Feature

THE WISDOM OF THE AGES

Dreaming up new procurement solutions can be a real headache, says Bob Papworth - but sometimes the old ones can be the best.

---

Just like those late-night Freeview home shopping channels, as any lonesome Buying Business Travel readers will be only too aware, there is something strangely addictive about 'household hints' websites.

Where else could one learn, for example, that an unbroken line of cucumber peel across the threshold will keep ants out?

Or that a smear of plain yoghurt will remove oil stains from woollens? The real fascination of these homespun home truths lies in their origin.

Who on earth discovered - and after what length of trial-and-error process - that the formic fraternity has an inbuilt aversion to Cucumis sativus? Which ganzy-clad garage-hand's quest for cleanliness first led him down the Yoplait path of enlightenment? The fact is that these off-the-wall tips gain and retain credibility precisely because, in general, they do work.

How very odd, then, that recommendations such as "book corporate travel arrangements earlier, and make fewer changes, and you'll save money" have taken so long to catch on.

However, in what Stewart Harvey, client management director with Hogg Robinson Group (HRG) describes as a "healthy storm", they are now catching on, and with a vengeance.

Harvey argues that higher prices, shrinking air capacity and patchy availability of hotel rooms, coupled with the huge impact of the global economic crisis, are finally forcing corporates to take seriously those 'household hints' which travel management companies have been banging on about for years.

Tony McGetrick, BCD's director of sales for the UK and Ireland, goes even further, suggesting that commercial worries may actually be generating new business.

"We're finding that corporate concerns about the economic downturn are actually opening up opportunities for us," he says. "As travel spending comes under ever-closer scrutiny, companies are turning to professionals such as ourselves to manage their travel in a more cost-effective manner.

"We are receiving an almost-unprecedented number of RFPs [requests for proposal] at present, and a substantial proportion is coming from companies who have not previously had a managed travel programme - this is genuinely 'new' business, in that it is new to the industry, not just to us."

Will Leonelli, an area leader with FCm Travel Solutions, endorses the thinking behind the trend. "Never in my opinion has it been more necessary to utilise a travel agent who can source the wide variety of fare types in a single hit and present the various cost saving alternatives to the client.

Using the internet or going directly to the airlines can be a false economy, as you are not presented with all the options and have no idea of what the real savings can be."

And top of Ian Allan Travel chairman Paul Allan's list of handy hints is: "Use a travel management company to ensure you get all travel options available, rather than trying to search for everything directly on the internet."

Preaching to the unconverted or, in BCD's case, having the unconverted flock to you, is all very well, but travel management companies are still spending a great deal of time regurgitating the same old message to the part-converted - client companies who 'half-manage' their travel.

Fortunately for the travel management company (TMC) community, if not for those on the receiving end, travel managers themselves appear to be coming under increasing internal pressure to get their corporate house in order. An Amadeus survey has exposed serious dissatisfaction among company chief financial officers - with their own in-house travel managers.

The poll reveals that less than 40 per cent of chief financial officers (CFOs) are happy with the level of savings delivered by their companies' corporate travel programmes. Travel managers have made "minimal" contribution to wider corporate cost-saving efforts, they say.

Worst of all, only 27 per cent of Amadeus' CFOs believe their relationship with their travel departments to be "very effective".

In travel managers' defence they do appear to be responding, by going back to TMCs and asking them to go over those household hints one more time.

"We are having these kind of conversations with our clients at this very moment," says HRG commercial director Chris Fry, who stresses that compliance is king.

At this stage at least, Fry says, travel budgets aren't being cut. "It's very much about cost control," he explains, "but 'control' is the first bit. It's not a case of 'stop going' - you still need to have that meeting - but now is the time to get your compliance in place. All those people who don't take the lowest available fare - they need to be brought into line."

Reassuringly, he adds: "Most travellers accept the need to make the buck go a bit further. People are going farther back down the plane, and they are dropping down the star ratings."

While they're in acquiescent mood, Fry suggests, corporates should be looking at policies as a whole, and re-addressing some key areas:

Book earlier where it's appropriate - the volatility of the hotel market means an element of last-minute spot-buying needs to be built in.

Reduce the number of alterations, even though if travellers are booking earlier they are more likely to make changes, "and what starts out as a cheap fare can then suddenly escalate", says Fry.

Merge trips. Fry comments: "More and more people are asking for pre-trip information so that they can see who's going where and maybe combine two trips into one."

On that last point, Fry also advocates the use of rail for journeys under 250 miles. "Even I recently took a train from Basel to Frankfurt," he says, in a tone that implies he's still trying work out how that happened. On those three points alone - and as our panels show, there are many more - there is an extraordinary degree of unanimity within the TMC community.

FCm's Leonelli suggests: "In the current economic climate, I anticipate some clients will review their travel policy and target fares that are cheaper and possibly more restrictive.

Although this would involve more advance booking in order to get cheaper advance purchase fares, prices can be dramatically lower than the fully flexible tickets that many business travellers have taken in the past.

"The overall savings to a client can be very significant and, more often than not, many of these fares still allow a degree of flexibility."

Gray Dawes' marketing manager Louise Joplin has earlier booking at Number One in her list of handy hints, and covers off both trains and pre-trip data as well. The same points feature prominently in guidelines suggested by ATP International head of marketing Jeremy King.

Fiona Vandersluys, director of sales and marketing at Chambers Travel Management, says some travel managers are taking a technological initiative - and that others would do well to follow their lead.

"We are finding there is a much greater push towards mandating the use of online tools," she says. "It is a much more robust way of keeping an eye on policy violations, not just in terms of the management information you get back, but you can restrict the view that people have - you can control what they see, and therefore their ability to go off-policy."

She also advocates keeping a tighter rein on expensive 'extras'. "There is an awful lot that goes under the heading of 'incidentals' - taxis and so on - which hitherto we didn't pay much attention to, but which should be more closely scrutinised."

Paul Allan's best-practice bulletpoints come thick and fast. "Combine journeys wherever possible, and plan your itineraries carefully. Hotel rates can differ wildly, so do you really need a 5-star room when a 3- or 4-star hotel would be more than adequate?

"Can your traveller make that other call on clients that a colleague would normally do? Can you get out and back in a day rather than staying over in expensive hotels? Is the hotel close enough to your business venue - walking distance - to avoid taxi costs?

Can you persuade your clients to meet your travellers at the airport or railway station? There's normally a good hotel or restaurant close by to meet at, in pleasant surroundings. "Above all, make sure you need to make the trip in the first place."

If that wasn't enough to be going on with, ATP's King urges travel managers: "Always look at the bigger picture - the total trip cost. Just because a flight looks cheap doesn't mean the trip will be. Extra cab fares, hotel nights and contractor day rates waiting for a connection all push the total cost up, so consider every aspect before finalising."

And while you're considering all that, plus the mysterious origin of those opening household hints, you might like to add one more enigma to the list ...

Who on earth first thought haggis was a good idea?