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TRAVEL managers are looking to optimise travel budgets instead of simply slashing them as a likely global financial crisis looms.
Amarnath Lal Das, general manager India Travel, Accenture, told TTG Asia e-Daily: “We cannot change travel policy every time, although we do review them from time to time. What we are doing now is to move cautiously and focus on cost/spend optimisation.
“Say, I have a one-day meeting. I will go and return (on the same day), thus saving room cost. Downgrading myself from a five-star (hotel) to four-star will also get me savings.”
Alvan Aiau, vice president global sales & program management, Asia Pacific of Carlson Wagonlit Travel, noted that companies are no longer just fixated on travel expenses.
“Globally companies are tightening (travel budgets), but they are also thinking about what returns will they get from business trips.
“You can cut cost and stop travelling, or you can think about what that trip will bring to the company, what the return on travel investment is.”
Aiau said Carlson Wagonlit Travel has done a study on the return on travel investment. “It gives companies insights on whether travellers achieve what they set out to do on their travels,” he said.
“We have found that when travellers plan in advance and plan more meetings in a single trip, they usually achieve their objectives. This is about maximising the purpose of their travels.”
Aiau added that a lot of companies are in the business of people and a trip is necessary to achieve business objectives.
“Cutting cost and enforcing travel policy strictly helps but travel managers must now look beyind that,” he added.
For Credit Suisse, a consolidation of hotel partners is taken to help achieve savings.
Lena Khoo, regional head of travel, Asia-Pacific of Credit Suisse, revealed: “We have consolidated the number of hotels in our programme. Having fewer hotels means we can put more business into each property, thus giving us greater power to negotiate for better discounts.”
Khoo is also finding ways to trim hotel expenses by removing breakfast from room deals and have her travellers pay for their first meal of the day with their per diem allowance.
Offering a different view on business travel during uncertain economic times, Chris Reynolds, senior partner of 3SIXTY Global, a UK-based consulting group specialising in global travel programmes, said spend have actually been increasing.
“(Corporates are) driving down prices but the volume is up,” he said. “For salespeople the best way to get out of a business crisis is to sell more. Hence, they are travelling more to get more business.”
Reynolds added that people prefer to meet in person for the first time and, from his experience, video conferencing and virtual meetings “never took off”.
He opined that companies could find savings in cutting down non-essential internal meetings.
“I have a client whose internal meetings – employee travelling to meet another employee – made up 60 per cent of total travel spend. This is the sort of expenditure companies need to cut,” he shared.
Reynolds cautioned that companies must consider how travel budget adjustments during difficult economic situations would impact employee satisfaction, as it was also important to retain talents.
Read more reports from the ground in our IT&CMA and CTW Asia-Pacific 2015 Show Dailies.
