travel buyer across booking tools, data and payment. Fragmentation creates inefficiency, undermines adherence to our members' corporate policies and destroys the credibility of their travel programmes.”
So what’s a buyer to do when faced with rising costs from all sides? With regards to direct connect, the best solution is to contact your trade associations and support their efforts to speak up on your behalf. A lone voice often goes unheard, and this is where the likes of ITM and NBTA Europe have already shown their worth by presenting a collective argument. And, as they say, strength lies in numbers.
When it comes to higher taxes, airfares and hotel rates, however, unless you’re holding the purse strings to a multi million pound travel budget, the average booker, buyer and arranger has little influence. You do, of course, have a choice over whether to pay the costs – you can always downgrade passengers from business to economy, from five star hotel rooms to four. But that’s probably about as good as it gets when it comes to reigning in direct costs.
Which is why – for what it’s worth – my advice is to stop focusing so much on direct costs and spend more energy identifying and managing the indirect ones. These are, thankfully, infinitely more controllable and slashing indirect costs saves time, which saves money. The smart buyers have been doing this for a while now – introducing better policies and better compliance. But it may also be worth asking yourself how much time it’s taking to book your travel. Could your time be better spent on other things? Could you be booking more efficiently? How arduous is your expenses software? Shouldn’t your sales team be spending time generating revenue rather than rifling through receipts. Do you use self booking tools? TMCs charge lower transaction fees to companies who invest in self booking tools.
At the Business Travel and Meetings Show we have always focused on helping buyers save time and money. It’s our USP. On February 8 and 9 there will be around 200 world-class business travel and meetings suppliers in Earls Court waiting to do business with you. To help you save time and money. There will also be 6,000 like-minded industry professionals there for a spot of informal networking. And there’ll be Europe’s leading corporate travel conference programme, with 26 cutting edge sessions open to you to attend for free. Three that I think you’ll find particularly useful in helping you keep costs in check in 2011 are ‘Unlocking Savings in Unmanaged Direct Travel Costs’, ‘Overcoming the Challenges of Managing Unbundled Fees’ and ‘Controlling Business Travel Costs in the Aftermath of an Economic Downturn – from no spend to smarter spend!’
To register for a free visitor pass and Business Travel & Meetings Show conference sessions, please visit www.businesstravelshow.com