CURB THE TAXIS, CUT THE COSTS

Freelance journalist and editor of Public Sector Travel Betty Low wrote a great feature for Buying Business Travel recently called ‘The Art of Persuasion’.  She argued that it’s time for travel managers to start managing travellers rather than suppliers.

Why? Because it’s travellers who are responsible for racking up a multitude of hidden expenses and, by controlling those, you may end up making bigger cost savings than constantly trying to squeeze already-squeezed suppliers.

Hidden, or unmanaged, spend is also the subject of a recent report by BCD Travel, which revealed that it accounts for a massive 26% of all travel budgets, supporting Betty Low’s opinion that it is this that holds the key to cost savings.

The BCD report claims hidden spend can be broken down into three areas:

•           Dining and entertaining – accounting for 16%
•           Ground transportation – accounting for 6%
•           Mobile – accounting for 4%

If we look at ground transportation first, it quickly becomes obvious how managing the traveller can make a massive difference. This area of hidden spend may account for just 6% now, but if taxi fares continue to rise as they have been over the last five years, it’s about to hijack an even larger share of the pot and become an even bigger problem.

Thanks to rising fuel prices, the cost of London black cabs, for example, have risen on average 18% in the last five years and by 42% over a four-mile journey. The fixed rate fare from Heathrow to London is now £65, up £10 from 2008. Buying Business Travel recently highlighted the world’s most expensive airport transfers. Travelling into Tokyo from Narita is close to £200. 

And faced with indisputable facts like this it’s hard to question the importance of traveller management and the only question to remain is how do we manage the traveller once they have left the office and are out of the travel manager’s reach?

According to the BCD Travel report, this can be partially tackled psychologically as many travellers choose options based on ‘the bandwagon effect’.

“Social norms are massively powerful because we ultimately seek the approval of others. In fact, travellers, like everyone else, are often quick to abandon their own best judgment if they feel out of step with others. Use this lever to steer travellers toward public transportation, by, for example, sending out an email: From: Travel Manager Subject: Get on the Bandwagon 80% of your co-workers have switched to using public transportation in New York City. When are you going to join them?”

And of course, increasingly the answer to traveller management is through mobile technology and the introduction of apps that are designed to encourage travellers to make cost-efficient and compliant choices once they arrive at a destination and not just during the booking process and before they leave.

Whichever method travel managers opt for, it’s clear that, if cost savings are ever to be maximised, then the end of rogue travellers must be nigh.

David Chapple is event director for the Business Travel Show. www.businesstravelshow.com