Leveraging Corporate and Meeting Travel
August 18, 2008
Originally posted August 13, 2008 on www.mimegasite.com
By Michael MacNair
The demand for corporate and meeting travel continues to rise while overall capacity remains stagnant. There are not many new hotels, airlines are cutting back on flight options, the car rental industry is smaller and they have a handle on the capacity required to keep rates high—and suppliers' costs are rising. Previous predictions of increases in 2008 have gained greater credibility in recent American Express Business Travel forecasts which suggested that hotel rates will rise by 8-10%, and that a domestic transient trip including airfare, car rental, and hotel will increase 6% bringing the total trip expense to $1,100, while an international trip will increase by 7% or $205, which brings the average cost to travel abroad to $3,171.
With no relief on the horizon, organizations will continue to be challenged to keep prices low while finding the right space at the right locales and with the right suppliers. The best hope to combat these challenges is to develop clear-cut policies and procedures for both corporate and meeting travel that leverages volume, tools, procedures, and technologies to ensure the best possible value. Meeting and travel planners need to make smart, careful, and creative decisions utilizing their buying power and wisdom to make educated choices.
There are powerful synergies to be gained by leveraging meeting and corporate travel costs, but they are often missed. The path to gaining maximum leverage for 2008 and beyond lies in developing one strong combined travel and meeting policy that defines the rules, provides direction, and offers suggestions with emphasis in the following five "P" areas: price, procedures, payment, preferreds, and packaging.
This first part of the three-part series takes a look at the first piece of the solution: price strategies.
Consider a balance of company, planner, and attendee/traveler desires to establish budgets, win-win price thresholds, content, locations, value-add items, and more. Inside of the price category, there are several areas to manage for cost benefits and value-add items, including air, hotel, ground transportation, and miscellaneous.
Air: A threshold must be established for air over which a traveler must consider a connection, alternate airport or time frame, low-cost carrier or non-preferred airline, or different pattern (for example, running the meeting over part or all of a weekend). Determine which airline tickets must be purchased through your TMC (travel management company that is a travel agency concentrating in business travel). For example, can the board go outside of the TMC and submit payment for reimbursement or do you want that control and leverage? When should attendees use your TMC's online system or call in to make travel arrangements? What are your preferred airlines and when and why should travelers and planners consider them? Define expectations.
Hotel: Define the hotel brand type (deluxe, upscale, mid priced, value), per diem, or budgets for transient and meeting travel that consider the total scope of the meeting (room, food and beverage costs, meeting room rental, parking, etc.). Suggest or define expectations on changing locales to less expensive cities. According to Runzheimer International, the top five per diem cities are, not surprisingly, New York, Washington, D.C., Chicago, Boston, and San Francisco. Discuss when to consider a resort or use more consumer-oriented properties. Suggest that travelers and planners consider amenities (those that are free or those that may come at a cost like Internet usage, breakfast, resort fees, etc.).
Ground Transportation: Talk about when to rent a car or take taxis, and use hotel locations to your advantages. Suggest the consideration of booking near airports or mass transit. Identify and suggest suppliers or required suppliers for rental cars, limos, and busses. Can you negotiate a special organization rate as part of the meeting package? For those driving to the location, is free parking offered or is there a valet or self-parking fee imposed by property? Be sure to communicate pricing, options, and policies to travelers.
Miscellaneous: Discuss food and beverage expectations and make cost-cutting suggestions, such as considering beer and wine versus a full open bar, hors d'oeuvres versus dinner, box lunch versus a sit-down meal, as well as which tier of food and beverage to select and when. Suggest meeting space alternatives that can save money, such as less expensive room setups or negotiating for free room rental. Audiovisual needs are on the rise and suggesting or requiring coordination, alternate suppliers, and other items can reduce cost. Define the rules for marketing and communication costs, entertainment, parking, gratuities, and activities like golf and more to reduce costs and enhance your ability to ensure better service and availability.
Consider the following questions:
• Have you clearly defined the pricing thresholds for every component of a business trip and/or meeting to ensure the best value decision for each selection?
• Are there written procedures so that someone managing a meeting for the first time or considering organizing a meeting can gain valuable best practices and direction to ensure the best value? Can this piece also be used as a training manual for new planners?
• Does your meeting management team and travel team work together on these items to ensure leverage and the benefits of great policies and procedures?
Michael MacNair owns MacNair Travel Management, a travel and leadership consulting firm in Alexandria, VA. A regular industry spokesperson and author of the book Smooth Landings, MacNair conducts travel management seminars, sharing best practices. To contact him, visit www.macnairtravel.com.
Originally published Aug. 1, 2008
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