Managing travel expenses and planning during an economic disruption can be tricky to balance. While many firms contemplate layoffs and other belt-tightening measures, hotel rates in key cities like New York, London, and Paris are predicted to rise substantially next year. With persistent inflation, rising interest rates, and an economic downturn in the upcoming year, there are certain internal operations to prepare for as a private equity firm, even if partnership with a reliable agency is already in place.
Providing the proper tools and support for your operations team and Travel Management Company to get the best deals and prices should not be put on the back burner during the economic downturn. There are always improvements that can be made for your corporate spending strategy. Beginning to monitor where the spending is not optimized is the first step for saving.
Travel spend gets dismissed because of the vital and overwhelming role it plays in business. Your partners need to be at x location, for x meeting, at x time, so your operations team makes it happen while the balance sheet takes a hit. There is little leeway in the caliber of travel and accommodation required of your business partners. Traveling is tiring, so ensuring that your partners are receiving the best service and comfort on their trips is crucial for their overall business performance. Cheap-ing out on corporate travel is not an option. It’s important to use a consistent, repeatable process for negotiating with suppliers.
Firms who outsource travel management services are better prepared for the unpredictable state of hotels, airlines, restaurants, black cars, etc. due to the shortage in talent and operating staff. Benefitting from Group Purchase Operations (GPO) not only saves money by letting mid-market firms punch above their weight, but it also steers business to the suppliers that are working well for peers today.
To combat the uncertainty of the economic landscape, progressive firms outsource travel management. Internal operations and travel agency partners benefit from group purchasing and fixed discount rate contracts that optimize the spend savings for hotel, airline, and ground transportation, while honoring the high expectations and preferences of fussy travelers.
Many of the challenges for corporate travel are related to the destination location and the differences in accommodations. Allowing an industry professional to handle this hefty task enables a sense of security in future corporate travel occasions and the comfort of knowing that amidst the skyrocketing prices, your firm is not wasting a penny.
If you’re concerned, you’re not doing everything you can to sustain success and emerge stronger despite economic headwinds, here are key questions to ask:
- Can you report to your CFO about Travel spend by employee, office location, department, level, and supplier?
- Are your flight discounts tailored to your route preferences (e.g. city pairs?)
- What percentage of travel is booked outside your TMC?
- Do your partners provide both discounts and usage reporting?
- Who negotiates vendor contracts? Is there a consistent process?
Outsourcing corporate travel services saves money, benefits your partners, and takes tasks off the plate of operations teams so they can do their job efficiently. More and more firms are allowing the industry experts to do the travel procurement for a fraction of the cost and time.