New research by CWT highlights opportunities for additional savings and further proves the value of managed travel programs
AMSTERDAM – A report published by the CWT Travel Management Institute demonstrates how companies with even the most mature managed travel programs still have opportunities to increase savings—often by 10 percent or more.
Available on i-pad , Mastering the Maze: a Practical Guide to Air and Ground Savings, takes travel managers on a tour of savings opportunities in 20 areas, ranging from program fundamentals, such as concentrating volume on preferred suppliers, to new solutions including negotiating fuel surcharges and ancillary fees. Accounting for approximately half of the total travel budget, air represents the largest spending category in nearly all travel programs. As market conditions evolve, companies face new challenges and opportunities in optimizing what they spend on air travel.
Grégoire Boutin, the CWT Travel Management Institute senior consultant in charge of the Study, commented: “This research looks at the areas of the travel program that are typically the most mature, such as air travel and the least mature, such as ground transportation. It’s interesting that both offer sizeable savings opportunities that are very often underexploited.”
CWT’s new top tips to help companies pick up missed savings:
- Negotiate a reduction or waiver of airline ancillary fees. These additional charges, such as baggage fees and on-board food and services, represent an estimated 6 percent of a company’s air spend. Only 55 percent of travel managers track how much they spend on this.
- Negotiate with carriers for a refund or back-end discount on fuel surcharges. These can be awarded at the end of the year based on the amount of business that a company has given to the airline over the year. Representing a considerable 7-12 percent of air spend, fuel surcharges appear increasingly disconnected from actual airline costs, rising at twice the rate of oil prices since April 2011.
- Carry out regular Global Distribution System (GDS) audits to check that negotiated airfares have been loaded correctly. In one case study, 6 percent of negotiated airfares had been loaded incorrectly or late – this means substantial missed savings if travelers are booking incorrect or non-negotiated fares.
- Monitor booking class availability on top routes per carrier, cabin class and the number of days before departure so that travel managers can ensure that negotiated conditions are actually available. Half of the travel managers surveyed already successfully use this data to ensure they get the right level of availability for the fares they have negotiated – fare availability is an important but often neglected aspect of program performance. Buyers can monitor availability per carrier, route, cabin and booking window for best results.
- Encourage and educate travelers on the importance of booking as early as possible. Advance booking still brings significant savings, especially on international economy fares. Seventy five percent of travelers book less than 14 days in advance – this represents a considerable opportunity for further savings. Read more.
- Pay more attention to savings on car rentals, which represent on average 7 percent of the overall travel spend. Companies that have focused on car rentals have saved 6-24 percent, varying with factors such as volume, region and level of maturity. Read more
Vincent Lebunetel, head of CWT Solutions Group for Europe, Middle East and Africa, added: “We see how important it is to negotiate on the basis of total cost—beyond basic airfares, car rental rates or room rates. Suppliers are generally open to negotiations on extra cost items such as ancillary fees and this can make a huge difference to savings in this dynamic industry.”
Read ” Three Questions to Vincent Lebunetel, head of CWT Solutions Group EMEA“, to learn more about the challenges around air sourcing and policy.
