12 December 2022, etc.venues Monument, London
Business Travel Show Europe, presented by The BTN
21 November, London Hilton Metropole
It has long been acknowledged that global consolidation, like the use of self booking tools, invariably bring savings to the corporate.Now the new study by Carlson Wagonlit Travel shows more clearly how.Global Horizons: Consolidating a Travel Program marks out the drivers for change, the conditions which are necessary and, for those with an eye on the bottom line, the likely results.The report is the result of research by the CWT Travel Management Institute which questioned 120 companies around the world and did nine in-depth studies. The basic requirement for a company seeking to consolidate its travel policy and processes globally was a minimum annual spend of $5m, suitable travel patterns and either a centralised company culture or a pressure to control or cut costs.The travel pattern is important as if a company's main spend is very much local, like Boston to New York, consolidation is not likely to have much impact. If these prerequisites are fulfilled, the company must also have comprehensive and balanced approach, a solid foundation with a principal TMC and a long term commitment as consolidation can take two or more years.The research found that one significant trend was that more and more companies were employing global travel managers.A decade ago, only about 18% of European companies and 12% of American companies had a global travel manager. The figures now are 60% in Europe and 56% in the States. In three years time, these are set to rise to 71% and 70% respectively.The main reason, CWT found, why companies wanted to consolidate included:* improving the quality of data* the benefits from sourcing strategy sourcing* improved security measures allowing for quicker tracking of travellers in an emergency* streamlining of operations* better service* support through times of change management.
Christophe Renard, senior director of the Institute, said that companies which opted for globalisation of travel management and saw the policy implemented stood to save on average 20% of their spend.The breakdown of these savings was 12% in travel policy and processes, 7% in sourcing and 1% in booking and fulfillment.On air spend, Mr Renard said companies adopted a variety of methods to make savings. These included employees travelling economy except for senior management, especially for trips under six hours, and advance booking by as much as two weeks which brought one company 10% savings.Mr Renard said sourcing from a limited number of suppliers also brought savings: 7.5% on air spend, 6.5% on hotel spend and 4.5% on car rental spend.Concentrating business with a limited number of suppliers was key. Mr Renard said that companies consolidating should increase the volume allocated to the preferred airlines.One good ploy was to allocate market share in countries where airlines were not the national carrier but were challengers to it.Companies should also route their traffic through preferred hubs.This enlarged volume with selected carriers would increase leverage and achieve additional discounts.He gave as an example one company which has increased its volume with Lufthansa by 51% and this gaining extra leverage simply by using the airline more on flights which were departing from outside Germany.Another company had increased volume on Air France/KLM by 96% by this method.Another benefit was that the fares charged by challenger airlines compared with the dominant ones were usually lower. For example, a challenger airline's fare on the New York-Zurich route was 35% lower than that of the dominant carrier.Consolidating hotel spend also brought savings. But here it was not so much consolidating with one chain but with using one property. One example CWT gave was that a company which used a chosen hotel for 40 room nights a year negotiated a nightly price of $140 while a company which had 560 room nights got a price of $87.Besides spend, the CWT research also found that consolidation has a positive impact on both service and security.76% of the respondent said that services to travellers under consolidation was "high" or "very high" while 69% said passenger security had notably improved.But Mr Renard warned that companies needed a balanced approach and there were areas where a regional or local approach was better than an across the board global approach.For example there was no single online booking tool which worked in every market so a regional approach, employing the best available tool, was the correct one.There were also cultural differences which sometimes made a local approach preferable. Pre-trip approval was often done better locally.
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