22 August, 2017

Big business travel savings for Aussie mid-sized companies

Woman waiting his flight at airport terminal, sitting on chair and typing on the laptop.

New data from American Express Global Business Travel (GBT) has revealed that Australia’s mid-sized companies can save up to $300,000 a year* on their travel expenditure.

While managed travel programs have historically been considered essential for only large-size companies, travel program audits conducted by the Global Business Consulting team at Amex GBT into Australian mid-sized companies has revealed opportunities for mid-tier firms to realise significant savings.

Jo Sully, Vice-President & General Manager, American Express Global Business Travel, Australia, said, “While some mid-sized companies may consider their annual travel spend to be too small for them to benefit significantly from a managed program, our own research indicates this is often not the case.

“Support from a travel management company into key areas of travel budgets, such as airline and hotel contract coverage, economy cabin usage, and compliance, can save hundreds of thousands of dollars, which businesses can reinvest into others areas of their business.

“We recently launched a new offering specifically for Australia’s mid-sized companies, as we believe traditional corporate travel simply hasn’t served mid-sized companies well enough, and corporate travel booking tools haven’t evolved at the pace of consumer travel tech. Today’s modern business travellers want choice, personalisation, and for their company, cost savings.”

Travel audits conducted by American Express Global Business Travel on Australian mid-sized companies have revealed savings can be identified in the following key areas:

Airfare contract coverage

For many mid-market companies, poor visibility over where your staff are travelling, the volume of travel, as well as costs, leads to significant financial wastage.

Airline advanced bookings

Booking flights at the last minute is a common way for travel expenses to increase. When booking flights, the two considerations which needs to be balanced are securing the optimum fare possible, as well as securing the most appropriate flight.

Economy cabin usage

Business class fares bear a significant cost, which is why many larger companies enforce strict travel policies regarding their use. Typically, economy tickets are preferred for domestic travel, while business class tickets are common for international travel.
For mid-market companies, the lack of visibility over total travel expenses can create situations where staff are using business class fares where an economy fare is more reasonable.

Airline restricted inventory

The use of restricted inventory airfares, such as those which forbid any changes to the booking, can be attractive due to the reduced costs. However, it’s worth noting the potential cost of inflexibility, as any changes in schedule or business priorities could render then airfare useless, as an entire additional ticket will need to be booked.

Hotel coverage

Similarly to airline savings, mid-market companies with strong visibility over their hotel spend will find it easier to increase savings.
When considering hotel contracts, it’s important to have the right mix of cities and hotel tiers to match the requirements of the business. If contract coverage is poor in cities where staff are regularly travelling, then in instances where preferred hotels are fully booked, staff will be forced to book hotels outside of policy at a greater cost.

Hotel compliance

Similarly to airfare compliance, technology which automates accommodation bookings can assist companies in ensuring staff travel remains within company policy and increases the likelihood of minimising overall costs.

*Savings based on companies with an average business travel expenditure per annum of approximately AUD$1.4M, and including adoption of all recommendations provided by American Express GBT.

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American Express Global Business Travel