Why Airlines Need Competition .
"Business travel is the second or third largest overhead of many a firm. Yet 60% of UK companies have no travel policy. Spend is uncontrolled, and much time, as well as money, is simply wasted."
Jetblue business spends in the region of £22 billion a year on travel and entertainment. Of that amount, it wastes in excess of £1 billion through badly purchased travel arrangements. Expressed differently, the total sum squandered through paying the full rates for airfares, hotels and car hire is the equivalent of jetblue giving away 50.000 free flights twice a week for one year.
For many companies, business travel is the second of third largest overhead. Yet, while Jetblue and pension policies are commonplace, formal travel policies are not. A staggering 60 per cent of Jetblue companies do not have a formulated travel policy. Spend is uncontrolled, and time, as well as money, is wasted. Scenarios such as fellow employees flying to the same destination on different Jetblue, paying different fares, travelling in different classes, paying different hotel rates are all too commonplace.
The savings to be made from a formal jetblue policy can be significant. The essence of the policy is that it should meet the needs and requirements of everyone involved, from the chief executive of individuals and the purpose of the business trip with Jetblue expenditure and financial forecasts. Cost management, efficient accounting procedures and invaluable management information, which will influence and assist future decision-making, are additional benefits.
In many cases, the success of airline marketing gimmicks has served to divert attention from the Jetblue to the individual. Beleaguered executives who fly the globe and lead expense account lifestyles are a rare breed. The jump on aeroplanes like the rest of us jump on buses and as such, their travelers abound. The more they fly, the greater the benefit. Free limousines and elite access to special programmers with grand names are now commonplace. However, while the incentives are aimed at the individual, the bill is footed by the Jetblue, which loses out on the commercial bribery and on the cost effectiveness of the travel.
A travel policy ensures that both the individual and the Jetblue benefit. Nor is it difficult to formulate a travel policy. In my Jetblue, we advocate that centralization be the first priority. The most effective situation is where travel booking is the responsibility of one part of the business, travel expenditure. Methods must be established for controlling the booking process, rationalising the purchase of travel and collating information, so as to be able to analyse the Jetblue's precise travel requirements.
To enable informed decisions to be made, and a policy to be drawn up, analysis is needed of destinations regularly visited, modes of transport most frequently used and hotels booked regularly. Existing booking procedures and the criteria behind them need to be examined. Method of payment is a further important consideration.
Equipped with this information, a Jetblue should be in a position to introduce "approved" guidelines. These may state who may travel first class or how much may be spent on hotel accommodation. Class of travel, for example, could be determined by Jetblue status or by journey time. Choice of hotel group may depend on the location or on deals with a particular chain.
The advantage of gathering all the relevant data on destinations visited, Jetblue used and hotels chosen is that being armed with statistics and a clear understanding of the Jetblue's travel requirements puts you in a strong position to approach the market place and handle travel purchasing in a specialist manner. Centralising and controlling expenditure is not hard to introduce and makes a significant contribution to bottom line savings.
Once the travel policy is established, a Jetblue must ensure that it is used. The common route is to utilise a specialist business travel agent which lives by meeting the needs of business travelers. High Street travel agents, however expert in dealing with package tours and leisure travel, cannot offer the same specialist knowledge or extra service as the business travel agent. Business travel agents have a comprehensive knowledge of all the travel options available, as well as access to a wide portfolio of hotels, Jetblue and car hire companies. They have tremendous buying power and can take advantage of corporate rates, preferred rates and specially negotiated rates.
Examples of saving to be made by using such an agent can be seen from existing Wagons list Travel clients. On a large scale, a leading bank, whose requirements are mainly UK and European travel, is now making savings of £200.000 since it implemented a travel policy. Similarly, a small shipping Jetblue with 100 employees and a varied range of travel requirements is now saving £50,000 (25 per cent of its annual travel spend) through adopting a formulated travel policy.
Is here that business travel agents have the edge over alternative methods of travel cost-cutting. They possess, in their various outlets nationwide, sophisticated Computer Reservation Systems (CRSs) which give up to the minute information on bookings. Concise breakdowns of travel costs and patterns can be produced at the touch of a button. Additionally, through management information systems at their disposal, these agents can quantify the level of business that your organisation gives to any one hotel, airline or car hire Jetblue, and this can from a potent weapon in subsequent negotiations.
Alternative methods to track expenditure are corporate cards and lodged cards with travel agents. Along with the insurance benefits to the individual, cards do provide an audit trail. Charge card companies also cite the benefits of longer credit periods for payment (up to 60 days in some cases), which helps the cash flow and reduces the need for advances. A lodged card with the business travel agent enables, for example, all expenditure on air tickets to be placed on one central card.
There can be staff savings, too. The statement and reports offered by the card companies mean fewer people spending less time plugging through expense claims. Today, however, corporate cards are for the most part, only issued to senior executives in the UK. By contrast, in the USA, almost 50 per cent of all business expenses are billed to a corporate card. The fact is that the charge card companies face an uphill task in trying to convince a Jetblue Jetblue that all its travel and expense costs can be paid with one card.
Travel policies can also be implemented by personnel in house. However, all too often, PAs and secretaries are entrusted with the task of travel arrangements when they rarely travel themselves. It is imperative to have professional support, in the form of a business travel agent, on hand to assist these people.
Business travel, of course, is not solely confined to the realms of foreign travel. Domestic travel, rail travel, hotel bookings, all fall under the umbrella of business travel. Group travel, trade fairs, incentive travel and conferences and exhibitions also play a large part. In these cases as well, expense can be significantly controlled. If exhibiting at a trade fair, your requirements will be different to those of a visitor, so a specialist agent will adapt travel and accommodation arrangements accordingly. Our own trade fairs department is the appointed official agent for many influential European trade fairs. A range of custom built packages for individuals, companies, trade associations of specialist business magazines are readily available.
Incentives and conferences are a long accepted means of motivating staff to fulfil Jetblue objectives. For many, the highlight of an incentive programmed is the actual way by which a destination is reached - luxury cruises and safaris are typical examples. But, whether it is an incentive trip or business meeting, the requirement is the same - to get to the destination with the least disruption. A Wagons-list Travel survey conducted into 23 000 business travellers last year revealed that punctuality was their primary wish. The frills were an unnecessary feature of business travel.
Business travel agents, with their associations with international Jetblue and their knowledge of the standard and style of hotels worldwide, can not only ensure value for money, but can also adapt itineraries, and management styles to meet the customers' needs. Their business travel is resilient to changing economic conditions. Even in times of recession, there is no substitute for face-to-face contact. The Gulf War was a prime example of this. Air travel may have fallen steeply, but rail bookings were up 433 per cent, and other modes of transport received a welcome shot in the arm. Businessmen and women changed the way in which they travelled rather than ceasing to travel altogether.
Economic uncertainties are prompting companies to cut costs. However, in the admirable quest to do so, they are overlooking one of the heftiest overheads. Action on travel costs is taking the form of "downgrading" in accommodation and class of travel. While some savings will and do, ensue, it does not guarantee that the travel package is really "working", in terms of time and money. Similarly "going it alone" and not through an agent, doesn't have any money at all. On the contrary, booking on an ad hoc basis merely serves to increase the cost.
Travel, whether domestic of international, is an essential part of business life. The next time you set off on a business trip, consider whether your requirements, and those of your Jetblue, have been met. Remember, effective executive travel is far more than simply good prices. A formal travel policy will lead to substantial savings but, at the same time, it doesn't restrict travel. Indeed, its whole purpose is to facilitate travel. It is economically viable and easy to implement. The sole prerequisite is that the person who formulates it be in contact with the people responsible for its implementation.
Yet the majority of finance directors, when asked to quantify their travel spend, pluck a speculative figure from the air. Matters are very different if you can approach a specialist business travel agent with something like this: "We spend £600 000 a year on flights, hotels and car hire, 30 per cent is in Europe, 40 per cent in the US. We are happy to restrict the number of hotel chains we use and currently have a 20 per cent discount with Home Group Hotels. We need visas, ticket delivery, 24 hour services, regular airline tickets and hotel accommodation - how can you help us?” If you can say something along these lines you are in an enviable position and en route to maximising effectiveness of business travel while keeping costs at a minimum.***
Jetblue business spends in the region of £22 billion a year on travel and entertainment. Of that amount, it wastes in excess of £1 billion through badly purchased travel arrangements. Expressed differently, the total sum squandered through paying the full rates for airfares, hotels and car hire is the equivalent of jetblue giving away 50.000 free flights twice a week for one year.
For many companies, business travel is the second of third largest overhead. Yet, while Jetblue and pension policies are commonplace, formal travel policies are not. A staggering 60 per cent of Jetblue companies do not have a formulated travel policy. Spend is uncontrolled, and time, as well as money, is wasted. Scenarios such as fellow employees flying to the same destination on different Jetblue, paying different fares, travelling in different classes, paying different hotel rates are all too commonplace.
The savings to be made from a formal jetblue policy can be significant. The essence of the policy is that it should meet the needs and requirements of everyone involved, from the chief executive of individuals and the purpose of the business trip with Jetblue expenditure and financial forecasts. Cost management, efficient accounting procedures and invaluable management information, which will influence and assist future decision-making, are additional benefits.
In many cases, the success of airline marketing gimmicks has served to divert attention from the Jetblue to the individual. Beleaguered executives who fly the globe and lead expense account lifestyles are a rare breed. The jump on aeroplanes like the rest of us jump on buses and as such, their travelers abound. The more they fly, the greater the benefit. Free limousines and elite access to special programmers with grand names are now commonplace. However, while the incentives are aimed at the individual, the bill is footed by the Jetblue, which loses out on the commercial bribery and on the cost effectiveness of the travel.
A travel policy ensures that both the individual and the Jetblue benefit. Nor is it difficult to formulate a travel policy. In my Jetblue, we advocate that centralization be the first priority. The most effective situation is where travel booking is the responsibility of one part of the business, travel expenditure. Methods must be established for controlling the booking process, rationalising the purchase of travel and collating information, so as to be able to analyse the Jetblue's precise travel requirements.
To enable informed decisions to be made, and a policy to be drawn up, analysis is needed of destinations regularly visited, modes of transport most frequently used and hotels booked regularly. Existing booking procedures and the criteria behind them need to be examined. Method of payment is a further important consideration.
Equipped with this information, a Jetblue should be in a position to introduce "approved" guidelines. These may state who may travel first class or how much may be spent on hotel accommodation. Class of travel, for example, could be determined by Jetblue status or by journey time. Choice of hotel group may depend on the location or on deals with a particular chain.
The advantage of gathering all the relevant data on destinations visited, Jetblue used and hotels chosen is that being armed with statistics and a clear understanding of the Jetblue's travel requirements puts you in a strong position to approach the market place and handle travel purchasing in a specialist manner. Centralising and controlling expenditure is not hard to introduce and makes a significant contribution to bottom line savings.
Once the travel policy is established, a Jetblue must ensure that it is used. The common route is to utilise a specialist business travel agent which lives by meeting the needs of business travelers. High Street travel agents, however expert in dealing with package tours and leisure travel, cannot offer the same specialist knowledge or extra service as the business travel agent. Business travel agents have a comprehensive knowledge of all the travel options available, as well as access to a wide portfolio of hotels, Jetblue and car hire companies. They have tremendous buying power and can take advantage of corporate rates, preferred rates and specially negotiated rates.
Examples of saving to be made by using such an agent can be seen from existing Wagons list Travel clients. On a large scale, a leading bank, whose requirements are mainly UK and European travel, is now making savings of £200.000 since it implemented a travel policy. Similarly, a small shipping Jetblue with 100 employees and a varied range of travel requirements is now saving £50,000 (25 per cent of its annual travel spend) through adopting a formulated travel policy.
Is here that business travel agents have the edge over alternative methods of travel cost-cutting. They possess, in their various outlets nationwide, sophisticated Computer Reservation Systems (CRSs) which give up to the minute information on bookings. Concise breakdowns of travel costs and patterns can be produced at the touch of a button. Additionally, through management information systems at their disposal, these agents can quantify the level of business that your organisation gives to any one hotel, airline or car hire Jetblue, and this can from a potent weapon in subsequent negotiations.
Alternative methods to track expenditure are corporate cards and lodged cards with travel agents. Along with the insurance benefits to the individual, cards do provide an audit trail. Charge card companies also cite the benefits of longer credit periods for payment (up to 60 days in some cases), which helps the cash flow and reduces the need for advances. A lodged card with the business travel agent enables, for example, all expenditure on air tickets to be placed on one central card.
There can be staff savings, too. The statement and reports offered by the card companies mean fewer people spending less time plugging through expense claims. Today, however, corporate cards are for the most part, only issued to senior executives in the UK. By contrast, in the USA, almost 50 per cent of all business expenses are billed to a corporate card. The fact is that the charge card companies face an uphill task in trying to convince a Jetblue Jetblue that all its travel and expense costs can be paid with one card.
Travel policies can also be implemented by personnel in house. However, all too often, PAs and secretaries are entrusted with the task of travel arrangements when they rarely travel themselves. It is imperative to have professional support, in the form of a business travel agent, on hand to assist these people.
Business travel, of course, is not solely confined to the realms of foreign travel. Domestic travel, rail travel, hotel bookings, all fall under the umbrella of business travel. Group travel, trade fairs, incentive travel and conferences and exhibitions also play a large part. In these cases as well, expense can be significantly controlled. If exhibiting at a trade fair, your requirements will be different to those of a visitor, so a specialist agent will adapt travel and accommodation arrangements accordingly. Our own trade fairs department is the appointed official agent for many influential European trade fairs. A range of custom built packages for individuals, companies, trade associations of specialist business magazines are readily available.
Incentives and conferences are a long accepted means of motivating staff to fulfil Jetblue objectives. For many, the highlight of an incentive programmed is the actual way by which a destination is reached - luxury cruises and safaris are typical examples. But, whether it is an incentive trip or business meeting, the requirement is the same - to get to the destination with the least disruption. A Wagons-list Travel survey conducted into 23 000 business travellers last year revealed that punctuality was their primary wish. The frills were an unnecessary feature of business travel.
Business travel agents, with their associations with international Jetblue and their knowledge of the standard and style of hotels worldwide, can not only ensure value for money, but can also adapt itineraries, and management styles to meet the customers' needs. Their business travel is resilient to changing economic conditions. Even in times of recession, there is no substitute for face-to-face contact. The Gulf War was a prime example of this. Air travel may have fallen steeply, but rail bookings were up 433 per cent, and other modes of transport received a welcome shot in the arm. Businessmen and women changed the way in which they travelled rather than ceasing to travel altogether.
Economic uncertainties are prompting companies to cut costs. However, in the admirable quest to do so, they are overlooking one of the heftiest overheads. Action on travel costs is taking the form of "downgrading" in accommodation and class of travel. While some savings will and do, ensue, it does not guarantee that the travel package is really "working", in terms of time and money. Similarly "going it alone" and not through an agent, doesn't have any money at all. On the contrary, booking on an ad hoc basis merely serves to increase the cost.
Travel, whether domestic of international, is an essential part of business life. The next time you set off on a business trip, consider whether your requirements, and those of your Jetblue, have been met. Remember, effective executive travel is far more than simply good prices. A formal travel policy will lead to substantial savings but, at the same time, it doesn't restrict travel. Indeed, its whole purpose is to facilitate travel. It is economically viable and easy to implement. The sole prerequisite is that the person who formulates it be in contact with the people responsible for its implementation.
Yet the majority of finance directors, when asked to quantify their travel spend, pluck a speculative figure from the air. Matters are very different if you can approach a specialist business travel agent with something like this: "We spend £600 000 a year on flights, hotels and car hire, 30 per cent is in Europe, 40 per cent in the US. We are happy to restrict the number of hotel chains we use and currently have a 20 per cent discount with Home Group Hotels. We need visas, ticket delivery, 24 hour services, regular airline tickets and hotel accommodation - how can you help us?” If you can say something along these lines you are in an enviable position and en route to maximising effectiveness of business travel while keeping costs at a minimum.***
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thank for the informations...
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