How well are you managing money?

By failing to take control of spending on business travel and meetings, companies are missing out on big cost savings, writes Ian Whiteling

When the trade association ITM changed its name recently from the Institute of Travel Management to the Institute of Travel and Meetings, it demonstrated a growing trend towards the merger of the business travel and corporate meetings sectors.

The idea that the two sectors have not always been linked reflects an historic lack of control over travel and meetings. Smarter organisations often work with specialist travel management agencies, such as Hogg Robinson Group (HRG) and Carlson Wagonlit Travel, to realise savings. Many, however, have neglected to do this and even more fail effectively to control their meetings spend.

“We have had a number of existing travel clients saying they don’t know what their spending on meetings is,” says Amanda Hanlin, HRG’s director of global sales, meetings, groups and events. “Over the last financial year, we received six requests from clients looking to consolidate their meetings business, which we considered quite a lot. But we have already received 58 such inquiries in the current financial year, so it’s clear companies are waking up to the issue.”

Globalisation and the rise of developing nations in Asia and South America have been key drivers of the increase in international business travel predicted for 2013. According to a recent survey by Frequent Business Traveller, 33 per cent of travellers said they will travel more in 2013 than 2012 and 50 per cent said they would be travelling more compared to two years ago. Travel will be an increasing component of the total cost of meetings, so effective management could have a significant effect on a company’s bottom line.

Travel will be an increasing component of the total cost of meetings, so effective management could have a significant effect on a company’s bottom line

The issue is being recognised by countries such as China, which has a rapidly growing outbound business travel base to complement its highly mobile internal business community. By 2015, China’s business travellers will exceed those of the current world number one, the United States, according to research from the Global Business Travel Association (GBTA), presented at its inaugural China conference last month.

Dean Fowles, travel unit head in the Institutional Services Division of Asian Development Bank, ran a course at the GBTA event. “Business travel planning is very important,” he says. “Board members and managers are looking at the issue and saying: ‘We’re spending a lot on this, but doing little to manage the cost.’ You can negotiate a deal and strategically manage the way staff travel, and do it in such a way that the travel experience remains good, through using corporate services, such as business class, but you become much smarter at how you purchase it.”

Ms Hanlin provides an example of what can be achieved by not only managing travel, but also integrating the meetings element.

“One financial client wanted to bring together their meetings programme with their transient travel programme to cut supplier numbers across two parts of their business and generate better compliance so as to achieve cost reductions across the board,” she says. “Over a four-year period, they saved more than £4.4 million across their meetings programme, plus customer experience rose by up to 99 per cent.”

Not bad for an area that many companies still fail to recognise as requiring effective management and control.