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Most of BT Group global category manager Jan Tucker Jones' time has been spent controlling the company's air and hotel costs, which together account for about half of BT's overall travel and entertainment spend. After tightening up in those areas during the past few years and cutting annual travel spending by about 40 percent, to roughly £80 million (US$120 million), Jones now is turning to areas that often take a backseat in managed travel programs including food and beverage, rail and chauffeured cars.
"Fifty percent of my spend goes on other things, apart from air and hotel, which is quite remarkable," said Jones, speaking here this month at the Business Travel Market conference. "Yet, 80 percent of my time is spent on the airline deals and hotel--it's strange."
In fiscal year 2007, travel spending outside of air and hotel on average represented about 34 percent of total T&E costs for a typical organization, according to a Procurement.travelsurveyof 473 travel managers. Of that, meals and entertainment represented 14 percent, car rental 9 percent, airport transfers 4 percent, travel program management 3 percent, rail 2 percent and other items 2 percent.
BT already secured discounts for food and beverage from all of its preferred hotel properties. By examining expense reports, credit card data and other reports, Jones now is in the process of pinpointing other areas of spend that can be contracted and negotiated.
"We try to get the granularity to see if anyone spends money" on particular suppliers, she said. "Food and beverage is a massive area for new contracts."
For example, Jones is contracting with a local Starbucks for a corporate discount because many employees are purchasing coffee and food from the chain. "If you go to the local Starbucks [near BT headquarters in London], half of BT is in there," she said. "It's just common sense. It's a very small example of what we are trying to do; it is about really understanding where you can squeeze that extra discount."
BT's goal is to "put contracts in place so that we start managing [food and beverage] and we get to the same level we are with our managed hotels" in terms of spend management and employee compliance to preferred supplier programs, Jones said.
Although car rental costs for BT are lower than F&B expenses, and despite car rental being "a fairly well-managed commodity," Jones said, there is room for improvement to "squeeze" every bit of savings by, for example, "making sure that people actually refill their car instead of paying the [fuel] premium."
Challenges associated with communicating such policies, and new preferred relationships with food and beverage providers, eased somewhat when BT's CFO became more involved in containing T&E costs. Spending outside of air and hotel "is so high, it's unbelievable," Jones said, and the CFO realizes that.
"Internally, communication in such a large organization is always challenging," Jones explained. "Across several lines of business, I've got a CFO representative from each team that I work with. We have a face to face meeting on a monthly basis going through a name-and-shame list. Around food and beverage, we have an internal Web page that people can read, and each line of business has its own intranet and information goes on there. It's about trying to get [communication] at the right level, rather than trying to send out a blanket email from myself, which would just get deleted."
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