The VDR Business Travel Report Germany 2004 is a story of lost opportunities. While the country is moving, perhaps more slowly than expected, towards a more sophisticated level of business travel management, it is still, almost flagrantly, missing chances to cut spending and save money
Partly this is just through believing that the best way to save money is to cut the number of trips and/or travel economy rather than business class. This will work up to a point but just stopping employees travelling can just as easily lose the company money in missed deals
But partly it seems the possibilities of savings are being lost simply because the companies and somewhat more guiltily, public institutions are just not aware that managing travel in an efficient way can also bring in substantial savings
When asked if they saw further potential for cutting their travel costs, 42% of companies with more than 2,500 employees, 58% of those with between 501-2,500, 68% of those with 251-500 and an astonishing 77% of those with 10-250 employees replied No.
Throw in two further findings: that nearly 20% of companies “take no action to cut the cost of business travel” and that “only one in every ten organisations aims to save money by negotiating contract terms” and the picture emerges of companies in desperate need of business travel advice.
But it is not an altogether black picture. VDR and its researchers at BearingPoint found that the larger companies were aware of this with 58% of those with more than 2,500 employees having a travel manager and 98% a travel policy. Most companies of all sizes also seemed to have someone responsible for travel.
“It seems at least that that the awareness for travel management issues, like travel policy as a set of binding rules to enable both direct and indirect cost cutting and the consolidation has grown. On the other hand, the current cost cutting measures are not always the most sophisticated ones,” Kirsi Hyvaerinen, BearingPoint's project manager for the survey, said.
The survey found that of the 25% of companies which were carrying out cost controls, the most favoured way of saving money was reducing the number of journeys, introducing stricter controls and tightening up travel policy.
However some were looking at comparable prices or going with no frills operators. But only 6% were looking at improving process or electronic support and just 15% considering online booking.
The larger companies were also the ones most likely to have an electronic element in their process. 63% of the big companies said that at least one part of the process was done electronically but as Ms Hyvaerinen said: “This does not automatically mean they all have a fully integrated travel management system.”
While it was mostly likely that the electronic element was in the settlement of trip expenses, Ms Hyvaerinen added: “Handwritten procedures i.e. based on paper and e-mails and the telephone are nevertheless fairly widespread, even in larger businesses.”
But if the private sector was struggling, the situation was worse in the public sector, especially among medium and smaller-sized institutions. Here Ms Hyvaerinen found that “there is hardly any awareness …of further potential for saving money.”
The reason seems to be that these bodies construct elaborate paper-driven processes to control travel which although aimed at saving money actually add to its cost. As an example, the most popular method of payment was against an invoice. The use of credit cards came fourth.
It may be that with the end of commissions, business travel in Germany is in for a shake up but that may not be the case.
Mr Michael Kirnberger, president of VDR and head of corporate travel services for Merck KGaA, said: “Big companies with professional travel management are well prepared while a number of SMEs are still waking up to the new realities. In general, there is no loud upheaval concerning zero commission.”
* A German language copy of the report is available from www.amazon.de/exec/obidos/ASIN/3980798674/verbanddetusc-21/028-8941414-5047745 An English version is available on CD-Rom from info@geschaeftsreiseanalyse.de Both cost €79.
* For the free management summary, download from
http://www.bearingpoint.de/content/library/138_vdr_registration_en.jsp