Economy

Time to rethink your travel budget

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Fare hikes, higher taxes, the oil crisis, flight cancellations and industrial action are creating havoc for business travellers. We ask Australian business travel experts how your business can handle the turbulence. BY EMILY ROSS

By Emily Ross

Travel budget woes

Fare hikes, higher taxes, the oil crisis, flight cancellations and industrial action are creating havoc for business travellers. We ask Australian business travel experts how your business can handle the turbulence.

Business travellers, the next financial year is looking tough.

And it is not just the engineer strikes, queues snaking through airports, the hour-long waits for airport taxis and standing-room only in the Qantas Club.

Corporate travel firm Voyager Travel has just completed a survey of its clients, which includes Harvey Norman, Sussan and Spotless. The survey found that clients were anticipating increases in their travel costs of 10% to 15% for the 2008-09 financial year, a figure widely agreed upon by senior travel agents around the country.

For some businesses these cost increases mean slashing travel costs by a similar 10% to 15% to neutralise the impact; for others it means finding the money to cover the steep rise.

In May alone, Qantas raised international fares by 7%, and 6.5% on domestic fares. Virgin Blue raised its domestic fares between $5 and $10, and all three major domestic carriers trimmed their flight schedules.

“We understand the situation the airlines are in because we see it when we are filling up our cars,” says Voyager Travel chief executive Richard Savva. “For now, people are grinning and bearing it.”

Savva’s clients might be grinning and bearing, but they are also embracing ways to keep travel spending under control.

The survey showed that Savva’s clients were taking several key initiatives:

  • Use more video conferencing.
  • Embrace online conferencing and seminars (webinars).
  • Buy restricted airfares.
  • Book air tickets 10 days in advance.
  • Plan more interstate day trips to cut back on expensive overnight stays (but be smart and book that first meeting for midday in case of delays).
  • Refuse to reimburse travel expenses that do not comply with the company’s travel policy.

Savva says companies are getting much tougher on employees who ignore travel policy. “They’ve had enough of people flouting the travel policy.” Two of his clients refuse to reimburse travel expenses that do not conform to their company’s travel policy. “It’s the only way to deal with it,” he says.

Similarly, best fare of the day means different things to different people. “Travel policies are open to interpretation. You need to be very strict,” he says. Some Voyager clients use an online booking solution that limits the airfares that users can see, so there is no temptation to book more expensive flights.

Travellers need to be prepared for flight cancellations. Industrial action from Qantas engineers saw six Melbourne to Sydney flights cancelled on Monday 23 June, 2008. Qantas’s executive general manager people Kevin Brown said in a statement: “We expect to get all customers to their destination on the day they choose to fly.” In other words, expect to get where you want to go on the day you fly, but not necessarily at the time you want to get there.

It pays to be realistic and have a plan for flight cancellation. Qantas has a handy SMS service to notify of delays or flight cancellation.

What to do if your plane gets cancelled

“If it is a low-cost carrier, it is about who screams the loudest,” says Tanya Anderi, corporate travel manager at Phil Hoffman Travel. In principle, here’s how to handle the situation.

First stop, call your travel agent. If you don’t have one, join the queue at the service desk or jump online and try to change your flight.

If you are not happy with the outcome:

  • Ask to speak to a supervisor. (If it is a Jetstar flight, they will have more authority to offer a re-route on Qantas.)
  • Don’t take no for an answer.
  • Get a meal and/or accommodation voucher.
  • Be prepared to “lose” an inflexible fare and buy the first available fare (often with another carrier) if the meeting is important.

Alternatives to travel

Senior HR consultant with the Talon Group, Sue Bourke, has found both candidates and clients alike are pushing back on travel expenses. “We are using methods like Skype for the first interview rather than flying people in first,” she says.

Corporate social responsibility advisory firm Positive Outcomes has been embracing web conferencing, or webinars, using WebEx for meetings between the Sydney and Melbourne office, for tie-ins with clients and for its work as a member of the London Benchmarking Group that measures corporate community investment around the world.

“It’s the time factor,” says Positive Outcomes consultant Gabrielle Kay. She recently used WebEx for a weekly catch-up with a major corporate client. Using the technology, both Kay and the client could collaborate on a presentation document in real-time.

Kay sees the costs of web conferencing as “minor” in comparison with travel cost savings. The technology can allow up to 1000 people to “attend”, although Kay’s webinars have included up to 30 people. To bring those people together face-to-face could easily cost $20,000.

The technology also makes it easier for clients to “join in” to meetings whether they are across town, interstate or offshore, and participants are able to upload presentations for the conference. The technology also means a lighter carbon footprint, which works with the company’s brand values.

Kay still has to fly (it’s New Zealand this week) however she has web conferencing to fall back on if her flight is cancelled. “We try not to travel too much,” she says, a pattern that will continue. Kay cites the looming carbon emissions trading scheme to be introduced in Australia as an indicator that airfares will rise even further.

Internet monitoring firm Hitwise has also embraced the web for meetings and presentations, in particular interactive online webinars. Hitwise runs at least two per month for clients. Some sessions have 30 online, others such as its recent webinar on how to protect your brand had 100 attendees, and more than 700 uploads since.

“It is an incredibly easy way to reach clients,” says Hitwise spokesperson Rheika Tompkins. “And they can access it at anytime afterwards. We see it as an addition rather than an alternative to travel.”

SmartCompany has run a series of webinars on sales, hiring and web strategy. Click here to view the archive, and here to see the next SmartCompany webinar. They are free and simple to sign up for.

With travel budgets rising up to 15%, no business can afford to not to smarten up its travel strategy. Says Savva: “It’s a perfect time to improve travel management.”

 

Read more on business travel tips and using webinars

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