Corporate travel has been on the decline. This is due to a number of factors, the most significant being the faltering global economy, which is restricting corporate travel budgets. All companies feel the pressure to tighten their belts, and travel is one of the first areas of expenditure to be cut during tough times. Other factors include the rising cost of travel and concern for the effects of travel on the environment.

However, it must be recognised that corporate travel is not an option but a necessity. Globalisation and the opportunities presented by a flourishing Asian economy have meant that many companies have partners, branches or affiliates regionally and globally. While communication on a daily basis between partners or clients may be solved by telecommunications, email or videoconference calls, nothing beats the effectiveness and relationship-building capacity of a face-to-face meeting. Corporate travel is thus a very necessary part of doing business on a regional or global level.

Rather than eliminating travel completely, corporations are increasingly looking to technology to make their travel processes more efficient and cost-effective. This review of travel processes may be mandated by their regional or global headquarters, or because they are under scrutiny from regulatory bodies.

For travel management companies and travel agents, this means corporate clients are eager for suggestions on ways to maximise efficiencies of scale, minimise paperwork, gain value added services and drive a healthy impact on the bottom line.

Cost-cutting options for corporations

Corporations that are concerned with reducing travel costs recognise the need to streamline processes and negotiate the best deal possible.

One good example of this is the growing trend of large companies being savvy enough to carry out direct negotiations with travel suppliers, such as airlines, hotels, and Travel Management Companies (TMCs). More recently, those with heavy travel volumes have even begun to negotiate directly with Global Distribution System (GDS) companies.

Another more viable option for companies of various sizes is the implementation of travel management technologies. In these cases it is crucial that the company selects the right technology for their needs.

For example, most corporations are simply looking for some element of control or visibility over their travel processes. This can be easily solved by implementing online tools, like the Amadeus e-Travel Management (AeTM) online booking tool.

This easy-to-implement, simple-to-use tool can be integrated with an existing corporate travel policy and expenses network. Under the administration of the company’s TMC, it allows both control and visibility – control in ensuring compliance with travel policy, and visibility in the form of reporting functions. AeTM allows TMCs to critically analyse which areas their clients are spending the most money. This in turn gives the corporation more bargaining power when negotiating with suppliers. For example, if a full overview of a company’s travel spending reveals significant expenditure with a particular hotel chain, negotiation on rates with that hotel can be much more effective. Take this negotiation to a global level and one’s bargaining power is thus multiplied greatly.

As such, the need for control and visibility is satisfied at a basic level of investment. Other more advanced levels of corporate technology solutions, such as security services and traveller profile management, can then be added as needed, to provide additional value for corporate customers.

Benefits of a consulting approach

At Amadeus we are taking on more of a consulting role, as our customers value our expert advice in how to get the most out of technologies that they are investing in. We expend a lot of time and effort in conducting a thorough analysis of a corporation’s existing travel process, from the moment a booking is made, all the way through to when travel expenses are paid. After mapping out the current practice, the company thus has a clear picture of what real value can be gained from applying Amadeus solutions.

This same principle will help travel agents to remain relevant in today’s travel industry. The travel agent community is a key introducer of technology solutions to corporate clients. Travel agents themselves also benefit when they offer this additional level of ‘consultancy’ to their clients. Offering new tools to help corporations overcome their challenges will be viewed as another layer of ‘value-added’ service. This helps to build a stronger relationship between travel agent and client, and lays the foundation for a long-term partnership.

Travel agents are drivers of industry change, being equipped with the knowledge of the travel landscape that their clients do not have. Advice and consultancy on tailor-made solutions for a company are crucial for gaining competitive edge in the increasingly crowded travel agency environment.

In the end, it all boils down to each company’s specific situation and needs. There is no one-size-fits-all solution, and each case has to be evaluated on its own points. In our current uncertain economy, a company can ill afford superfluous spending with no real advantage, and this is why professional advice from TMCs, travel agents, and solutions providers is so important.