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GBTA and Egencia Unveil Corporate Travel Policy Benchmarks

August 17, 2011 By: George Dooley Travel Agent

Only 21 percent of travel managers are currently tracking ancillary fees and 41 percent of those that do not track these fees, plan to in the next 12 months, according to the 2011 Corporate Travel Policy Benchmarking and Insight study,  released by the GBTA Foundation, the research arm of the Global Business Travel Association (GBTA) and Egencia, the corporate travel arm of Expedia, Inc.

The new study evaluates travel management trends and policies across North American and European organizations and assesses travel policy effectiveness overall.  New to this year’s study are findings on ancillary fees, which account for eight percent of total travel spending, GBTA says.

“GBTA Foundation research has shown that although business travel continues to rebound from its recession lows, it is growing at a much slower rate than we would like to see,” said Michael W. McCormick, GBTA executive director and COO. “The importance of a carefully managed travel program has never been more important. The 2010 study clearly established the effectiveness of travel policy to help organizations minimize corporate travel costs and we expect this year’s report will be even more effective now that we have points of comparison.”

Based on best practices and insights from 651 primarily North American travel buyers, the study takes a comprehensive look at policy mandates versus guidelines, consolidation, booking procedures, class of service, advanced purchase, pre-trip approval, groups/meetings and emergencies, ancillary fees, among other issues – all of which comprise variables that make travel difficult to standardize.
“Egencia is constantly speaking and engaging with our customers, and one thing is clear – one size does not fit all, and the best travel program solutions are custom-tailored to each company to meet their unique needs, whether that be advanced reporting technology to track spending or a robust offering of preferred rate hotels,” said Mark Hollyhead, Senior Vice President, Egencia Americas. “These hand-crafted programs paired with keen industry insights will allow companies to maximize cost savings and innovate for future industry changes.”

The 2011 survey collected information on if and how companies are tracking ancillary fees, finding that only 21 percent of travel managers in 2011 are currently tracking these fees. Those that do track them rely on data from internal expense reimbursement systems (81 percent), corporate charge cards (53 percent), or Travel Management Companies (TMCs) (23 percent). Of this 21 percent, it is estimated that ancillary fees comprise just over eight percent of total travel spending. For a company that spends $40 million on business travel, this accounts for $3.2 million in ancillary fee spending, the study says.

Travel managers said that they are most likely to reimburse travelers for the following ancillary fees for air and hotel:

·    Air: will reimburse for baggage fees (91 percent), itinerary changes (73 percent), in-flight meals (47 percent), and in-flight Wi-Fi (35 percent).  Fewer organizations will reimburse for preferred seating (13 percent), priority boarding (8 percent), or in-flight entertainment (3 percent).
·    Hotel: will reimburse for parking (89 percent), internet access (84 percent), airport shuttle (70 percent). Fewer companies will reimburse for late check-out (24 percent), early check-in (23 percent), fitness center (21 percent), mini-bar (9 percent), and entertainment (4 percent).
Of the 79 percent of travel managers that do not track ancillary expenses, 41 percent plan to in the next 12 months, and another six percent believe they will within the next two years.  Five percent believe it will take longer than two years or will never happen, and 42 percent confessed that they do not know.
Sixty-one percent of respondents said travel policy is more a guideline than a mandate, and 72 percent said there are few to no consequences for policy violations. The study suggests that organizations could dramatically benefit from better enforcement. The 2010 Corporate Travel Policy: Benchmarking and Insight study found that stricter policies could equate to nearly $30 billion in savings.

The study also explores policy standards around LLFs, which represents the lowest fare that is consistent with a corporation’s travel policy.

·    Booking Windows: 78 percent of 2011 survey respondents include windows in their policy, with 56 percent of respondents requiring travelers to consider lower fare alternatives departing up to 2-hours before or after their originally preferred departure time.
·    Connections: 57 percent of respondents require travelers to accept connections when savings are available.
·    Non-Refundable Fares: 70 percent of responding organizations report that they take advantage of these fares by directing travelers to accept non-refundable tickets whenever they are available. This is a slight increase from the 68 percent reported in 2010.
·    Advanced Purchase: There was a 6 percent increase year-over-year in respondents whose policy instructs travelers to book their airfare at least seven days in advance.

Only 10 percent of organizations allow travelers to upgrade to first or business class (aka, ‘premium class’) on flights within North America.  However, 33 percent authorize business class on flights to Europe, 32 percent to South America, 42 percent on flights to India, Africa, or the Middle East, and 47 percent on flights to Asia-Pacific.  While these percentages are substantially unchanged since 2010, there was a 5 percent decline in companies that do not allow any premium-class air travel, from 47 percent in 2010 to 42 percent in 2011.

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About the Author

George Dooley
George Dooley, Travel Agent’s senior contributing editor covering retail and technology, has a long-standing reputation as one of the top travel industry journalists. He notes...

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By George Dooley | August 17, 2011
Only 21 percent of travel managers are currently tracking ancillary fees, according to a new study by the Global Business Travel Association and Egencia.
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