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Effective Travel ManagementEight key levers to optimize a travel program

Introduction

Business travel is essential for building better relationships and crucial for drivinggrowth. But it can be complex to manage and demanding for travelers. Complexbecause of the multiplicity of distribution channels and the ever-evolving pricingmodels airlines and hotel companies apply. Demanding because of the time andenergy required and the need for travelers to stay productive while on the go.

Companies can meet the challenge by having a well-managed travel program thatdelivers great value to the organization and its travelers. A program that takes a 360-degree view of the company’s travel needs. A program that delivers savings, service andsecurity while respecting the imperatives of environmental protection and sustainability.

What are the key priorities for a robust and effectively managed travel program intoday’s fast-changing environment? How can companies derive greater value fromtheir travel program and satisfy all of their stakeholders?

Carlson Wagonlit Travel (CWT) sees travel management as a multi-faceted undertakingwith eight key levers companies can use to optimize their travel program.

This booklet highlights those levers, which are also explored by the CWT TravelManagement Institute in a series of research initiatives designed to help companiesderive the greatest value from their travel program.

ContentsIntroduction..................................................................................................................................................3

Context....................................................................................................................................................5Eight Key Levers................................................................................................................................6

Lever One.....................................................................................................................................................7Provide the right services and assistance to travelers and optimize transaction processing

Lever Two...................................................................................................................................................11Tackle hotel spend in a disciplined and professional manner

Lever Three................................................................................................................................................14Continue to drive air and ground transportation savings

Lever Four..................................................................................................................................................19Increase policy compliance and optimize demand management

Lever Five...................................................................................................................................................24Further consolidate travel programs

Lever Six .....................................................................................................................................................28Address security needs and corporate social responsibility

Lever Seven...............................................................................................................................................32Integrate meetings and events in the travel program to control and optimize the related spend

Lever Eight.................................................................................................................................................35Develop executive dashboards and actionable performance measures

5

Context

A growing number of companies are seeking to optimize their managed travel program.

As they do so, they are faced with several challenges:

Globalization and the imperatives of businessdevelopment continue to drive business travel,despite rising prices. This is true for not onlythe most industrialized countries but for thelargest emerging ones such as Brazil, Russia,India and China. Despite increasing demandfor sound alternatives to business travel,companies will continue to send their peopleon the road and incur higher costs.

The price of certain product/market categorieswill continue to increase as demandoutpaces supply.

This is particularly so for average daily ratesof hotel rooms in many cities around theworld. This inflationary trend is expected tocontinue, especially in emerging countriesof Asia Pacific and Latin America, where asignificant supply of new hotels will taketime to be completed. As hotel suppliersuse yield management techniques tomaximize profits, negotiations are morechallenging.

The cost of air travel continues to rise as oilprices and surcharges increase. Manyairlines are also imposing ancillary chargesfor what used to be standard services suchas checked baggage. And some U.S. airlinesare eliminating certain domestic routes infavor of more profitable transatlantic andtranspacific ones. Open skies agreementsshould boost competitiveness and bringdown certain fares, as more flights to moredestinations increase choice for travelers.On the other hand, consolidation in theairline industry could lead to fewer options.

Supplier markets and distribution channelsare complex and continuously evolving.Ensuring complete and easy access torelevant content can be challenging in theface of changing GDS (global distributionsystem) regulation, as seen in the UnitedStates and Europe. Multiple pricing models,especially for air travel, require constantlybeing on top of the situation to maximizevalue.

An increasing number of companies arestriving to find a better balance betweencutting cost from their travel program andensuring the comfort, productivity andwell-being of their travelers.

In response to globalization, many companieshave expanded beyond their national bordersand are consolidating their travel program ona regional or global basis for greater efficiencyand savings. Consolidation is often a complexundertaking.

Traveler security remains a major area ofconcern for most companies, as duty of careis increasingly the employer’s responsibility.

Corporate social responsibility (CSR) is onthe global agenda, with more and morecompanies being held accountable for theimpact their activities have on theenvironment and the communities in whichthey operate.

Eight Key Levers

Against a complex, ever-evolving backdrop, companies can use a number of levers to

optimize their travel program. In this booklet, we will highlight the eight key levers that

address the travel management priorities of companies around the world: savings,

service, security and sustainability.

Sustainability

Service

Security

Savings

Figure 1: Travel management priorities: the “4Ss”

Eight key levers to effective travel management:

1. Provide the right services and assistance to travelers and optimizetransaction processing

2. Tackle hotel spend in a disciplined and professional manner3. Continue to drive air and ground transportation savings4. Increase policy compliance and optimize demand management5. Further consolidate travel programs6. Address security needs and corporate social responsibility7. Integrate meetings and events in the travel program to control and optimize

the related spend8. Develop executive dashboards and actionable performance measures

7

Lever One:Provide the right services and assistance to travelersand optimize transaction processing

By using online booking tools for simple transactions, companies can reduce their total

travel costs by up to 15 percent.1 For complex itineraries and special services, applying

the skills of expert travel counselors at the point of sale is important for traveler

satisfaction. Having access to the relevant content of airlines, rail providers, hotels and

rental car companies is another priority for travel managers and travelers alike. Equally

important is providing travelers with a range of services designed to meet their needs

from the moment of booking through their return. Implementing the service configuration

that best balances a company’s requirements for service and savings plays a primary role

in supporting these objectives.

1 Toward Excellence in Online Booking, CWT Travel Management Institute (2006)

To meet these goals, companies must work witha travel management company who can helpthem to:

Define and implement the right serviceconfiguration. Companies must considerwhich service configuration will best meet theirrequirements and establish service levelagreements that will meet travelers’ needs.Several options exist, presenting various levelsof effectiveness—in terms of service, savingsand security—and efficiency (i.e., lower unitcosts and higher productivity).

Simple transactions are likely to be processedin the most automated manner, ideallythrough a corporate online booking tool.Complex bookings and VIP services, on theother hand, require greater attention andexpertise. To that end, companies have severalservice configurations from which to choose.

Sometimes an on-site facility (i.e., implant)may be the right set-up to meet service levelrequirements such as those needed for VIPsat headquarters. Other companies opt formore centralized solutions such as single-language, regional service centers where alltools and procedures are standardized. Thisoption is usually reserved for globalcompanies who are successful in imposinga unique working language and serviceoffering across all countries in the region.Companies who prefer an intermediaryapproach usually establish a local servicecenter in each country. This alternative isoptimal when the service center is created ina low-cost, “near-shore” zone.

Source: CWT Travel Management Institute


% of savings

Figure 2: A range of service configurations tofit different client needs

Ensure full access to relevant content atcompetitive prices in accordance with thetravel policy. GDS (global distributionsystem) models have evolved as financiallystrapped airlines seek to optimize theirdistribution costs. Consequently, opt-in feesare often charged to ensure that full contentremains in the GDS and booking is efficient.Removing content from the GDSs wouldresult in inefficiency, as travelers and travelcounselors struggle to consolidate contentfrom multiple sources. To date, no singlealternative system can provide the full rangeof content—including hotel, rail and car—orthe pre- and post-trip services currentlyavailable in the GDSs. And integrating avariety of alternative systems would lead tohigher technology costs.

Optimize the efficiency of simple bookingsby driving online adoption

Companies who use online bookingsystems can reduce their total travelspend by 5 percent on average andsometimes up to 15 percent fromcombined savings on airfares andbooking fees, according to an in-depthresearch initiative, Toward Excellence inOnline Booking, conducted by the CWTTravel Management Institute. CWT alsofound that in the majority of cases,payback occurs within one year ofimplementation.

Figure 3: Online booking can result in savingson average ticket price of 5% on average

On-site agenciesin major cities

Business travelcenters in major cities

Effec

tiven

ess

(Ser

vice

,sav

ings

,sec

urity

)

Efficiency(Lower unit costs, higher productivity)

HighLow

Hig

hLo

w

Small on-siteagenciesin major cities

Multi-languageregional centers

Large on-site centersin inexpensive areas

Single-language“near-shore” centers

Networked centers

Single-languageoff-shore centers

Single-languageregional centers

The level and speed of online adoptionvary from one company to the next.CWT has identified two principal groupsof performers: the leaders and thelaggards. Within each group, there aretwo subgroups of performers: the fastadopters and long runners are amongthe leaders, and the stalled pioneers andnewcomers among the laggards. Onaverage, adoption levels and speed varyby a factor of ~5 among the foursubgroups of performers.

The two principal factors influencingperformance are: company culture andfinancial conditions. Companies with thegreatest speed of adoption tend to haveone or more of the following attributes: theability to easily adapt to change, a strong

do-it-yourself corporate culture, a widelyshared and systematically measuredmethodology to improve process perfor-mance, an e-culture, and/or a mandatoryculture.

When a company is under significantpressure to reduce costs, there is greaterpotential to achieve a higher adoptionlevel.

Successful companies tend to use aholistic approach, combining four keydrivers, known as the “4Ps,” to increaseonline adoption: Product and process,Price differential, Push from managementand Pull through training and incentives.

9


• Effective IT access• Enhanced booking tool features• Integration with travel processes• Service configuration• Improved efficiency from a travel arranger'sstandpoint• Creation of travel arranger positions

Product & process Pull• Communications• Training• Appointment of champions• Display of statistics• Incentives

• Differentiated pricingbetween online and offline transactions

Price• Barriers to access BTCs• Tracking of non-booking-tool• users• Effective management support /mandates

Push

Figure 4: The “4 Ps”: a holistic approach

Provide a suite of services to enhance thetraveler’s experience. A stress-free, well-prepared business traveler enjoys greatersatisfaction and productivity, all of whichbenefit the company he or she works for. Tothat end, travelers need relevant, easilyaccessed information, user-friendly technologythat facilitates travel planning and 24/7assistance around the world.

A good starting place is a one-stop, Web-based traveler portal that offers relevantcontent, including the company’s travelpolicy and destination-specific information,as well as easy access to corporate bookingand profiling tools.

As personalization becomes increasinglyimportant to the traveler, having access toa complete, easy-to-use profiling toolthat is integrated with on- and offlinebooking is essential to ensure thatpersonal preferences are taken intoaccount and bookings properly made thefirst time.

Mobile communications further enhancethe travel experience by keeping travelerswell informed and updated with the latestinformation concerning their flight anddestination.

Day or night, anywhere around the world,travelers must have access to emergencyassistance in the event of a crisis or off-hours change in travel plans.

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Lever Two:Tackle hotel spend in a disciplinedand professional manner

Occupancy rates and prices should maintaintheir inflationary spiral across all segments, asdemand is expected to exceed supply until2010. At that time, additional hotel rooms willbe available, particularly in emerging markets.Inflation has been most prominent in “hot”markets such as New York; Washington, D.C.;and London, as well as Moscow, India, China andseveral cities in Asia that are experiencingdouble-digit price increases. Those corporationsthat have a hotel policy in place stand thegreatest chance of minimizing the impact ofrising hotel costs.

The hotel industry has introduced various ratestructures, often favoring a dynamic pricingmodel (i.e., the best available rate as determined

by supply and demand) over the traditional“fixed” or “flat” rates negotiated by travelmanagement companies and/or their clients.Best available rates can sometimes be lowerthan negotiated rates and should be takenadvantage of when appropriate. Nevertheless, itis advisable to continue negotiating fixed rates toset a limit on prices in key locations. This will helpmaximize control over hotel spend during peakdemand periods. When this is not possiblebecause of insufficient volume, negotiating afixed discount on the best available rate isrecommended.

CWT statistics indicate that on average, only 50percent of hotel bookings are made through anorganization’s online booking tool or travel

Hotel spend represents between 30 and 50 percent of a company’s total travel spend

but in contrast to air spend, it is often left unmanaged. Corporate travel buyers need to

focus greater attention on this complex, inflationary spend category to optimize their

overall travel program. Unlike the approximately 250 IATA (International Air Transport

Association) companies that constitute the global airline industry, the corporate hotel

market is fragmented with more than 250,000 suppliers, creating an elaborate sourcing

environment for travel buyers. Establishing and closely monitoring a hotel program that

travelers adhere to provides greater leverage for negotiations and drives savings.

Discouraging the use of distribution channels outside of the travel management company

(i.e., hotels’ proprietary reservation systems and Websites, Web booking sites) is an

important step to enhancing compliance, capturing hotel spend, obtaining better rates

and improving traveler tracking in the event of an emergency.

management company. This means a significantportion of all bookings are not leveraged duringsupplier negotiations. Furthermore, non-compliancewith the hotel program increases by 15 percentwhen bookings are made through alternativechannels. Traveler tracking and security are alsocompromised when hotel bookings are madeoutside of prescribed channels.

Companies who are successfully managing theirhotel program tend to adhere to the followingbest practices:

Consolidate data for optimized hotelsourcing. Consolidating global hotel data fromtravel management companies, corporate cardproviders and hotel suppliers is the first stepto assessing overall volume and improvingnegotiating power.

Carefully orchestrate negotiations with alimited number of suppliers. For bestresults, companies should coordinate arequest for proposal process with hotel chainsand independent properties alike. Buildingstrong local relationships with chains andindependents is essential for negotiations, asmost pricing decisions depend on the numberof room nights booked annually at eachindividual property (including chain hotels).This is in stark contrast to airlines, whosediscounts are based on overall volumes. It isalso important to remember that working witha limited number of suppliers in each cityresults in greater volume per property andlarger discounts. According to a CWT survey,consolidation of hotel sourcing allowscompanies to save on average 6.5 percentand up to 12 percent after one year.2

Figure 5: Companies can save on average6.5% on hotel spend through consolidationDeclared savings from concentrating hotel sourcing

Monitor negotiated fare-loading in GDSs(global distribution systems). There is anincreasing incidence of GDS “rate squatting”that compromises compliance and savings.This occurs whenever a hotel uploads ratesbefore it actually signs an agreement with acompany or after a contract has expired. Thereare several ways to address this problem:conduct regular hotel rate audits to ensure thatpreferred properties have correctly loaded theirclients’ negotiated rates into a GDS, integrateclear GDS rate-loading instructions in therequests for proposal, reinforce travelers’awareness of the preferred hotel program, andintegrate a filtering capability into the onlinebooking tool.

2 Global Horizons: Consolidating a Travel Program, CWT Travel Management Institute (2007)

Based on 49 respondentsSource: CWT Travel Management Institute

Have travelers book hotels through thecorporate online booking tool or the travelmanagement company for increasedcompliance, enhanced security and thebest price.3 According to CWT research,travelers cite practicality (i.e., a hotel’s proximityto their business destination), availability andthe ability to obtain better prices elsewhere—a misperception, as indicated in Figure 6—astheir main reasons for booking outside oftheir travel policy. Furthermore, they bypasspreferred booking channels and tend tomake reservations with the hotel directly.

CWT data also indicates that travelers usepreferred suppliers more often and are lesslikely to use deluxe hotels when they bookthrough the travel management company. Inaddition, they are more effectively tracked in

the event of an emergency. There are severalways to address non-compliant behavior:internal communications and training aboutthe travel policy, targeted actions toward non-compliant travelers, non-reimbursement,automatic routing to hotel content when anair booking with an overnight stay is madeonline, and redirection at the point of sale.

Adjust the preferred hotel program toincrease traveler compliance. Unusuallylow compliance with preferred hotels mayimply that travelers’ needs are not beingadequately met and that corrective action isneeded. Key factors to consider include therange of cities covered, the convenience oflocations, and the scope and quality oftraveler services.

13

3 Playing by the Rules: Optimizing Travel Policy and Compliance, CWT Travel Management Institute (2008)

Based on a CWT hotel price benchmark (262 samples), June 2007Web booking sites sampled: Expedia.com, Travelocity.com, HRS.com and Kayak.comSource: CWT Travel Management Institute

Figure 6: Hotel room rates are 18-21% lower when booked through the travel managementcompany

Change is a constant in the airline industry.Consolidation, ceased operations, evolvingdistribution models and new forms of pricingrequire constant focus and adaptation. Althoughmany companies have successfully respondedto these changes, opportunities for greaterprogress remain:

Address traveler behavior to capturesavings. Requiring travelers to book at least14 days in advance of travel and purchasetickets with restrictions (i.e., non-refundableor changeable with penalties) represents akey opportunity for optimizing air spend. Onsome routes, tickets purchased 14 days inadvance can cost 50 percent less than aticket purchased three days or less from thedate of departure.

Restricted fares, including those offered bypreferred airlines, are also recommended,even if a penalty for change or cancellation isincurred. (Companies change or cancel only20-35 percent of tickets, less than iscommonly believed.) The total cost of arestricted fare is on average 24 percent lessthan a negotiated flexible fare.

Travelers must also be instructed that thelowest fares are not available on the Internet,as regularly verified by independent auditingfirms such as Topaz International. Furthermore,travel policies that mandate “best buy” orlowest available airfares do not reduce airspend when compared to those that favorpreferred airlines. In fact, requiring travelersto take preferred airlines over the lowest farecan save companies approximately 3 percentof air spend by enabling them to meet theircommitments for volume-based discounts.

All of these opportunities for savings must beclearly covered in the travel policy andinternal communications must emphasizethe benefits of compliance.

Concentrate volume with a limited numberof preferred suppliers for larger volume-based discounts.4 Selecting a minimumnumber of preferred airlines, including thosewhich are members of an alliance, tomaximize coverage of city pairs is a goodstarting point. This choice should includechallenger airlines that are operating outsideof their home market, as their rates may besignificantly lower than those of dominant

Lever Three:Continue to drive air and ground transportation savings

Continuously monitoring air and ground transportation spend remains key for driving

tangible savings. Although air spend receives the greatest attention from most travel

managers, opportunities for further savings exist. Ground transportation on the other hand,

which includes rail, car rental, limousine, chauffeur-driven “black car” and taxi services, is

often a low priority, although it represents 10 percent of a total travel budget in the United

States and even more in Europe and Asia, where rail is commonly used by business

travelers.


carriers. Concentrating bi-directional traffic (i.e.,originating on either side of common citypairs) with preferred suppliers also increasesaggregate volume. Finally, establishing a hubsystem for long-haul flights adds to thevolume allocated to preferred airlines. Taking

these different steps to consolidate sourcingcan result in savings of up to 8 percent oftotal air spend.

15

0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40

Price (index)

Volumes allocated to Airline X per company (in US$M)

A company allocatesUS$2M to Airline X

and obtains a price of 85 (index)

A different companyallocates US$34M to Airline X and obtainsa price of 60 (index)

Price

Volume

"Volume-based discount"means additional

discount reached bydoubling volumes

x2

x2

-6%

-x%

Figure 7: The higher the volume, the larger the discountExample of Airline X: When companies double the volume allocated to Airline X on international routes, they typically

receive an additional 6% volume-based discount.


Negotiate point of origin pricing. Companiesthat have largely optimized their air sourcingare going one step further by extending theirpreferred carrier agreements on certainmajor routes to travelers in more locations.New terms are being negotiated on the pointof origin (i.e., country from which the flightdeparts) rather than the point of ticketing(i.e., the country from which the booking ismade). CWT calculates that savings canreach hundreds of thousands of dollars.Several things, however, should be kept inmind before negotiations begin: a companymust have significant global volume with anairline, as well as significant volume on theroute(s) in question; to facilitate rate-loadingand reduce related costs, airlines prefer one

call center per region to national call centers.A solid relationship with the airline is also astrong plus.

Find the right balance between negotiatedairfares and other available options. Inaddition to their negotiated rates, companiesare taking advantage of a variety of faresavailable within and outside of GDSs to reducetheir total air spend. These include promotionalfares; fares offered by low-cost carriers; andlow fares with restrictions from traditionalcarriers, with savings per ticket ranging from 10to 70 percent. These upfront savings, however,must not come at the expense of volume.

Benefiting from air alliances

Alliances represent one more way for travel managers to optimize their air spend. Simplifiedprocesses and greater savings are possible when companies have the appropriate profile andknow-how to negotiate effectively with alliances. Two major benefits result:

Soft-dollar benefits: Alliances simplify the request for proposal process by providing a one-stop shop. In addition, alliance members frequently offer uniform contract terms andconditions. Once an agreement is signed, they can streamline ongoing program managementby providing centralized fare-loading, consolidated reporting and a single point of contact.

Hard-dollar benefits: Companies can realize incremental savings by leveraging overallvolumes in their negotiations with alliances.

A company is most likely to benefit from an alliance agreement when it has a traffic pattern thatmatches that of the alliance network, a consolidated travel program and a preferred partnersourcing strategy. Companies who meet these prerequisites can maximize the benefits by:

Strategically selecting those airlines within the alliance that offer the best fares on a givenroute

Ensuring that alliance fares are more favorable than those of individual members

Demonstrating their ability to deliver agreed-upon volumes

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Managing the trade-offs betweenair and rail

There are several good reasons for integrating arail policy into a managed travel program: cost,comfort, convenience, punctuality, safety andreduced carbon dioxide (CO2) emissions. InEurope and Asia in particular, extended high-speed rail networks, improved distributionthrough GDSs and online booking tools, and thecreation of rail alliances favor the businesstraveler.

Integrating rail into your travel program meansweighing the options between air and rail,increasing rail volume where appropriate andcommunicating the benefits to travelers. Here isa four-step approach that will help companiesget on track:

Identify the main routes where rail is analternative to air, looking at the number of

daily departures and the duration of the trip.Rail could well be a convenient solutionwhen travel time is under three hours.

Define the company’s current volume of railtraffic and estimate the potential increaseby switching from air to rail on specific routes.Companies can negotiate better rates whenthey present large volumes on routes whererail is in competition with air.

Evaluate the savings potential by comparingaverage ticket prices for rail and air andapplying forecast volumes. Companies shouldalso consider the environmental benefits interms of reduced CO2 emissions.

Update the travel policy to support a railsourcing strategy and promote compliancethrough mandates, internal communicationsand pre-trip approval processes.

Routes withair-railcompetition

Durationof railtravel

Durationof flight

Approx.duration oftravel toand fromairport

Averagerail ticketprice(US$) *

Averageair ticketprice(US$) *

Railmarketshare**

Pricedifferenceof rail vs.air

Paris - Lyon

Amsterdam -Brussels

London - Paris

London - Brussels

Geneva - Paris

Amsterdam - Paris

1:55

2:40

2:35

2:20

3:34

4:12

1:05

0:50

1:10

1:00

1:10

1:15

1:20

1:00

1:40

1:10

1:20

1:30

100

151

605

559

242

306

494

476

591

393

580

693

-80%

-68%

+2%

+42%

-58%

-56%

94%

72%

56%

40%

16%

8%

Figure 8: High-speed rail provides a viable alternative to air on many intercity routes

Source: CWT Travel Management Institute* First semester 2007. Average air ticket prices include taxes but exclude taxi fares to and from the airport.** Rail market share is expressed as a percentage of total travel transactions.

Taking ground transportation further

A well thought-out ground transportation programgoes beyond rail to incorporate car rental,limousine, chauffeur-driven “black car” and taxiservices. To that end, it is important to obtainrelevant information on suppliers and competitiveagreements in the market. It is also good practicefor companies to specifically analyze their groundtransportation data to simulate different marketshare scenarios, strategically manage requests forproposal and ultimately negotiate the mostcompetitive terms with suppliers. To stabilize costs,it is best to negotiate terms that will limit majorprice hikes over the duration of an agreement.This is especially important in a volatile market.

Taking rental car as an example, it is recommendedthat all suppliers respond to the RFP with rates thatinclude a loss damage waiver and a collisiondamage waiver on all rate types. Refueling ratesshould also be negotiated although many travelmanagers are unaware that this is possible. “Soft”benefits are also available. Frequent renters mayreceive extras such as convenient, pre-printedcontracts that save time; meet and greet services;and upgrades. Finally, some rental car companiesare offering bundled contracts that also includeblack car and limousine services.

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Lever Four:Increase policy compliance and optimize demandmanagement

Together, a well-designed travel policy and compliance are the cornerstone of an

effectively managed travel program. Best practices in both of these areas can lead to

savings of on average 20 percent of total travel spend.5 These savings come from policy

and compliance measures in five main areas: advance air booking, restricted airfares,

preferred suppliers, traveler comfort (authorized air class/hotel category) and preferred

booking channels.

Increasingly, as companies work to optimize their travel policy and compliance, they are

also evaluating the reasons why business trips are taken and the return on investment,

as well as the impact on the environment and travelers’ work-life balance. As they

integrate demand management into their travel program, some companies are

introducing alternatives such as videoconferencing in their travel policy.


A well-defined travel policy with clear mandatescan save companies as much as 8 percent oftheir total travel spend. Best practices in travelercompliance, which begin with a preciseunderstanding of traveler behavior, can result inan additional 12 percent savings. CWT calculatedthis savings potential by comparing average marketperformance with best-in-class performance in fivemain areas:

Advance air booking, which is best definedas reservations made at least two weeksbefore departure, represents the greatestopportunity for savings, as discountssometimes exceed 50 percent of the ticketprice.

Restricted airfares can bring average savingsof 24 percent on total air spend, even whenthe cost of changing or canceling negotiatedflexible fares is taken into account. But only 4percent of companies mandate restrictedfares.

Preferred suppliers, when used consistently,deliver lower overall costs than a mix ofsuppliers used on a “best price” basis.Companies pay on average 23 percent lessfor flights with preferred suppliers and 5-14percent less per room night, depending onthe hotel category.

Traveler comfort (authorized air class/hotelcategory) is well covered in most travel

policies and compliance is usually high.Additional savings can be realized byaligning a company’s travel policy withstandards in its particular business sector.This could mean raising the minimum flightduration for business class flights or selectingpreferred hotels in a lower category, as theprice difference between each category isapproximately 20 percent.

Preferred booking channels (on- and offlinebooking through the travel management

company) bring tangible benefits, includinglower prices, increased use of preferredsuppliers, more productive use of travelers’time, and enhanced service and security. CWTfound that although a vast majority ofcompany travel policies mandate bookingsthrough the travel management company,only 40 percent of those who have acorporate online booking tool even refer to it intheir travel policy. Of those that do, only 26percent mandate their use for point-to-pointair travel and 2 percent for hotels.6

Savings from compliance improvements

Savings from policy improvements

Figure 9: Companies can save on average 20% on total travel spend by improving policy andcompliance in 5 main areas


*Note: As restricted fares are typically available in advance, CWT calculates a 1.5% overlap in savings from improved performance in these two areas.This figure is deducted from the total savings, which become 20.6% instead of 22.1%.


21

CWT has observed eight best practices fordesigning travel policies and increasing travelercompliance:

Engage management throughout theorganization. Senior management shouldplay a key role in raising awareness of travelrules, helping overcome resistance to changeand promoting compliance. Four points standout: making senior management supportvisible to travelers, escalating the approvalprocess for exceptions to rules, providingmanagers involved in pre-trip approval withthe relevant information to query or refusenon-compliant bookings, and engaging teamleaders in post-trip follow-up and feedback.

Provide travelers with guidelines that areclear and comprehensive. A policy shouldcover each of the five main areas for savingsand provide complete and precise guidelinesfor travelers to adhere to. Where the corporateculture allows, a travel policy should setmandates. These would include booking air atleast two weeks in advance, using restrictedairfares when available, booking only withpreferred suppliers, stipulating air class andhotel category in conjunction with flightduration and the destination city respectively,and reserving only through the travelmanagement company or the corporateonline booking tool.

Figure 10: Travelers use more restricted fares when the travel policy clearly mandates their useUse of restricted fares by policy requirement

Source: CWT Travel Management Institute, based on 562,751 transactions for 18 clients in 2006.* Eligible bookings are those where a restricted ticket is available. This is based on the assumption that restrictedfares are available in 80% of cases.

Standardize the travel policy regionally orglobally. By aligning rules and processesacross business units and regions, travelmanagers can share best practices and reducetotal travel spend by 12 percent on average.7

Promote compliance with the policythrough communications and training.Best-performing companies make the travelpolicy easily accessible online and available inlocal languages. They also ensure that anychanges to the policy are communicated in atimely manner. Furthermore, the benefits ofcomplying with the policy are clearly spelledout. In addition, all travelers and travelarrangers receive thorough training in thepolicy, as well as the booking processes andtools. Finally, progress reports are issued tokeep travelers informed and motivated.

Drive compliance through point-of-salemeasures. Integrating the policy into the on-and offline booking processes can improvecompliance considerably by directing travelerstoward authorized options. An online bookingtool can even go so far as to filter out non-compliant choices. Offline, companies shouldclearly define the level of involvement expectedfrom counselors when travelers attempt to makenon-compliant bookings. This can range fromproviding advice and compliant alternatives torefusing non-compliant bookings.

Track progress and take corrective action.Travel managers should compare results bybusiness unit or division and share theinformation with team leaders to boostcompliance. It can also be worthwhile toidentify non-compliant travelers and taketargeted action such as a personalized emailreminding travelers of policy rules.Furthermore, non-compliance reports can

indicate areas of the travel program that mayneed to be changed to better meet travelers’needs.

Benchmark industry performance. Althougha company’s travel policy should reflect itsculture and business priorities, benchmarkingcan ensure that a policy remains in line withevolving standards in the same sector. Inaddition, companies can identify furthersavings opportunities or highlight below-average results, including traveler compliance,by tracking their peers’ performance in keyareas of the travel program.

Leverage travel management expertise.Travel management companies have acomprehensive view of the industry and itsbest practices. In addition, they havespecialized professionals and technology tohelp companies more effectively design andimplement their travel policy, as well asmonitor and enforce compliance. By providingmultilingual, Web-based traveler portals thatfacilitate communication of the travel policy,consolidated data reporting that highlightstraveler compliance, and travel counselors whoencourage compliance at the point of sale,they play a significant role. Finally, travelmanagement companies can recommend themost appropriate initiatives to improve policydesign and compliance on an ongoing basis.

Managing demand

Many companies today view demandmanagement as one of the biggest opportunitiesthey have to control or reduce costs withoutcompromising their overall business goals andrequirements. As costs for business travel continueto increase, companies realize that strategicsourcing and procurement may have limits. They


also know that if a travel program is well managedon a continual basis, simply fine-tuning what hasbeen done in the past will not have great impact.Consequently, they are integrating demandmanagement into their thinking and takingtargeted initiatives.

Although demand management helps to controlcosts, it brings more than that to a travel program.By cutting back on travel, companies are helping toprotect the environment and enabling employeesto better balance their personal and professionallives. This is particularly important for attracting andretaining talented people.

Demand management has its roots inprocurement practices. It addresses the drivers ofspend, aligns purchases to business needs andeliminates unnecessary consumption. It alsoapplies change management principles to adaptbehavior.

Business travel is essential to building relationshipsand driving growth. Nonetheless, some businesstrips can be replaced with alternative means forreaching the same objectives. Thanks tosignificantly improved technology, Web-, video-and teleconferencing have become viablealternatives in some cases.

Integrating demand management into a travelprogram requires:

A structured approach with processes andtools to foster sustainable results

Robust data and fact-based information todisclose spending, understand what drivesdemand, support decision-making, monitorperformance against established goals, optimizebenchmarking, and communicate effectivelythroughout the organization

Clearly communicated and well-implementedalternatives to travel such as Webinars andvideoconferencing

Accountability and ownership at all levels ofthe organization to increase cost awareness,responsibility and commitment

Change management to reduce resistanceand permanently instill new practices

Reducing consumption is at the heart of demandmanagement. To that end, companies are askingthe following questions as they pertain to businesstravel:

What are the objectives of a particularbusiness trip? How will return on investmentbe measured?

Can the objectives be achieved throughmeans other than travel?

What is the added value of taking this trip?

Who needs to travel to reach the statedobjectives?

Can we cut down on the number oftravelers and still meet our objectives?

How can we reduce the frequency of travel?

How can we integrate demand managementinto our travel policy, approval processes,performance measurements and at thepoint of sale?

When demand management, which focuses onbetter understanding the rationale behind businesstrips and reducing unnecessary travel, is coupledwith strategic sourcing, which emphasizes gettingthe best price from suppliers for specified productsand services, bottom-line savings and costavoidance result. It is no wonder the practice hasbecome an increasingly important lever to effectivetravel management.

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Companies typically take at least three years toconsolidate major components of their travelprogram over a geographical area representingat least three-quarters of their total travel spend.The pace at which they work and the path theytake are often determined by their specificfinancial situation, readiness for change,corporate culture and/or organizational structure.The primary benefits of consolidation are theresult of certain key initiatives:

Companies reallocate marketshare to airsuppliers to earn volume-based discounts.Doing so involves a four-pronged approach:

Consolidate air data. Tracking and consoli-dating data from around the world enablescompanies to identify larger volumes ofbusiness with each airline for significantfront- and/or back-end discounts.

Work with a limited number of preferredsuppliers. This increases the volumeallocated to each airline and the resultingdiscounts. To this end, companies select alimited number of preferred airlines that

together will maximize coverage of citypairs while minimizing supplier overlap. Onan international level, these companiesleverage bi-directional traffic (i.e., originatingon either side of common city pairs) with asingle airline.

Figure 11: Savings of 20% mainly come fromstandardization of travel policy and processes,and concentration of sourcingBreakdown of total savings

Lever Five:Further consolidate travel programs

As companies expand their business activities around the world, they are increasingly

consolidating their travel program. This means converging virtually all components on a

local, regional or global basis. To that end, they are leveraging total travel volume and

concentrating sourcing with an optimal number of suppliers, as well as standardizing their

travel policy, processes and tools. They are also working with one travel management

company in all regions of the world to accompany them in this effort. The benefits can

be measured in terms of savings that average 20 percent of total travel spend, as well as

enhanced service and security.8

8Global Horizons: Consolidating a Travel Program, CWT Travel Management Institute (2007)

Source: CWT Travel Management Institute, based on 49 respondents

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Some companies also aggregate volumeby setting up a hub system for long-haulflights, sending traffic through specificdestinations whenever possible.

Seize pricing opportunities proposed bychallenger airlines. The advantages of doingso are two-fold. In addition to leveraginglower prices, terms with preferred airlines canbe more easily challenged. Companiesallocating more volume to challengers mustconsider, however, that this may erode back-end rebates from preferred airlines.

Manage the trade-offs. Reallocating marketshare results in two main trade-offs. First,preferred suppliers may reduce front- and/orback-end rebates if volume thresholds are notmet. Therefore, companies must strike abalance between the volumes allocated toeach supplier on each route, taking rebatethresholds into account. Second, companiesmust balance market share reallocationtargets with traveler needs and preferences,including scheduling, direct versus connectingflights and membership in frequent flyerprograms.

Companies consolidate their hotelsourcing. Volume-based discounts also drivehotel savings. Unlike air sourcing, however,discounts are not based on total volumeallocated to a particular chain of hotels, but onthe number of room nights booked annually ateach property. The frequency and size ofdiscounts often depend on local supply anddemand dynamics, as well as the hotelcategory. Luxury hotels tend to offer larger,more frequent volume-based discounts thanstandard-category properties. Successfulconsolidation of hotel sourcing focuses on fourmain initiatives:

Track and consolidate data. Hotel spenddata for each market should come from avariety of sources: travel managementcompanies, credit card providers, expensemanagement tools and hotel suppliers.

Orchestrate negotiations. Requests forproposal in all targeted geographical zonesshould include hotel chains andindependent properties. When workingwith hotel chains, companies shouldstreamline RFP distribution and collectionthrough a single point of contact, eventhough pricing decisions will take placemainly at a property level. Building strongrelationships on a local level is essential forbetter negotiations with hotel chains andindependent properties alike.

Reduce the number of local suppliers.Given the importance of volume, it isadvantageous for companies to rationalizethe number of preferred hotels in each city.The aim is to increase bargaining powerper property without compromising theavailability of well-located, suitable accom-modations for travelers.

Concentrate business from outside thehome market. Increasing room nights andvolume-based discounts per property canbe achieved by pooling business fromincoming countries and regions topreferred hotels.

Companies consolidate their car sourcing.Volume-based discounts apply to rental carsourcing as well. While car rental companiesoffer global service contracts to corporateclients, they negotiate rates mainly at a locallevel. Furthermore, in light of the limitednumber of global leaders in the industry, mostcompanies allocate more than three-quartersof their car spend to the handful of contractorsoperating worldwide.

Companies take a comprehensive approach.In addition to their sourcing, successfulcompanies consolidate most of the otheraspects of their travel program, including theirtravel management company, service levelagreements, tools and processes.

Establishing solid foundations is essential.Several building blocks must be put in placefor consolidation to succeed:

Three critical components. The first twosteps travel managers tend to take aredata consolidation and travel policystandardization. As already discussed, dataconsolidation is essential to developing asourcing strategy. Clearly defining andenforcing the rules travelers must complywith is equally important for realizing travelmanagement objectives. The third criticalcomponent for success is global performancemonitoring. A standardized travel programscorecard tracks several indicators, includingaverage ticket price and room rate, servicelevel agreements, online adoption, air andhotel non-compliance, and savings on fullversus negotiated airfares.

A global travel management company.Having one travel management partneraround the world plays a key role inconsolidating data, standardizing travel

policy, monitoring performance, optimizingsupplier sourcing, streamlining operations,managing change, and enhancing serviceand security. Consequently, companiestend to select a primary travel managementcompany early in the consolidationprocess. They also build partnerships withglobal credit card providers to track carddata and offer complementary servicessuch as insurance to travelers.

Project management fundamentals.Consolidation is a complex exercise.Therefore, the fundamental rules of projectmanagement must be applied from thestart. Support from top management iscrucial for mobilizing resources in differentcountries, cooperating effectively withbusiness unit managers in a decentralizedenvironment and overcoming localresistance to change. A project roadmapwith clear objectives and milestones is alsoneeded. In addition, adequately staffedtravel management teams at the regionallevel are often appointed to support theglobal travel manager.

Consolidation is a balancing act. Whilecompanies approach consolidation in acomprehensive manner, they need to lookat travel program components individually todefine the appropriate level of consolidation,be it global, regional or local.

Global consolidation makes sense for amajority of program components: dataconsolidation, sourcing, travel policy,supplier service level agreements, keyperformance indicators and security.

Some components are not suitable forglobal standardization and are bestmanaged locally. This is the case for

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high-touch services, which are culturallyspecific. This is also true for pre-tripapproval, which is widely practiced inEurope, but tends to be replaced by post-trip audits in some countries, includingthe United States. Expense managementis often handled on a local level as well.

Other components require a moreregional approach. Suppliers’ offerings,for example, are not always available on aglobal level. Notably, no single onlinebooking tool currently works best in everymarket, given limited technical features insome countries. Consequently, manycountries take a best-in-market approach.

Full program consolidation is an ongoing processthat requires constant fine-tuning and continuousimprovement. Companies must also make acontinuous investment in their program tomaximize effectiveness. Therefore, potentialbenefits must cover not only the initial outlay butongoing costs.

Better safe than sorry

Companies have a duty of care to do what isreasonably practical to protect the health andsafety of their employees, both in the workplaceand when they are traveling for business. Thishas become a legal and a moral obligation.

Successfully managing the risks associated withbusiness travel requires proactive measurescoupled with effective execution of a well-designed Disaster Response Plan. To that end,travel managers must be part of a cohesive crisismanagement team composed of experts fromhuman resources, IT, the legal department, riskmanagement and medical services. They mustalso work hand in hand with their travelmanagement company to keep travelers wellinformed and quickly locate and assist them inthe event of an emergency.

Managing travel-related risks calls for the followingfundamentals:

Thorough planning is key. Specific policiesand procedures related to safety and securitymust be clearly defined and continuouslyupdated. This might mean banning high-risktravel destinations, mandating the use ofpreferred suppliers with confirmed safetyrecords, limiting the number of employeeson the same flight and/or implementing pre-planned evacuation procedures in the eventof an emergency. Travelers, travel bookersand travel counselors at the point of salemust be well versed in the policy to makemore responsible decisions.

Destination information helps preparetravelers. Providing them with relevant, pre-trip information based on a specific itinerary

Lever Six:Address security needs and corporate socialresponsibility

World-class companies do not wait for disaster to strike before integrating risk

management into their travel program. They continuously strive to reduce the frequency

and severity of incidents and work hard to implement effective response and recovery

procedures that will enhance traveler protection, maintain productivity and limit liability.

These companies are also increasingly conscious of their corporate social responsibility

(CSR). Consequently, they are managing their economic, social and environmental

performance simultaneously to achieve good corporate citizenship and long-term

sustainability that goes beyond financial performance. Effective travel management is

contributing to this effort, particularly in the area of environmental protection.

enables travelers to assess the threats andhazards in a given country and take thenecessary precautions. Pre-trip briefings fortravelers going to high-risk destinations areparticularly useful. Understanding health issuesand immunization requirements beforehandfurther enhances protection. Under certaincircumstances (e.g., an epidemic illness),relevant post-trip information also helps toprotect travelers.

A Disaster Response Plan must beprepared. Travelers must know what to do inthe event of an emergency. To that end, theDisaster Response Plan must be widelycommunicated. In the event of an emergency,it is best when travelers can call a single number24/7, including holidays, for information and/orassistance pertaining to any situation they are in.To ensure the plan works well, practice drillsshould be organized periodically and the planmodified if necessary.

Tracking travelers and notifying themimmediately buys precious time in anemergency. Companies with a mature travel

risk management program stay on top ofbreaking news that could be of danger totheir employees. In the event of anemergency, their travel managementcompany uses proprietary booking data toimmediately pinpoint and identify travelerswho may be affected. This is why monitoringcompliance with travel policy, including theuse of preferred booking channels, is soimportant. These companies, in conjunctionwith their travel management partner, havealso implemented a formal notificationprocess that enables them to communicatewith travelers day and night and provideassistance worldwide.

Feedback is needed after every emergency.Even the most mature travel risk managementprograms can be improved. Companies mustdetermine if the situation could have beenavoided in the first place and/or betterhandled. If so, risk mitigation strategies,policies, plans and procedures must bereevaluated and modified accordingly.

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Corporate duty of care

Implementing a proactive travel risk management program can be a lifesaver both forindividual employees and the company as a whole. In April 2008, the CorporateManslaughter and Corporate Homicide Act 2007 came into effect in the United Kingdom.While it only applies in the U.K., any work-related deaths that occur there will be consideredfor prosecution, regardless of whether an employer is registered there.

Under the law, a company may be found guilty, and liable as a whole, of corporatemanslaughter if senior management is found guilty of playing a significant role in the decision,management or organization of the activity that causes an individual’s death in the U.K. andamounts to a gross breach of a relevant duty of care. The maximum penalty is an unlimitedfine.

“Duty of care” is defined as the legal responsibility of an organization to do everything“reasonably practical” to protect the health and safety of employees. Companies must providea safe work environment (including the hotels and airlines they use), inform and instructemployees of potential hazards (e.g., high-risk destinations), and disseminate health andsafety advice.

Sustainable business travel

Effective travel management and CSR are goodbusiness partners. Environmental, social andeconomic concerns are often addressed in awell-managed travel program.

Responsible procurement of business travelproducts and services has become increasinglyimportant as more and more companies chooseto work with suppliers who have implementedtheir own CSR initiatives over those who have not.

Requests for information and requests for proposalshould take not only economic goals but CSRconsiderations into account. Once a supplier hasbeen selected, they should be regularly audited toensure continued adherence to CSR policies andongoing development of sustainable products andservices. Many companies have also made

supplier diversity and/or the use of local suppliersa cornerstone of their CSR program.

Protecting the environment from the potentiallydevastating effects of climate change hasbecome a priority for many companies. Here,effective travel management can play animportant role. Where possible, many companiesare striving to reduce their carbon footprint byproposing rail as an alternative to air travel fortrips under three hours in length. Carboncalculators at the point of booking help themsensitize travelers to the carbon dioxide (CO2)emissions associated with various forms oftransportation. Other companies are encouragingtheir travelers to take direct flights since they areless polluting than connections.

Many of these same companies are seeking“green” hotels and organizing more environ-

mentally friendly meetings and events. Stillothers are cutting back on business travel andusing videoconferencing and Webinars whenthey are equally effective. Oftentimes, whencompanies have reduced their CO2 emissions asmuch as possible, they turn to carbon offsettingprograms to neutralize the impact.

Enhancing traveler safety and security respondsto CSR concerns as well. Furthermore, whenbusiness travel and social initiatives such asemployee training or volunteer activities arecombined, companies enhance their image as agood corporate citizen.

Sustainable checklist

Today, most companies can develop andimplement a responsible business travel strategyby adhering to some basic principles:

Identify opportunities for responsiblebusiness travel and adapt the travel policyaccordingly

Establish key CSR performance measuresthat can be easily monitored

Use questionnaires or requests for informationto better understand current and prospectivesuppliers’ CSR initiatives, products andservices

Consider diversity when choosing suppliers

Reduce CO2 emissions as much as possiblebefore offsetting

Encourage rail travel where appropriate forincreased environmental protection and amore productive work environment

Weigh the environmental impact of directflights over connections

Use “green” hotels and environmentallyfriendly meeting facilities that are effectivelymanaging natural resources

Hold meetings and events in less distantlocations

Work with rental car companies whose fleetincludes hybrid vehicles for better fuelconsumption; prohibit vehicle upgrades

Consider the use of videoconferencingand/or Webinars as an alternative to certainbusiness trips, meetings and events

Mitigate risk with a well-designed and well-implemented traveler security program

Effective travel management has an importantpart to play in a company’s overall CSR program.The “4Ss,” savings, service, security andsustainability, respond to needs for soundfinancial performance, employee well-being anddevelopment, respect toward all internal andexternal stakeholders, environmental protection,and civic-minded behavior in the localcommunity and the world at large. Consequently,CSR in business travel must be addressed in aconcrete fashion with performance metrics forcontinuous progress. The future is now.

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Companies with a well-managed meetings andevents program have established concretepolicies; centralized their organization, oftenintegrating meetings and events with travelmanagement; negotiated preferred suppliercontracts; consolidated data; applied Web-basedtechnology from registration to payment; andstreamlined their payment and reconciliationprocesses. Post-event evaluation has helpedthem to increase future quality and effectiveness.The overall results are tangible with savings of upto 20 percent.

The best practices these companies employform an end-to-end loop that is worthhighlighting:

Meetings and events policy. A clearlyspelled-out, widely communicated globalpolicy for meetings and events that is aligned

with the travel policy is the first crucial step.Terms must cover at least 80 percent of allmeetings and events held throughout theorganization, and professional roles andresponsibilities need to be clearly defined. Apre- and post-event approval process tooptimize demand management anddetermine both the necessity of a face-to-face meeting or event and the estimatedreturn on investment should be included.The buy-in of senior management isessential, as is monitoring and enforcingcompliance.

Centralized organization. Building acentralized team of specialists who haveexperience in procurement, as well asmeetings and events planning andimplementation, and integrating them withthe company’s travel management team is

Lever Seven:Integrate meetings and events into the travel programto control and optimize the related spend

In most companies, meetings and events remain uncharted territory for savings, although

spend often represents 25-40 percent of a total travel and entertainment budget. There

are several reasons for this. Meetings and events run the gamut from five-person training

sessions to multi-million-dollar trade shows, with a host of large and small gatherings in

between. Frequently, procurement and planning are decentralized, with each department

or business unit overseeing its own projects. As a result, purchasing is fragmented and

few if any contracts with preferred suppliers exist. Furthermore, tracking spend is virtually

impossible. More and more companies, however, are reversing the tide and applying the

principles of effective travel management to their meetings and events.

key to consolidation and savings. Roles andresponsibilities must be well defined andrespected throughout the organization, asthis team will manage internal and externalresources and execute planning for virtuallyall meetings and events.

Supplier sourcing and negotiations.Standard procurement practices and toolsapply to meetings and events, as they do totransient travel. A limited number ofpreferred suppliers across all spendcategories and geographies—air, hotel,ground transportation, catering, audiovisualequipment, entertainment/production, etc.—should be identified to optimize negotiationsand save the excessive time and moneyspent when events are negotiated on anindividual basis. Travel and meetings andevents volume should be consolidatedwherever possible for best leverage withsuppliers. Furthermore, since better managingenvironmental issues is often related tosuppliers’ own policies and practices, relevant“green” criteria should be included in requestsfor proposal.

Online registration and booking. Likeonline booking for transient travel, Web-based tools for registration and booking helpto ensure that attendees of meetings andevents are complying with policy and usingpreferred suppliers. Individual preferences orrequirements (e.g., dietary restrictions) arealso captured. By eliminating manualprocesses, transaction costs are significantlyreduced. Locating participants in the event ofan emergency is also facilitated. Web-basedtechnology should also be used to manageplanning, budgeting, purchasing, attendance,payment and performance measurement.

Streamlined payment/reconciliation andconsolidated data. A single, centralizedpayment mechanism for all spend categories,including participants’ expenses (minusincidental charges), results in more completeand accurate data for better planning, sourcingand compliance tracking. Reconciliation ofsupplier invoices with actual expenditures isalso more efficient. Finally, processes thatensure payment is made directly to suppliersrather than through an intermediary lowerstransaction overhead and acceleratespayment, which enhances relationships withvendors.

Post-event evaluation. Evaluations help togauge the benefits of an event versus the cost.To that end, criteria that determine the value ofthe content are especially relevant. Seekingfeedback from suppliers also helps to improvethe quality of future events. All internalstakeholders should receive evaluation resultsto optimize the effectiveness of futuremeetings and events.

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Having optimized their managed travel programover the last few years, many companies areturning their attention to meetings and events. Theywill acknowledge that the process involves somehurdles, including significant resistance to change.Organizing meetings and events traditionally bringswith it a sense of ownership and pride that many

internal stakeholders have difficulty relinquishing.Nonetheless, persistence pays off. A well-managedmeetings and events program brings greater valueto the organization as a whole and to individualparticipants.

Early Advanced

M&E strategy Local strategy/vision Global/regional strategy

M&E policy& compliance

No distinct M&E policy M&E policy structuredand compliance monitored

Organization Decentralized and dispersedSpecialists centralized and

integrated in the travelmanagement team

M&E processes& technology

Various processes,low technology usage

Streamlined processesand Web-based technology

Sourcing/suppliers

No preferred suppliers,spot buying

Preferred suppliers,contracts and leveraged negociations

Data capture/monitoring

Data not capturedor captured inconsistently

Data consolidated, analyzedand used for action

Evaluation Superficial to none Relevant and usedfor improvement

Figure 12: Key indicators of meeting and events program maturity


In most companies, the goals of an effectivelymanaged travel program mirror overall businessobjectives. To monitor and drive progress,companies rely on:

Well-defined performance indicators.Performance indicators must be carefullydefined, measurable and in alignment witheach of the goals of the travel program.Above all, they must provide actionableinsights that will lead to desired results. Tothat end, performance indicators should beregularly monitored against program goalsand benchmarked against market trends, aswell as the performance of similarly sizedcompanies in the same business sector withcomparable travel spend and corporateculture.

In general, performance indicators cover air, hoteland ground transportation spend, as well asservice levels and traveler behavior. Environmentalindicators are increasingly monitored as well. It isthe job of travel management professionals tospecify those indicators that are most relevant totheir travel program and their company as a whole.In addition to travel spend per category, they mightinclude:

Advance air bookings

The use of restricted airfares versusfleixble fares

Average ticket price and room rate yearover year

Key city pairs per country and/or region

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Lever Eight:Develop executive dashboards and actionableperformance measures

If you cannot measure it, you cannot manage it. So goes an adage familiar to travel

management professionals. Without relevant performance indicators and corresponding

data that is consolidated and delivered in a timely, accurate and easy-to-use fashion, it is

impossible to evaluate and optimize the effectiveness of a travel program. Furthermore,

to engage top management and business unit/department heads in the optimization of

a travel program, the data that is reported must be adjusted to reflect their individual

needs and concerns and be comprehensible at a glance. The task of effectively capturing

and presenting data is complex. Multiple suppliers around the world use different

standards and formats. Merging information from different sources increases complexity.

The challenge is compounded by non-compliant travelers who book outside of preferred

channels, which results in travel spend that is unaccounted for.

Air and hotel supplier market share

Class of air service and category of hotelroom

Missed hotel bookings

Online adoption

Compliance with preferred bookingchannels (i.e., the travel managementcompany and the corporate onlinebooking tool)

On- and offline transaction fees

Touchless transaction rates

Compliance with preferred suppliers,including the corporate credit cardprovider

Missed savings

Cost avoidance

Traveler satisfaction

Carbon dioxide emissions

Integrated data and reporting. Data shouldbe integrated from a variety of sources—thetravel management company, credit cardproviders, online booking tools, suppliers—toprovide the most complete picture of travelprogram performance.

Good data reporting provides the informationfor sound analysis, actionable insights andconcrete initiatives that drive progress. Well-designed dashboards integrate graphs, piecharts and other visuals in a single page,allowing managers to step back from thedetails and quickly and accurately identify thekey trends and relationships that characterizethe travel program.

Dashboards also play a key role in internalcommunications to C-level executives andbusiness unit/department heads whomanage budgets and corporate travelers.They are particularly useful for comparingperformance among business units anddepartments and indicating where individualprogress is needed.

They can also be used to communicate withtravelers to encourage new behaviors thatwill contribute to the optimization of thetravel program.

In all of these cases, the information that isreported must be carefully targeted and easyto understand for non-experts of businesstravel management. Providing too muchinformation is usually counterproductive anddiscourages focus on what really matters.

Relevant, easy-to-use dashboards.Effective dashboards share the followingcharacteristics:

They are easy to interpret and actionable.

They are customizable with top-line datareflecting the objectives and areas ofconcern most important to the user.

They track performance against goals.

They have easy and intuitive drill-downcapabilities, enabling users to movequickly from high-level data to supportingdata and reports for each graph.

They are easily adjusted so performanceindicators can be changed.

They are located in one place and areeasily accessible.

They can be viewed in multiple languagesand currencies.

Travel management companies play a key role inidentifying and monitoring relevant performanceindicators, as well as consolidating, delivering andanalyzing the right data at the right time to facilitatedecision-making and implement corrective action.

This is one of the key reasons global companiesare increasingly consolidating their travel programwith one travel management partner worldwide.

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Divisions 7-day advancepurchase

Self bookingadoption

Preferred hoteladoption

Averageticket price

Combinedair-hotel booking

Missed Q2savings

vs. compliancegoals

(By numberof transactions)

CurrentQ %

Trend fromlast Q

CurrentQ %

Trend fromlast Q

CurrentQ %

Trend fromlast Q

CurrentQ

Trend fromlast Q

CurrentQ %

Trend fromlast Q

Division A

Division B

Division C

Division D

Division E

Division F

Division G

Division H

Division I

Total

Performance up on previous quarter

Performance down on previous quarter

At or above goal

Approaching goal

Below goal

Goal 70% 60% 32% US$475 70%

74%

60%

35%

20%

18%

39%

28%

23%

38%

35%

43%

52%

51%

48%

70%

48%

63%

28%

29%

13%

US$602 US$1,313,230

US$4,636,530

US$791,424

US$923,739

US$878,537

US$319,435

US$202,143

US$115,353

US$85,821

US$6,847

US$663

US$879

US$995

US$693

US$588

US$610

US$587

US$540

75%

81%

46%

57%

70%

76%

68%

80%

92%

54%

79%

67%

63%

68%

67%

48%

23%

30% US$676 63%53%

Figure 13: Sample dashboard for reporting on compliance and savings

For more information on how the experts atCarlson Wagonlit Travel can help your companysuccessfully optimize its travel program, pleasecontact your CWT sales or program manager oremail us at [email protected]

All research published by the CWT Travel Management Instituteis available on

www.carlsonwagonlit.com

Effective travel management is an ongoing process that is within the reach of any companycommitted to balancing cost control, traveler safety and well-being, and sustainability. To that end,proven practices must be adhered to and performance continually monitored to derive the fullestvalue from a travel program. The eight key levers described in this booklet provide a robustframework from which to work and succeed.

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