How to get the best value out of business travel

For businesses there are two ways to book and manage travel. Do it all in-house, which we call an ‘unmanaged travel program’, or pay a travel agent to manage it for you, which the industry calls 'managed travel'.

"SMEs book an average of 30 trips per year and each takes approximately six hours of an owner-operator or employee’s time."
Darrin Grafton, CEO, Serko

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Most, if not all, large corporate organisations have a managed travel program because it saves them money and helps them keep control over spending. 

But just because you aren't a big business spending millions each year on travel, doesn't mean you can't take some of the learnings and principles from managed travel and apply them to your business.  

A survey undertaken by TNS Research indicates SMEs are wasting a huge amount of time by doing it all in-house; it actually equates to approximately 81 million hours a year.

HOW IS THAT POSSIBLE?

Unlike major corporates, small businesses don’t have access to the purpose-built online booking tools introduced nearly 10 years ago.

Until now there’s been no option but to pay a premium for travel agent bookings or contend with the hassle of time-consuming booking processes, less-than-ideal flight times and seat choices, juggling multiple itineraries, doing travel expenses, keeping track of receipts, and managing flight changes and delays or increased travel costs themselves.  

SMEs book an average of 30 trips per year and each takes approximately six hours of an owner-operator or employee’s time (booking, managing itinerary etc). Add to this approximately 25 per cent of trips change at least once before or during the trip - it’s clear why over a third of businesses believe booking processes need to be improved.

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So if you are interested in getting more bang for your travel buck then follow these seven principles.

• SHOP AROUND

Most businesses operating unmanaged travel programs basically behave like consumers, using the same websites people booking their holidays book (Expedia and Booking.com typically).

You'll be surprised to find out there is a big price discrepancy between the different suppliers.

• KNOW THE DIFFERENCE BETWEEN INSTANT PURCHASE, REFUNDABLE AND PAY ON DEPARTURE HOTEL RATES

Hotels often sell the same room at a variety of different price points depending on the level of flexibility on offer. The cheapest rates are typically inflexible (no refunds, cash up front, no cancellation).

They're fine if you're travelling tomorrow but if you're booking further out and there's a risk the trip might change, then look for Pay-on-Departure rates, or at the very least, refundable rates. You pay a bit more, but you will save in the long run.

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• BOOK FLIGHTS AND HOTELS AT THE SAME TIME WHENEVER YOU CAN

Hotels offer something called 'package rates' which means they charge a lower room rate if there's a flight being sold as part of the package - the savings can be great.

Buy on sites which offer flights as well as hotels. Be aware package rates can sometimes be quite restrictive, so check the Ts and Cs – terms and conditions - carefully before you commit. 

• DEFINE A CLEAR TRAVEL POLICY AND ENFORCE IT

A Travel Policy is simply a set of rules determining what people can and can't book. For example, most large businesses have a room night cap of $A300 for major cities and $A200 for regional cities.

This stops people (who should know better) booking the penthouse suite. It's basic stuff but applied with vigour it can start to drive real savings by shaving $A50 here and $A100 there.

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• USE AN APPROVAL PROCESS

An approval process is simply a mechanism ensuring someone eyeballs and approves all of the expenses associated with a business trip - before any money actually gets spent.

Most businesses say they have a process but very few actually enforce it and as a result often end up paying the price.

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• TRUST THE TRAVELLER

For a lot of businesses, the answer to the policy and approval question is to funnel all bookings through a central administrator or Office Manager. This works to a point but it's not really the right answer as, more often than not, there's double handling involved.

The traveller does the searching and the booker does the booking and the net result is 1.5 or even double the time investment. With the right policy, the right technology and the right approvals process, travellers can and should have the freedom to book themselves.

• USE TECHNOLOGY WHEREVER YOU CAN

Technology can solve a lot of the problems associated with travel management, and the right technology can drive huge cost savings and productivity gains for businesses.

Large organisations learned this a long time ago, which is why they insisted their managed travel partners provide them with online booking systems and mobile apps which addressed all of their travel management needs.

This technology has been out of reach for small businesses for far too long.

Darrin Grafton is CEO at Serko, a global corporate travel consultancy and booking company.

DISCLAIMER: ANZ is a client of Serko.