Whilst the latest figures from the IMF (International Monetary Fund) predict that the global economy is expected to grow by 4.2% in 2022, and that corporate travel will be required to drive this recovery, prices are due to rise as the travel supply chain looks to manage capacity, cover increasing costs (eg energy) and recoup on pandemic losses.
The Global Business Travel Association (GBTA) has forecast that in 2022 flight prices are expected to rise by 3.3%, hotel rates by 13% and ground transportation prices by 3.9%. With this in mind, what simple steps can be taken to mitigate against, or indeed even save on, travel costs in 2022?
Book the Whole Trip Early
The adage ‘book early to avoid disappointment’ holds firm. Yield management has never been more important as the travel supply chain works to re-coup on their pandemic losses. Whilst there will still be offers to entice early bookings, the closer it gets to departure, the more expensive the fares and rates will become!
As soon as you know that you may need to travel let us know. We can then start working on the trip options. Where possible we will look at holding the trip in lieu of ticketing. The earlier we start, the more you will save.
Historically the typical corporate ‘booking journey’ was to look at the travel element (flights or rail) first, then to add accommodation later and then finally, a few days before travel, to decide on the ground arrangements (car hire, parking, transfers, etc).
This approach needs to change; where possible book the whole trip at the same time. Not only is this more efficient, saving time on the ‘back and forth’ over several days or even weeks, but by locking the whole trip down, you will reduce costs.
Consider ALL the Options
Hitting this head on, choosing flight, hotels, etc based on loyalty programmes or booking directly with suppliers online to cut out TMC fees are the top two things that will only result in higher overall travel costs.
As a TMC we have the systems and processes in place to ensure that all suppliers, fares and rates across multiple distribution channels are checked and offered as appropriate. Choose the option that meets the business need, the option that saves money and not the option that provides points that you may never even use.
Look at Combining Trips
For regular travellers, consider combining multiple trips. Whilst this may require some pre-planning and flexibility, potentially this is a very simple way to save money. When all the door-to-door T&E costs have been considered, often the cumulative costs of multiple trips work out to be more than the cost of one trip (or booking) taking in multiple destinations. Tell our team about any upcoming travel and we can explore all the options for you.
For obvious reasons it hurts me to say this but consider if you really need to travel. In what is now deemed to be the ‘Era of Purposeful Travel’, consider the reason for the trip. If you don’t need to be there in person to improve or expedite an outcome, do you need to travel? A virtual meeting should be considered instead, as it will save money, time and emissions.
Review Your Travel Policy
Now is the time to consider a wholesale review of your travel policy. Not only is it an opportunity to ensure that your duty of care (including Covid guidance) and sustainability goals are covered, but also to tighten up on ‘the rules’.
To provide a real-world example. Rather than just saying ‘Economy on flights of four hours or under’ and then leaving the traveller to choose what they want, be more prescriptive. Consider including advance purchase, time windows and fare type requirements. Moving to ‘The lowest restricted Economy fare within a three-hour window booked at least 14 days in advance’ will drive savings. Consider what will work for your business.
Ensure You Have Visibility of Travel Activity
Leverage reporting to understand traveller/booker behaviour, activity and compliance. Rather than being the only person casting an eye over the data, work with us to put in place meaningful reports to help empower the other stakeholders, such as budget holders, within your business.
Consider introducing pre-trip approval if you do not already have this in place. By approving travel costs prior to ticket issue, rather than retrospectively via expenses, you will be introducing the ultimate in cost control measures!
Finally, if you are entitled to, but are not already doing so, ensure that you are reclaiming the VAT on your travel activity. Although this principally applies to hotels (airlines and rail are exempt from VAT), claiming the tax back on UK hotels provides a 12.5% ‘saving’ on this expenditure (12.5% until 31 March 2022). Speak to your CFO, FD or Treasury to ensure this is being done.
If you would like guidance on how to book smarter with Meon, how to review your travel policy or to discuss other saving opportunities or controls please contact me directly on 0116 264 5270.