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October 3, 2013

IT&CMA: Capped Corporate Travel Budgets Means Creative Spend Tactics

With no higher corporate travel budgets in sight for 2014, travel managers at IT&CMA and CTW Asia-Pacific are devising creative ways to get the most out of allotted funds.
Usman E Gani, deputy manager – facilities (Travel), Tavant Technologies, India, told the Daily that his company has been encouraging its middle management staff travelling on lengthy trips to opt for serviced apartments instead of four-star hotels, as these properties offer 30 to 40 per cent in savings on accommodation spend.
Gani said: “The winning pitch for employees is usually the cooking facilities at serviced residences. Although top management still stay at five-star hotels, that does not matter much in terms of savings, as they do not travel as frequently as middle management, their length of stay is shorter and not many of them take trips.”
Another travel manager from India, Mohammad Ali, assistant manager – admin division, said his department is upgrading rooms for staff who agree to stay at “good three-star hotels” instead of lead-in room types at pricier five-star properties.
He said: “(This arrangement isn't written) in black and white. We use our persuasive skills to convince our employees that the three-star property is the best choice, as there are no rooms in upscale properties nearby. We will also negotiate for free ancillary services such as Wi-Fi.
“What we will not do is obtaining savings through accommodating staff in hotels with less than three stars, as their safety is (important).”
Both Mohammad Ali and Gani are keen to drive further cost savings through the use of budget carriers, and are keeping a lookout for LCC developments.
Mohammad Ali said: “I am looking forward to flights from India to South-east Asia (coming out of the) Tata Sons and AirAsia joint venture. This could result in a 30 to 40 per cent savings (on air travel) as compared to flying full-service carriers.”  

Kok Siok Mei, assistant to CEO, Continental Automotive Components Malaysia, said the company is keeping a tight rein on the number of employees travelling for business and allowing only the “bare minimum”. Kok added: “We also implement a fare comparison policy where we choose the airline that offers the cheapest fare. For short flights, such as those between Singapore and Kuala Lumpur, we will opt for low-cost airlines.”
Travel managers are also turning to cheaper destinations for their events.
Singapore-based BMW Group Asia, which has been given the same travel and events budget, has moved its product trainings and conferences out of the pricey city-state, favouring quality but affordable destinations such as Indonesia, Vietnam and Bangkok instead.
The luxury car company’s finance and administration purchasing manager, Tan Mei Ling, said: “Ever since the arrival of the integrated resorts, hotel prices in the city have been sky rocketing while we continue to be restricted by our hotel budget.”
Stephani McKay, travel team leader administration of Corrs Chambers Westgarth, Australia, said the company is in the process of collecting data on travel expenses of all employees with a view of developing a business travel strategy.
While Joseph Bates, vice president, research of GBTA Foundation, noted that companies continue to exercise caution in their travel spend, Asia-Pacific has actually seen a rise in such expenditure, with 2012 and 2013 recording a growth of 7.2 and 8.8 per cent.
Bates explained: “Companies in this region are doing well and growing, and with that comes business activities. That said, companies are still keen to raise the productivity of business travel.
“It is believed that a company needs to spend US$1 to support every US$100 in revenue. There has been a steady increase in this productivity, which means companies have been able to use less money on business trips to support revenue. How? By combining trips that require the staff to travel to several cities at one time, and through better negotiation with travel suppliers.” – Additional reporting by Karen Yue


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