4 New ways to reduce corporate travel spend

Find out which measures corporates can implement in order to achieve savings on corporate travel within a new travel landscape

4 New ways to reduce corporate travel spend

Although many organisations have seen their travel spend reduce naturally over the last twelve months, stricter budgets and unstable economies will mean that many are looking to limit spend as travel starts to fire up again.

However, much like all other aspects of day-to-day life, Covid-19 has changed things and old ways of making savings are an ill-fit with life as we now know it. Hotel chains, airlines and train operators have all changed their ways of working and now it’s time for corporates to catch up.

Straight from our corporate travel experts, here is some advice for travel managers and organisations looking to reduce their corporate travel spend over the coming months:

1. Amend your travel policy

Many corporates are finding that their pre-Covid travel policies simply don’t reflect how their organisation travels or plans to travel now that restrictions are easing in some parts of the world. For example, guidelines that encourage travellers to book travel as far in advance as possible now seem unrealistic and so TMCs are supporting corporates in changing policies to allow for new cost saving strategies.

With many organisations now testing a return to corporate travel by permitting domestic and local trips only, train travel is set to become a more important part of many corporate travel programmes. Ideally travellers would be able to book in advance to secure the best rates, but for those who remain tentative to commit to trips until nearer the day SeatFrog offers an alternative way of saving, while also achieving a more comfortable journey.

The app gives travellers the chance to bid for first class seats - if they’re successful then SeatFrog will send them a new e-ticket for their upgraded journey.

When it comes to booking hotels, corporates are similarly hesitant to book in advance in case plans fall foul of newly imposed restrictions. Implementing the use of tools such as TripBam, which continues to search for better rates even after you have booked, can help to reduce the cost of a trip without having to plan too far ahead.

2. A different approach to hotel RFPs

Many corporates are still feeling at a loss when it comes to negotiating new suppliers rates right now. Their travel data for the last twelve months will, hopefully, not be reflective of their travel for the year ahead and so predicting travel volumes as a way of negotiating new deals feels impossible.

When it comes to hotel rates, our advice is not to prioritise a formal RFP process in 2021.

The simplification of RFPs was a trend that we saw emerging pre-Covid and 2021 looks to feature deals as simple as a ceiling rate for the year with percent discounts applied across the whole of a hotel’s estate, including hero properties that may have previously been excluded. Given the extreme pressures the hotel market is under, we expect this trend to continue as hotels scrabble to gain as much share as they can from the available market. You can read more about this here.

As an overall rule, it makes good sense to roll your 2020 hotel rates over into 2021 and monitor these as the year unfolds. It’s a good time to also review the rate caps outlined in your current travel policy and decide whether you’d like to lower these or allow travellers to stay in 4* or 5* hotels for the price of 3* accommodation.

3. Reviewing air route deals

Air fares tell a similar story to hotel RFPs and we would recommend that organisations talk to their TMCs, rather than airlines, to discuss how to get the best fares. Your TMC should have access to separate negotiated rates and exclusive fares that they can pass on to you. Most organisations won’t have hit their 2020 travel targets, but it’s likely that airlines will lower their expectations and be more open to negotiations as a way of building new relationships with customers.

Reviewing any negotiated fares that are attached to particular routes is worthwhile, as these routes may no longer be relevant to how your organisation travels. It could be the case that a different airline is now operating your most frequently travelled route, in which case you will need to decide whether you’d like to negotiate a new rate. It is also worth reviewing which loyalty schemes your organisation benefits from and to work this into your planning, as most airlines have agreed to extend expiration dates by at least six months.

4. A new style of travel approval

The challenges presented by the pandemic have meant that the role of travel approval systems have changed overnight, with focus shifting from cost to now also prioritising the safety and security of employees as they adapt to a new way of travelling.

However, there’s no denying that cost reduction will remain important as corporates begin to navigate a dramatically different business landscape, particularly for organisations in sectors heavily impacted by an unstable economy. Travel approval remains an effective way of curtailing spend, as it allows stakeholders to prevent trips that break budget or indulge in unnecessary first class travel.

Finding a travel approval system that can be customised and adapted to your organisation’s needs throughout the year ahead is important, as what feels like a sensible and realistic travel approval process right now might feel irrelevant or even noncompliant by the end of the year. Your organisation might also want to implement different approval workflows depending on the reason for travel or on the traveller themselves - the right travel approval system will make this possible.