Traveling hither and yon, in pursuit of new clients and revenues and maintaining business already in place – it’s a mainstay of large businesses.
Increasingly, as smaller companies go global, managing travel spend becomes important, too.
Egencia, the business travel arm of Expedia, released a study last week that showed small and mid-sized business owners are using technology as a conduit to boost their bottom lines by managing travel expenses more efficiently.
Research noted that 85 percent of a selection of the firm’s SMB clients had an eye on cost savings as a key for the coming year. Of that 85 percent, 60 percent said it was the “most important” focus for the coming months. Among the other findings: 40 percent of respondents will seek better transparency on travel-related costs.
In a statement tied to the announcement of the study’s findings, Virginie Pouget, head of global consulting at Egencia, said SMBs “expect detailed reports, thorough cost analyses and well-documented returns, on what they spend on their travel activities. Previously, SMEs may not have had access to the same amount of data as larger corporations, because it required implementation of expensive software. Today, we provide easy-to-use, comprehensive tools that let them look at the data and use it to make the necessary changes.”
The latest findings show a shift from more traditional approaches to travel management, where buyers have focused on expanding travel policy, said Egencia. Efforts have been tied to improving risk management and managing or refining hotel and airline agreements.
That shift reflects a change in the actual interaction of travel-focused executives – now marked by integration with finance and purchasing departments.
“Even though they now report to finance or procurement … travel administration is about understanding the human factor,” said Pouget. As for that human factor, the firm maintains that many employees may have “strong and legitimate opinions” about which airlines they want to use, or where they’d like to stay in terms of hotels. Those considerations are crucial to employees’ beliefs in how effective they are in their work.
“The buyer needs to understand this and handle both the culture of the company and the staff. Otherwise, cost-saving initiatives could be met with resistance and potentially affect the bottom line negatively,” said Pouget.
The Egencia finding follows an earlier report in May, titled “Egencia Travel Policy: Global Air Edition,” which found that more than half of travelers have booking freedom, and where that number breaks down to 33 percent traveling internationally and 12 percent domestically. “Business travel makes up a significant part of the $1.6 trillion total worldwide travel market,” the firm noted. “However, company policies only cover about $235 billion.”