Savings Against Policy with Managed Travel
How much time and money can your company save from establishing a managed corporate travel program with a thorough corporate travel policy?
With a clearly communicated corporate travel policy in place — and with the help of technology that makes it easier than ever to enforce — more business travelers are booking airfare and accommodations in-policy.
What kind of a difference does this make for businesses? How much time and money can companies really save on travel by switching from an unmanaged travel program to a managed travel program with a corporate travel policy? We’re peeling back the layers to see just how in-policy corporate travel spending compares to out-of-policy travel spending.
How much can companies save by implementing and enforcing a corporate travel policy?
Companies can save as much as 20% in time and money on business travel when they make the switch from an unmanaged corporate travel program to a managed corporate travel program. What is the difference between these two travel management styles?
With unmanaged programs, travelers book flights and hotels using whatever sources they choose. There are no company-preferred vendors or a protocol in place for booking. Budget is usually the only guideline that needs to be followed in an unmanaged travel program.
Companies with managed travel programs use an internal corporate travel manager, external travel agency, or a corporate travel booking tool to arrange and manage transportation, accommodations, and related expenses. Managed programs typically work with preferred vendors for cost savings. Most importantly, they implement in-depth corporate travel policies to help regulate costs and processes.
With savings up to 20% from implementing a travel policy, your company can use that wiggle room for more travel or to develop other parts of the business.
Investing in a corporate travel policy pays off quickly and significantly through travel cost savings.
Where do these travel savings come from?
So where do these 20% savings on corporate travel come from after you switch to a managed travel program? Here’s a breakdown of the savings.
With a travel policy in place, all bookings typically go through predetermined vendors. When your company consistently gives these vendors business, it is rewarded for its loyalty with discounts. Similarly, if your company works with a corporate travel booking software or travel agency, it benefits from savings that are passed down from these companies thanks to their long held industry connections.
Companies that use a corporate travel booking software can save up to 30% on airfare and accommodations, in addition to the money saved by employees booking within budget.
2. Travel changes
Did you know that the average fee to change a flight is $200? That doesn’t even include up-charges that you might have to pay to get on a more expensive flight. Business travel plans or often fluid, so flight change fees add up quickly in corporate travel.
Once again, however, industry connections pay off. Travel booking tools and travel agencies are typically able to change their clients’ travel plans fee-free due to the volume of business that they give their vendors.
Let’s say that your company’s travelers take 500 flights each year, and of those flights, 100 have to be cancelled or changed. At $200 per flight, your company is hypothetically spending $20,000 on change fees alone.
With a strong corporate travel policy and assistance from corporate travel software, a job that would’ve previously needed several full time staffers can now be done by just one person.
Meagan Dignan, Employee Happiness Manager at Botkeeper, explains that when she was booking flights for her company’s business travelers, “there just weren’t enough hours in the day to… record everyone’s specific preferences and make sure each employee was happy with their flight times.”
With a corporate travel booking tool, business travelers can choose their own flights and accommodations, and let their travel managers handle bigger picture initiatives.
The average salary for a corporate travel manager in the United States is about $87,000. Let’s say that before implementing a corporate travel booking tool your company needed a full time travel manager to perform day-to-day tasks like selecting flights and hotels for their business travelers. After adopting a corporate travel tool to streamline travel management and allowing travelers to select their own travel plans, your company may be able to rely on the Office Manager or Executive Assistant to manage travel, which would save your company an $87,000 salary for a full time travel manager each year.
Thorough corporate travel policies set guidelines for employees to follow when unexpected changes, like flight cancellations or hotel overbookings, happen while they’re on the road.
When Botkeeper was a small company and had few business travelers, its travelers would call Meagan to ask for help in emergency situations. She would then call the airlines and hotels to make new arrangements. As the company grew, however, providing that level of support became impossible.
What did Meagan and Botkeeper do? Instead of adding someone to the payroll to provide 24/7 support to travelers, they started using a corporate travel tool to provide their travelers with around-the-clock virtual assistance. Your company can use a corporate travel tool or travel agents to help your travelers while they’re on the go for a fraction of the cost of several full-time employees, while saving time all around.
Switching from an unmanaged travel program to a managed travel program that enforces corporate travel policy adherence means more savings for your company. What will your company do with those savings?