travel tech insights

Like every other sector of the travel industry, steady growth in business travel doesn’t necessarily translate into increased sales for every travel management company (TMC). The travel sector is challenging because the business model is complex and competition is fierce.

Part 1 of this series explored why controlling the cost of employee travel is difficult due to issues that cannot be eliminated and are not easily handled. Part 1 also discussed why these difficulties often lead organizations to use travel management companies (TMC) for their business travel -  with their responsibilities ranging from administering corporate travel policies to booking employee business trips.

Business managers often find the challenges of controlling business travel costs to stay top of mind for two reasons: 1) travel costs often appear deceptively easy to manage and control – only to turn out to be quite the opposite; 2) travel is expensive, meaning these costs can quickly become significant if not controlled.  Travel costs appear easy to control because the amounts almost always require a formal approval mechanism. However, travel approval procedures in most companies tend to stumble in two ways.

The release of BridgeStreet Global Hospital’s The Bleisure Report 2014 introduced a new term to the travel industry and revealed the idea of combining business and leisure travel – far from being outlandish – was a reality for a sizeable number of people and poised for growth.  The report found that 83% of global business travelers take time on business trips to explore their destination cities and 37% add personal leave days to most or all of their trips. The key word to notice is “global” business travelers, because it makes all the sense in the world to maximize international airfares bought by employers.

With continuing consolidation, intense competition and a global economy seemingly unable to break free from lackluster growth, there is relentless pressure on travel companies to discover new ways of: differentiating from competitors; marketing with better results; developing even more innovative services; and strengthening customer loyalty. Since all these endeavors cost money, smart companies begin by identifying and eliminating needless expenses. One of the overlooked places to uncover monetary – and productivity - leaks are manual workflow activities that can be optimized with back office automation.