Op-Ed: Buyers Need To Rise To Meet Challenge Of Economic Cycle

Look for significant challenges ahead as the U.S. economy braces for an economic downturn that most likely will have direct impact on all of us in business travel. More specifically, company management will challenge all departments, especially corporate travel, to operate with a more keen sense of efficiency. It is incumbent on travel managers to get out in front of this issue with a proactive approach, taking the tools, systems and relationships built over the past few years and optimize travel programs, thus allowing companies to thrive in a market that has economic challenges.

Here is what many have accomplished in the past few years, and if you have not, move forward expeditiously. Companies increased the coverage of preferred supplier relationships and are managing them more effectively; implemented new technology, such as online booking and on-demand reporting tools; consolidated travel programs; and implemented more effective travel policies. Given the new and improved structure in travel programs, travel managers are poised to make dramatic improvements by drilling down on the detailed components of their travel programs, bringing efficiencies through process improvements and cost reduction.

Just a few years ago, companies were struggling with implementation issues surrounding online booking systems; multinational rollouts were a vision, but not much of a reality. Today, companies are working on improving adoptions levels from numbers that are north of 50 percent to levels exceeding 80 percent in some cases, and online adoption is a reality in much of Europe and many parts of the Asia/Pacific, region and is on the march elsewhere.

Travel managers understand their programs better today than they have in the past as a result of new reporting tools, especially dashboard technology that provides easy analysis of trends so that quicker action can be taken in making necessary improvements.

While distribution and content fragmentation are still problematic, especially outside of the United States, at least the industry understands the issues today, has navigated to a degree through some of the major hurdles, and technology has provided opportunity toward a solution. Having said the above, content fragmentation still may be the single most concerning issue related to a corporation's ability to operate seamless and cost-effective travel programs.

Travel managers need to continue to look for efficiencies in their travel programs. Company travel budgets may be reduced, but travel managers who can extend budgets by creating value through programs that reduce unit cost will help maintain a competitive advantage for their companies. How will that happen? Companies may begin to alter corporate travel policies, place more rigor around procurement processes in all spending categories, continue to focus on program optimization through proactive travel management further consolidate multinational programs and review opportunities surrounding meetings management; and renew interest in alternatives to travel such as webcasts, videoconferences, etc.

Meetings consolidation has been the low-hanging fruit for many years. While new technology is available to source, budget and operate meetings, many very large corporations do not centrally manage this spend category. In fact, many do not know how much their companies spend on meetings and thus have little idea of the savings opportunities that exist.

Proactive management may extend to sourcing, where travel managers may want to have conversations with suppliers around the "what if" scenario of travel reduction and their contracts. They should work out a win-win strategy if a significant downturn occurs.

Many companies do not yet fully understand the value that can be derived from multinational opportunities, and continued exploration there is in order. The issue still discussed is operational consolidation versus program consolidation. Both can be beneficial, but the focus should be on the program side (cost of air, hotel, car, etc). Multinational program consolidation provides opportunities to better manage spend through better utilization of preferred contracts.

Continue to be proactive; read, participate in industry events and think out of the box for opportunities to add value to your travel program.