Finding travel data is often a challenge for many companies.
While some businesses have significant control through a system of approved travel management companies (TMC’s) or booking channels for employees, many smaller companies have no such policies and operate an ad-hoc system that relies on employees finding the best prices they can.
In this case, the data available is likely to be corporate credit card spending and expense claims, and it often requires significant effort to extract the relevant travel figures from those sources, with travel expenditure often integrated with expenses related to ‘on the road’ expenses generated whilst on business trips.
Not only is this extremely time-consuming for internal finance teams, it also makes analysing the travel programme in a bid to improve booking practices, cost reduction and efficiencies a nigh-on-impossible task.
For those companies currently managing travel themselves, the first question considered is always how much value a Travel company could offer vs. booking directly in-house. The value a TMC offers is split into three different categories; Cost Reduction, Risk Reduction and Efficiency improvement.
If you are currently in the process of considering the move to a managed travel solution but unsure of the value they will offer, here at Good Travel Management we now have a handy ROI Calculator which in a few simple steps will detail how much you could save by switching to Good Travel Management.
Regardless of your current booking method, there are some key metrics to consider when analysing your business travel costs.
#1 Total Spend
Your total travel spend includes the cost of flights, train tickets, hotels, hire cars or other transport, travel expenses, conference costs and so on.
This gives an overall picture of your corporate travel spend comparisons with previous periods can show you trends and patterns in spending. If year-on-year increases are seen, is that because more travel is occurring? Is each trip becoming more expensive? As an overview this is essential, but for control, you need more detail.
#2 Average Cost of a Trip
By taking the overall travel cost and dividing it by the total number of business trips taken during the time period, you can find the average cost of a business trip. This can be further refined into average hotel, flight, train ticket and spend per trip, allowing you to see if average trip costs are rising.
You can assess your average spend against industry averages to see if you are overspending unnecessarily.
#3 Supplier Metrics
By looking at which suppliers you’re spending money with, you can gain an understanding of which airlines, hotels and train operating companies you use the most.
By understanding where the money is being spent and with whom, you can begin to look for areas where you can either gain more value from the suppliers used (through initiatives such as Corporate Airline Reward Schemes or Corporate Hotel Rate Procurement for example), or look for alternatives which would provide comparable services at reduced costs.
#4 Traveller Metrics
Business travel is a requirement for many roles however, it’s important you don’t forget to monitor which employees are travelling and if their needs are being considered.
Travel Friction is a term used to describe the wear and tear that business travellers accumulate over time and keeping an eye on who your top travellers are, where they’re going, how they’re travelling and what they’re spending, will help you assess the impact travel is having on their well-being.
You could combine these figures with HR data to see if there are any links to regular travellers and high staff turnover rates for example.
Even when the above information is difficult to extract and pull together, it’s worth the effort in the long run. You’ll be able to use this data to spot trends and patterns that may show you your approach to business travel needs attention. It’ll also come in handy if you’re considering using a travel management company for the first time.
If you’re struggling to find the data you need, consider speaking with some travel management companies to see how they can help centralise your spend. You’ll find after working with a travel management company for just a few months; you’ll have a much better insight into your business travel activity, and they will help ensure its optimised too
For those currently managing travel in-house, it’s worth remembering the additional value a TMC can bring to your travel through their use of MI Reporting, however, this is of most value when all the data is stored in one place, so sticking to a single provider will allow these reports to be as comprehensive and effective as possible.
If you currently considering the move to your first TMC, we have some handy information on our process, or for those wishing to switch suppliers, visit our website to find out how we can make the transition from your existing supplier to Good Travel Management an easy one with our tried and tested customer onboarding process.