Pressure to Cut Costs and Rising Ancillary Fees Force Companies to Reprioritize Travel Management, According to a New Survey of Travel ManagersAlthough 75% of business travelers use smart phones, only 25 percent of travel managers report that smart phones and travel apps are improving their organizations’ travel functions
Corporate travel managers are under pressure to cut costs, improve compliance and better leverage mobile technology, according to a new survey conducted at the 2011 Global Business Travel Association (GBTA) Convention by Rearden Commerce. Top survey findings include:
- Mobile Technology: 63 percent of travel managers believe mobile technology can help a company reach its managed travel goals, yet only 25 percent of companies are realizing the business travel benefits of mobile today.
- Online Booking Compliance: Two-thirds of respondents reported that employees at their companies are less than 50 percent compliant with online booking policies.
- Evolving Responsibilities: 30 percent of travel managers are now managing other procurement categories in addition to travel.
- Cutting Costs: 60 percent of travel managers said their organization’s top priorities are cutting costs — citing more effectively managing ancillary fees as a new area of focus.
With more suppliers in the travel ecosystem implementing ancillary fees, corporate travel managers are trying to figure out how to handle rising costs. Of those travel managers surveyed, 42 percent believe the best strategy is to reduce non-essential travel – but for some companies, reducing travel isn’t an option. Thirty-four percent suggested cutting back in travel categories, but those surveyed were divided on where – outside of the big three (air, rental car and hotel) to cut. Of those surveyed:
- 46 percent said meals;
- 28 percent said ground transportation; and
- 17 percent said entertainment.
Mobile technology was another hot topic at GBTA – highlighted at multiple education sessions for its ability to help companies overcome the new complexities of business travel. With smart phone usage among America’s frequent business travelers continuing to climb – to 75 percent according to PhoCusWright’s Traveler Technology Survey 2010 – more companies are planning to rely on apps to facilitate business travel in the year ahead. Of those surveyed at GBTA, 63 percent believe that mobile technology can help their organizations reach their managed travel goals – such as improving compliance and reducing spend – but they haven’t yet fully implemented mobile platforms in their organizations. Only 25 percent of travel managers said that smart phones and travel apps were actively improving the travel functions of their organizations today – an astoundingly low percentage considering the number of travel apps available.
“Mobile technology has the potential to transform the travel function of an organization. But while there are plenty of travel apps on the market, most of them don’t have the functionality necessary for business travel,” said Tony D’Astolfo, Senior Vice President of Travel Services at Rearden Commerce. “The most effective apps will integrate with a company’s managed travel platform and make compliance with travel policies a priority along with serving the needs of the traveler.”
In addition to mobile adoption and managing ancillary fees, improving travel compliance remains a priority for companies looking to reduce spend. Two-thirds of respondents reported that employees at their companies are less than 50 percent compliant with online booking policies. Part of the problem may stem from the amount of time it takes to manage travel online or through mobile platforms, as reported by more than 60 percent of corporate travel managers surveyed. One of the biggest frustrations: the online search results almost never match their employees’ individual preferences – a major hurdle when it comes to driving employee adoption.
“Business travelers typically don’t have time to sort through multiple websites and thousands of unorganized search results to find travel arrangements that meet their requirements, so they tend to do what’s easiest and could end up going outside of their companies’ platforms to book their travel,” said D’Astolfo. “Employees need a more relevant, personalized and user-intuitive online booking experience that saves them time, ensures compliance with corporate policies, and takes full advantage of the companies’ hard-earned travel discounts.”
As technology and market pressures continue to evolve, Rearden Commerce’s survey found that the roles of travel managers are changing substantially to keep pace. More than 65 percent of corporate travel managers surveyed reported that their roles have expanded beyond simply managing core travel functions this year. Nearly 30 percent of respondents said they are now managing other procurement categories in addition to travel – like shipping, office supplies and relocation – and 24 percent reported having the added responsibility for expense management.