In the wake of COVID-19, we’re seeing companies look for new ways to reduce costs for their business.
Travel and expense is often viewed as a top cost item that businesses can quickly dial back when the economic climate starts to soften. Such an approach can impact business performance in a positive way with immediate savings on the bottom line. In fact, 31% of businesses have already predicted a decrease in travel budget for 2021, according to FCM’s State of the Market Report.
However, when business travel is a core contributor to revenue growth and retention, reducing travel has a negative impact. Therefore, all businesses are careful to temper the duration for reduced, or stopped, business travel to prevent a fall in income.
That said, we’re taking a look at both traditional and new approaches that can help deliver savings to your travel program at a time when maximizing savings is critical.
Traditional cost saving measures
Typically, clients look to their travel management company (TMC) to leverage preferred partnerships to drive savings.
Through strong relationships with airline, hotel, and car suppliers, TMCs can deliver savings for an organization through their negotiated rates. In addition to flat discounts, suppliers typically provide TMCs with a range of programs like waivers/favors and fare matching that helps clients save even more.
Identifying policy leakage is another common cost saving measure. Despite your TMC and organization’s efforts to keep traveler booking within policy, some bookings still go astray, with travelers booking through their own preferred channel or choice of supplier. When this happens, gaps start to appear in your data and your reporting abilities.
When leakage is minimal, there is better visibility on cost control.
Demand management as a cost saving measure
While traditional measures are still relevant and valuable in helping save your company money, organizations across the world are continuing to feel the challenges brought on by COVID-19, and therefore are looking towards demand management as an additional cost saving measure.
In business travel, demand management refers to the costs savings delivered when the volume of air travel, hotel and car hire being booked is re-evaluated and adjusted by the organization to save money. Simply put, the less trips booked, the more money a company will save.
If this is a route your organization is considering, there are ways to implement this strategically while still reaping the benefits business travel brings to your organization. For example, if you typically find yourself sending 4-5 people to conduct a sales pitch, consider sending 1-2 for the time being.
By carefully considering your business options and priorities, demand management can be a strategic way to deliver additional savings to your program.
How FCM can help provide even more savings
As COVID-19 continues to challenge the business travel industry, FCM is committed to working with our clients to help them navigate the new world of business travel and deliver savings.
Research from our State of the Market Report suggests that 26% of businesses are still planning to return to the same pre COVID-19 levels for domestic travel in 2021. Therefore, we want to help you unlock even more savings for the year ahead.
By evaluating the different components of your program, we’ll take a look at:
- Reviews to your travel policy: We can provide consulting on your travel policy, analyzing trends and making suggestions for changes that provide cost savings and fit within your company culture.
- Travel booking process efficiency: We can help improve travel booking process efficiency with strategies to increase online adoption, saving you time and money.
- Strategic supplier negotiations: We know it can be extremely time-consuming to develop effective airline and hotel programs that continue to drive value for your company and to navigate the many ways to measure, monitor and benchmark your program. That’s why FCM offers specialty consulting to analyze your current supplier contracts and then negotiate or re-negotiate for greater savings and increased amenities.
- Client travel patterns, demand management and cost avoidance: Your FCM Account Manager can work with you to assess your travel patterns and suggest specific strategies, such offering alternatives to air travel, like rail or car rental in certain corridors, or combining/extending trips to lessen frequent travel and expense.
- Pre-trip approvals (FCM Approve): Our pre-trip approval platform lets your travel manager ensure that travelers and travel arrangers are following policy. We will tailor the entire pre-trip approval process for your needs.
- Monitoring and measuring your results: Through frequent reviews of your travel program, supported by robust reporting from our Clientbank platform, we will share the results of your cost-saving efforts and re-evaluate if needed.
In line with our tailored approach, we never impose strategies or approaches on clients just because they have worked for others in the past.
We’re committed to evaluating your specific travel trends, company culture, unique challenges and strengths, and other features of your program so that we can design and implement the most effective strategies to achieve your goals – ensuring all your savings opportunities have been explored.