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Luring Travel Spend: Will Seamless Mobility Attract T&E Dollars

Recent reports show that revenue for the business travel industry is rising. With more companies sending employees across the globe and back, some cities are making their own preparations for increased travel spend. How can cities actually make the travel process seamless for the corporate world? But more importantly, what can businesses do to ensure that they remain on top of all travel and expense reporting?

Everyone always wants to know the fastest way between point A and point B, especially those in the business world. Time is money, and when companies can ensure that their travel and expense dollars are being put to good use, they are more likely to continue to spend those dollars.

But how can cities create a type of “seamless mobility,” ensuring that businesses feel justified in their travel expenditures? Could it really be as simple as designing a strong and efficient public transportation system?

Seamless mobility draw and the corporate world

The hope in Washington, D.C. is that yes, seamless mobility will in fact boost the amount of corporate travelers who swing through the nation’s capital. While D.C. has a subway system, it does not yet have a direct rail line from its largest airport – Dulles International Airport – to the downtown metro area. However, that will change by 2018.

The Silver Line opened in D.C. at the end of July, and according to Associations Now, it brings the city one step closer to seamless mobility. Eventually, riders can take the Silver Line all the way to Dulles, but for now there is a $5-per-way bus that gets travelers the last few miles between the Metro to the terminal.

According to trade groups, once that final connection is made, the benefits for the area’s meetings industry could be significant.

Cities that are able to create this “seamless mobility” have a better chance at benefitting on the convention circuit, according to a study by the American Public Transportation Association and the U.S. Travel Association.

For example, hotels in “rail cities” had 10.9 percent higher daily average room rates and revenue rates per room, the study showed.

“This improved performance of rail cities over non-rail cities is apparent even when the non-rail cities have comparable—or stronger—supply of available hotel rooms and volume of air travelers, which provides a major competitive advantage for attracting and securing business travel, including meetings and conventions,” the study stated.

How big is corporate travel spend?

Why would cities even care about corporate travelers? Well, according to research from Concur, $50 billion worth in expense transactions are processed per year across the globe.

Moreover, the Concur Expense IQ Report 2013 found that the total ancillary spend of Concur clients increased from over $30 million to about $58 million from 2011 to 2012. This is important because ancillary spend is a key part of the spend management “toolbox” smart companies build, said IDC VP of Cloud Services Robert Mahowald.

“Like itemizing a receipt, looking at individual spend categories lets you make choices about how you handle policy exceptions, like airline upgrades, and ‘frills’ like airline club memberships,” Mahowald said of the Concur report findings. “It’s all part of the drive to look deeper at the data and make smart policy decisions.”

The Concur report also showed which U.S. cities are deemed the top spot for most expensive business travel in 2012. New York City was the most expensive city, averaging $472.06. San Francisco, Garden City, NY and Washington, D.C. rounded out the top four, averaging $407.04, $389.44 and $374.29, respectively.

Meeting in the middle

PYMNTS.com previously reported on how travel and expense management is among the most difficult categories for businesses to control. Among financial managers polled worldwide by Forrester Research, 24 percent believe T&E to be in the top three most challenging operating expenses. Additionally, the report indicated that 80 percent of those surveyed are not using an automated tool for the process, and employees are instead manually entering expenses.

According to the researchers, companies can find greater success by deploying a system and processes that provide informative reports to help managers monitor and control a firm’s spend. Leveraging tools that identify cost-saving opportunities, provide negotiated discounts and present upgrade opportunities as employees book travel can also be beneficial, researchers said.

If businesses can work to control their T&E management, and cities can create “seamless mobility,” perhaps the T&E spend will not be so difficult to control after all.

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