Feature

Clever Cuts

With change on the horizon for many, Bob Papworth examines the innovative but simple solutions travel managers are implementing to cut costs and save time

As much as nobody likes a smart-arse, there nevertheless comes a time when one has to reluctantly acknowledge that there are those whose brain cells are in infinitely finer fettle than one's own.

Stephen Hawking, for example. Or Stephen Fry. Then there's Einstein, Mozart and the blokes who invented the paper-clip and the cat's-eye. Oh, and Jean Hopkins, business development director at Gray Dawes Travel.

If you're looking to save money on travel, she suggests, why not arrange meetings to fit in with flight or train schedules rather than setting the time of the meeting first and then paying over the odds for travel arrangements to suit?

Like all brilliant ideas, it is breathtakingly simple, blindingly obvious, and eminently practicable.

Hopkins, and Gray Dawes' marketing manager Louise Joplin, are adamant that even in the global gloom spawned by the double whammy of pandemic panic and meltdown misery, the travel show must go on.

Although Hopkins and Joplin are full of handy hints about enforcing policy, using less-flexible air tickets, booking further ahead, checking whether two single rail tickets work out cheaper than one return and, of course, using the competitively priced services of Gray Dawes, it all comes back to that road-to-Damascus timetabling bombshell.

"I tend to think history proves that you cannot improve on face-to-face meetings," says Hopkins. "You only get to form worthwhile business relationships by meeting in person, so don't cut travel. By all means reduce the number of people attending, but definitely arrange meetings around the flights, rather than the other way around."

Jackie Lacey, managing director of Chelsea Travel Management, actually based in Redhill, is another one who believes that less cash in the kitty need not necessarily mean less time ploughing the old face-to-face furrow.

She also believes that, in some ways at least, the current recession is playing into the hands of the travel management companies (TMCs), particularly among small and medium-sized enterprises (SMEs).

"To me, this is a great time, because up to now travel management companies have been seen as just an added cost - 'we only have a small travel spend, so why pay a travel management company on top of that?' - but that's all changing.

"Businesses are realising that while the internet is a great travel tool, they don't have the time resource to do all the research - they need to put all their efforts into their core business."

In many 'unmanaged' companies, Lacey suggests, substantial sums are being misspent through haphazard administrative processes, while the underlying lack of control and expertise means that potential savings are being missed as well.

"A lot is being lost in the whole expense process, because these people cannot really put a finger on what they are spending on all sorts of things," she says, advocating the creation of, at the very least, a 'loose' policy and the use of corporate cards to help get a handle on what's going where and why.

There are plenty of other tricks up the Lacey sleeve, including the use of almost-forgotten ITX (inclusive tour excursion) fares to create business trip 'packages'; consolidating to one supplier all taxi business; and redeeming employees' accumulated loyalty scheme points to pay for trip components.

She's also a great exponent of consortium purchasing, which she says is growing in popularity, and of spot-buying - a practice which needs constant assessment and is therefore best left to the experts.

"Travel management companies, such as ourselves, are always looking for people who want to work with us because they haven't got the time and want the consultancy angle where we have the opportunity to be creative.

"In fact, the economic situation is driving creativity - and those of us who believe in it will hopefully come out the other side with a definite edge. It's challenging, but the opportunities are there."

Ian Windsor, managing director at HRG UK, couldn't agree more.

"There is a strong element of those who let their employees play around on the internet definitely becoming a lot more conscious of the value that a travel management company can bring," he says. "It is becoming more apparent, but I don't think it's sudden - I think it's been growing over the past six or seven months. There is a lot more interest in the market. We have a small SME sales team and they are keeping very busy."

Smaller budgets are not, however, the exclusive preserve of smaller companies. Research by the Association of Corporate Travel Executives (ACTE) shows that corporates across the board are hacking back on travel spend, with an overwhelming 93 per cent of respondents to a pan-European survey anticipating budget cuts this year and more than half - 59 per cent - relying on 'demand management' to rein in expenditure.

ACTE executive director Susan Gurley says: "Regardless of recent market rebounds, these figures are a clear indication that companies are preparing for a long financial siege."

There is some good news for travel managers and TMCs, however. ACTE research findings show that rather than cutting out travel altogether, European companies are increasingly reliant on travel management expertise to keep their road warriors on the move.

Despite fears that the recession might spark a wave of redundancies, only a quarter (26 per cent) of respondent companies have reduced travel department numbers. More than two-thirds (68 per cent) are insisting on greater policy compliance, and more than one-third (35 per cent) clamping down hard on rogue travellers. Air policy compliance is under the closest scrutiny, with 85 per cent of companies taking a longer, harder look at use of preferred carriers. Roughly half (51 per cent) are stepping up their use of automated systems to streamline booking processes, and around one-third (32 per cent) say they are stepping up their management information and reporting capabilities as a direct result of the downturn.

Other tricks of the trade include reducing the number of unused tickets and adopting a more rigorous approach to claiming refunds, keeping a closer eye on cash advances, and appointing preferred suppliers for ancillaries such as ground transportation, parking and even meals.

And for those who haven't yet woken up to the fact that travel managers and TMCs are the best answer to credit-crunch challenges, FCm Travel Solutions has some timely words of warning.

Travel bookers, and those who employ them, who see the information superhighway as the best route to lower costs often end up paying far more than they bargain for, says FCm executive general manager Anthony Grigson.

While many TMCs and travel managers are advocating the judicious use of more restricted fares and room rates, the word 'judicious' is key - Grigson suggests that the unwary can be caught out.

Lower prices are usually hedged with restrictions, searching for them takes time, and there are traveller tracking issues. What looks like a bargain fare can be dirt cheap until you come to change your flight times, and 'free' extra overnights inevitably incur extra expenditure on food and beverage, if nothing else.

And he suggests it is the SMEs that can least afford it that are the most vulnerable to online travel temptations.

"We have seen companies forfeit hundreds or thousands of dollars in lost room nights or air fares when their travel plans have changed, after booking and paying for tickets that could not be amended and were non-refundable," he says.

"Every company is focused on value right now - even more than before. However, value in travel doesn't come from buying what appear to be the cheapest tickets online. There are several factors that can push up the total cost of these bookings."

Grigson says that while costs associated with booking changes were the biggest factor to consider, lost employee productivity was also a potentially significant expense.

"A business traveller or personal assistant can spend hours trawling the internet to find what they perceive to be the best rates, when not all available fares are displayed and there are hourly price changes. That's time and productivity impacting the real cost of the ticket and the company's bottom line," he maintains.

The internet sirens aren't always successful in their efforts to lure the unsuspecting on to the budget-busting rocks, however. HRG's Ian Windsor contends that there plenty of savvy buyers out there - and on his own team.

"What people are doing is buying a lot more cleverly, and a lot more effectively. From an air point of view, people are booking in advance, while with hotels they are leaving it until later in the day."

The phenomenal growth in business travel by train - rail bookings were up by almost one-fifth last year, according to the Guild of Travel Management Companies (GTMC) - is not necessarily a result of the economic downturn, Windsor argues.

"I think there has been a big general trend in that direction anyway, and the rail companies have responded appropriately. Growth in rail has come about at least in part because of improvements in the ways you can book rail."

What has changed, as companies slash their budgets to the bone, is corporates' attitude to travel per se. "Travel avoidance is almost the first question we ask clients these days," says Windsor. "Do you need to travel? Do four people need to go, or can two of you do the same job?"

The trend underscores the TMCs' proposition that they are much more than travel enablers. "We are here to help clients manage the cost of travel, rather than just to help them jump on an aircraft," says Windsor.

Over at Gray Dawes, Jean Hopkins is more than happy to help people jump on an aircraft. Just so long as it's the one around which their meeting has been timetabled.