There was a well attended session at the recent Association of Corporate Travel Executives (ACTE) global education conference in Barcelona on potential savings on the T&E budget.
The usual suspects were duly rounded up: wider use of expense management systems, wider use of SBTs, improved compliance, better data to provide better leverage in negotiations.
But there was one area which was not mentioned: the amount companies spend each year on meetings, incentives, conventions and events (MICE.)
Yet savings are available here and can be very significant. Todd Kramer, Carlson Wagonlit Travel's vp events EMEA, estimates that companies can save up to 10%-15% with a well executed MICE policy.
This is serious money. MICE spend amounts to around 1% of a company's revenue, he said. For a Fortune 500 company, this was between $30m and $80m. Ten per cent of $30m is $3m – a substantial saving for any company. (see BTE news story ‘Companies in dark over MICE spend')
Yet there seems to be a marked reluctance for companies to bit this particular bullet. There are many reasons for this.
The most obvious is that MICE spend is different from spend on transient travel.
Whereas the majority of the latter is likely to be spent on air - for some companies this could be around 60% of the transient budget - in the MICE industry, the largest single item is hotels and venues.
This at around 45% is well above air spend (32%). There are not just the overnight rooms for delegates but also the actual meeting rooms plus catering, receptions, IT equipment and any special requirements which are booked for an event.
There is also spend on marketing and publicity if it is an event designed to attract paying delegates and exhibitors.
A second drawback is that organising and booking meetings has an emotional content. There can be much sensitivity over the "ownership" of some bookings which Mr Kramer said could be a "serious impediment" to changing processes.
A PA or secretary might have been in the habit of booking meetings for his or her boss and some of their top customers at a favoured country hotel where after business is concluded, the emphasis is on relaxation in the spa or on the golf course.
Taking away that job or demanding that it be booked at a hotel run by a preferred supplier is not easy and perhaps not wise.
But possibly the two biggest obstacles are that drawing up a MICE policy and implementing it takes a long commitment and that top management backing seems conspicuously lacking.
As Mr Kramer points out, MICE spend is spread over many departments and different budgets. Often companies not only have no policy but, more crucially, no data.
The process of collecting data on MICE spend, analysing it, seeing where it can be controlled and then introducing a new policy complete with preferred suppliers can take years not months.
It also takes delicacy to avoid where possible stepping on sensitive toes.
If savings can me made, these are also likely to take years before full fruition with Mr Kramer saying that if as company spend $40m a year on MICE, you are not likely to get control of all that money, although you might get half.
But the lack of concern at the senior level is also a major worry.
“There is no one at the top saying 'What is going on?' or 'Let's do something about this.' This has not really happened," he said.
Most travel managers know that unless there is full and vocal senior backing, things do not really change.
There is only the shining example of PricewaterhouseCoopers in London which rationalised its meetings spend with its transient spend under the guidance of Mark Avery, its head of business services, and his team several years back – a move which produced substantial savings.
"No others come to mind," said Mr Kramer. "There has been progress but slow progress. It depends on the industry. Pharmaceuticals have taken the ball and run the farthest with it but they spend the most on MICE.
"We are working with a number of companies to get things moving but we are not there yet.
"But I think you will see more and more of it in 2007 and 2008. People will start to focus on it. It is already on the radar of organisations like ACTE and I think we will start to se a lot of activity."
* see BTE's recruitment site www.businesstraveljobs.com