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November 5, 2014

GBTA Report Looks at Costs and Savings of Managed Travel Programs

A new study by the GBTA Foundation, the education and research arm of the Global Business Travel Association, has found that negotiated discounts (90 percent), better policy management (81 percent) and more efficient processes (79 percent) lead to the biggest business travel savings.

The study, “What Costs and Savings Do Managed Travel Programs Experience?” sponsored by hotel company Accor, surveyed nearly 200 U.S.-based Travel Managers of companies with a global or multi-national presence. The overarching goal of the study was to produce a comprehensive list of managed travel program costs and savings, specifically related to hotels and Travel Management Companies (TMCs) or agencies, to better understand where Travel Managers can benefit, eliminate or reduce costs.

“Across the board, we found that Travel Managers understand that the benefits of long-term travel savings far outweigh the upfront costs having a Travel Management Company,” Joseph Bates, GBTA Foundation’s vice president of research, said in a statement. “By using TMCs, businesses have a partner that brings valuable experience and leverage with suppliers to the table.”

Travel Managers recognize TMCs provide substantial savings for managed travel programs, including:

-          Standard data reports and dashboards (91 percent)
-          Ticket management, including the ability to void a ticket (86 percent) and track and reassign tickets that are about to expire (82 percent)
-          TMC’s experience and leverage with suppliers (73 percent)

For hotels, savings were most common among companies with a medium to high spend ($10 million or more), who have more travel volume and, therefore, more negotiating power. These companies benefit from:

-          Hotel discounts with preferred hotels (roughly 80 percent)
-          Negotiated extras as standard part of the package (roughly 85 percent)
-          Last Room Availability that allows travels to get a negotiated rate regardless of room type (roughly 80 percent)

“In summary, the challenges of business travel mirror the increasing complexity of the business environment, with its internationalization and spiraling travel expenditure. Undoubtedly data collection is today’s key issue, but companies also need to be able to interpret it in the most efficient way” Vanessa Heydorff, vice president business travel for Accor, said. “Companies are all looking for solutions that streamline every stage of the business travel process. Internationalization, the emergence of new behaviors, new input from digital technology, the multiplication of people involved and the whole problem of tracking down every cost item - this new context calls for a totally new approach to business travel. The heightened complexity of the travel ecosystem and the need for companies to better control their costs in difficult trading conditions have given data an even more pivotal role in corporate life.”

The largest costs for Travel Managers justifiably come from the TMCs, including transaction-based fees and after-hours booking fees or services. Another significant cost comes from lost savings due to non-negotiated rates and outside bookings with non-preferred vendors. Proactive planning and enforcing travel guidelines and policies can help Travel Managers control these costs.

The survey report, “What Costs and Savings Do Managed Travel Programs Experience?,” is available exclusively to GBTA members by clicking here. Non-members may purchase the report through the GBTA Foundation by emailing [email protected].  To view an abstract of this research, click here.

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