The static corporate travel policy is dead
Times are changing, and traditional, one-size-fits-all corporate travel policies no longer serve the diverse needs of businesses and their employees. Many companies continue to use outdated, static travel policies rooted in historic pricing strategies that aren’t even used by carriers any longer.
In parallel, employees have grown to expect the same level of personalization during business travel as they receive when traveling for leisure. As a result, some may resort to booking outside of the corporate booking tool, leading to difficulties managing their employees’ trips, inability to comply with the duty of care obligations, and vulnerability to higher costs.
Savvy travel managers are now adopting more liberal travel policies, which in many cases yield additional cost savings over more restrictive ones. Maintaining a focus on employee satisfaction, retention, duty of care, and well-being does not contradict the ability to make savings. The desire to marry customer experience with data-driven cost savings is at the core of Oversee’s FareSaver. So, for those tasked with setting a policy that meets the needs of the business and its employees, consider the following factors.
Be attentive to the changing needs of your business
In today’s fast-paced world, businesses often need to act fast to stay relevant, and adopting a flexible approach to travel can help companies stay agile. The need for travel may arise at short notice, so having a policy in place that can accommodate these occasions can avoid out-of-policy bookings and ensure that the best travel options are found for both the company and the employee.
Allowing flexible fares to be booked when meetings are further out and rebooking to more restrictive fares closer to departure often mean that you can significantly reduce the fees you pay to an airline when plans change. Companies can make significant savings on the net pricing difference, even taking into account cancellation or change fees. It also keeps the bookings within your booking tool and allows you to show due diligence.
Business travelers have individual needs
Not all travel is created equal. Employees need to travel for a variety of reasons, distances, and frequencies. Treating them all the same way may not be the most cost-effective option. Opportunity costs and travel fatigue affect business decisions so the reason for travel should arguably be reflected in your travel policy so as to make sure your key sales executives are sharp when they meet with decision-makers.
Instead of reserving more luxurious travel solely for your most senior executives, consider focusing on frequency and reason for travel. Business travel should have an implied ROI attached to it and a cost-benefit analysis can be undertaken quite effectively.
Consider different geographical locations
Global companies with complex structures and multiple locations should consider varying their corporate travel policy between locations or business functions. By fare auditing specific and commonly traveled segments you can identify travel patterns and how your negotiated rates perform compared to that of publicly available rates with alternative carriers. You’ll also be able to identify trends in price fluctuation to enable you to tailor your advance purchase and preferred airline policy based on business cases for each office.
Changing optimal time for bookings and time for a dynamic policy match
With airfares changing constantly, imposing a 14-day advance purchase rule may not be the most cost-effective strategy. The price of a fare can fluctuate significantly and often between when it is first published and departure. Fare prices are dynamic and can increase or decrease depending on revenue-generating opportunities, load factor, upselling, competitor pricing, expected demand surges, fleet movements, IROPS, reward flights, and even the density of elite airline loyalty members on board.
In some cases, fares may drop significantly closer to the date of the flight, meaning that corporations implementing a 14-day advance rule on bookings may be missing out on savings. Today, technologies that monitor and rebook during these price drops can guarantee that organizations are paying the optimal price to move their people around the planet.