Coping With Travel Anxiety: A Guide

For first-time travellers, single trip holiday insurance can help reduce a lot of anxiety. Here are a few other tips to consider.

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For many people, the thought of travelling to a new place is something that is incredibly exciting; however, for quite a few people, it can actually be frightening. According to studies, travel anxiety affects as many as 15% of all travellers, including seasoned ones. The good news is, only a small percentage of sufferers experience extremely severe symptoms, such as debilitating panic and phobia. However, even the milder forms of travel anxiety, such as mild paranoia or niggling discomfort, can negatively affect your enjoyment of your trip.

Fortunately, there are ways minimize travel-related anxiety, such as making sure you are packed for every eventuality and making sure you are covered by single trip holiday insurance. Just like its indicators, the sources of travel anxiety are wide and varied. Pinpointing the source of your unease is the first step to finding the best way to minimize or overcome travel anxiety.

Below, we present a few of the most common sources of travel anxiety and tips on how to cope with them.

Fear of loneliness

For first-time travellers especially, leaving the support of your family and loved ones, for an unfamiliar place filled with strangers can be paralysing. Fortunately, with today’s communications technology, it’s easy to keep in touch with friends and family—you can even make voice or video calls during a flight! (Just be sure to follow the instructions of the flight attendants regarding on the use of electronic devices on board.) A good single trip holiday insurance plan can covers your possessions in the event of loss, theft, or damage, so go ahead and take your phone, laptop, tablet, or any the communication device you need.

Fear of being stranded

A common horror story among travellers is something going wrong in terms of delays, whether for mundane reasons such as cancelled flights or emergencies such as natural disasters or terrorist attacks. In most cases, this may be a purely financial concern—many travellers have a set budget and cannot afford to stay extra days on holiday, buy another plane ticket, or to lose income because they cannot return to work on schedule. But for others, it can be a very real fear of being stuck in a foreign place unable to go home. Fortunately, in both cases, having single trip holiday insurance is a welcome solution.

Depending on your plan, a policy can provide coverage against financial loss in the event of cancelled flights, as well as access to emergency and evacuation services in the event of natural disasters, terrorist attacks, and even political unrest. Unfortunately, we can’t always avoid bad situations, no matter how careful we are, but knowing you’ll always have a way to come home can go great lengths to minimize travel anxiety.

Fear of getting ill or hurt

Being extra cautious when you’re travelling is always a good idea; however, this is not always enough. Accidents can still happen, or you could suffer a negative reaction to unfamiliar food, for example. The thought of getting sick or hurt is worrying enough when you’re safe at home and that anxiety multiplies when you’re in a strange place, with no access to your family doctor or your usual medical services. No wonder getting ill or hurt is a major source of travel anxiety! Having good single trip holiday insurance may not prevent you from getting ill or hurt, but it does ensure you have access to emergency and medical services during your travels – including medical evacuation services, if necessary. That, alone, can provide huge peace of mind to nervous travellers.

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Elements of a Strong Corporate Travel Program

In order to make the most of your corporate travel budget, it is critical to plan for leveraging your program for all it is worth. Telling travelers to select the lowest logical airfare is just not enough. Here are the elements that should be considered when planning or evaluating your travel program.

1. Travel policy

A well written and disseminated travel policy is the foundation of any good travel program, and I am consistently amazed that so many corporations have such an outdated and poorly conceived travel policy, if they have one at all. It is not difficult to find a well written policy. One can be found online quite easily. All that remains is that it is edited to reflect corporate culture, and disseminated within the company so that everyone understands and agrees to follow it. For this reason, it is a good idea to have everyone sign a copy of the travel policy to ensure that it is read, understood and owned by all company staff. I suggest that everyone in the company signs a copy of the travel policy, whether they travel or not. They may change positions in the company later and be required to travel. A travel policy need not be long or complex. Some of the best travel policies I have ever seen were only a few pages long.

2. Centralized travel internally and externally

Many companies do not centralize their travel program, and they pay a price in terms of a loss of expense reduction opportunities and internal efficiencies. Many companies that do not centralize travel have a fear of requiring travelers to do something they may not want to do, along with the idea that centralizing travel will require hiring a Travel Manager. Both of these may be legitimate concerns but they do not have to be in most cases. By requiring travelers to book centrally, you are not necessarily causing them to lose flexibility. You can centralize travel while still allowing travelers to book on their own, either with a travel agency of your choice, or online through a provider that you have partnered with and have confidence in. By assigning someone with the responsibility of overseeing travel, you are getting a single point of contact both internally and externally for travel issues. If your company spends less than $1 million in air travel, you probably do not need a full time travel manager. In these cases, travel oversight can be given to the finance department, human resources, or even an executive level assistant. Here is a look at the advantages to be gained by centralizing travel.

When you centralize travel with a single agency, you gain in a number of important ways. You will have a single point of contact for problems while travelers are on the road, and you will have one entity to go to for all your travel needs. This eliminates the problem of consolidating a travel report from among several sources. By bringing travel together, you will gain significantly from economies of scale. If you can measure total travel among various divisions or locations, you can get more for your money from travel suppliers. This will allow you to gain more from airline soft dollar programs, which means more free tickets and upgrades, get a higher percentage discount from our preferred airline, and get better negotiated rates from your hotel and car contracts. Your fulfillment costs will decrease as well, as your travel agency will often discount their fees for a higher overall volume of travel.

3. Mix of online booking and personal service

This is an addendum to the previous element, which calls for centralizing travel with one travel agency. This is important, but in doing so, you need not require travelers to use an online booking system, and you need not require travelers to call the agency directly. By offering travelers the option of doing either, you are accomplishing several goals. You will reduce your fulfillment costs, as online booking is cheaper in terms of a service fee. By giving travelers the option, you are giving them a sense of control, thereby increasing morale and standing a better chance of a high adoption rate. Thirdly, you leave open a best practice of using your online booking engine for less complex itineraries, and allowing senior executives, frequent travelers, and complex itineraries to be booked directly with a travel agent that can offer a higher level of service and a better overall travel experience where it is most warranted.

4. Look under every stone

While the bulk of most travel programs revolve around the air budget, there are several other areas one can investigate to find savings opportunities. There are a couple of more obvious areas to look, such as negotiated hotel rates at your favorite hotels, or car rental discounts with a favored supplier. Often your travel agency will already have discounted rates through consortia affiliations and agency car contracts. There are also some less common areas that should be investigated. For example, if ground transportation is a concern, most suppliers will offer discounted rates and a direct billing option. Direct billing arrangements with hotels and car rental agencies are also a great way to increase efficiencies and make the job of the accounting department easier.

5. Leverage hard dollar and soft dollar contracts

Most major airlines today offer hard dollar discounts as well as soft dollar incentives in exchange for company loyalty to their product. If your travel program is over $1 million in air spend, you can secure a discount off of the lowest fares of your carrier of choice in return for a market share commitment. For your secondary carriers, or if your volume is less than the minimum required by the airline, you can enter in to soft dollar programs for free tickets and free upgrades, as well as traveler status enhancements or airport club passes. These programs require little in the way of volume, but they are not well publicized so you may need to hunt for them or ask Baker Travel or your current agency to point you in the right direction.

6. Do not neglect hotel volume

Hotel volume is sometimes overlooked but it should not be. Negotiated rates can be had through your travel agency or directly with the hotel properties of your choice. Individual hotels near corporate locations will negotiate discounted rates for you in exchange for a minimum room/night commitment. By utilizing a travel agency, you are likely to receive discounts of 5% to 50% on thousands of hotels worldwide.

7. Have at least one car rental contract

Rental car contracts are easy to enter into and require little in the way of commitment from the corporation. Choose a partner that has airport locations and a reputation for excellent customer service. You can save 5-10% very easily and can also negotiate frequent renter membership for all your employees. This will make them more efficient and enhance morale. You can also enter in to direct billing agreements at the same time that can make the jobs of your travelers and accounting staff much less stressful.

8. Understand group and meeting contracts

Airlines and hotels will discount your fares and rates when you have groups traveling together or meeting at a single destination from multiple points of origin. These meeting contracts can bring you airfare discounts of 2-10%, and if you have enough travelers on a single airline, you may be able to negotiate for free tickets to be awarded at contract completion. The minimum requirement is usually 10 travelers going to the same place at the same time. Some airlines have higher minimums so be sure to ask before a contract is generated. Hotels will discount their rates in a similar way with a minimum of 10 room nights. These discounts can range from 10% to a much higher discount depending upon occupancy rate and seasonal variances.

9. Use reporting to consistently improve metrics

Well managed travel programs require constant monitoring and financial controls to be properly leveraged. Insist on timely and customized reports that can be designed to bring you the information you need most. By receiving regular reporting on traveler behavior and provider contract performance, you will be in a better position to fulfill contract obligations, achieve cost reduction objectives and see where opportunities for future savings may lie.

10. Use all avenues to enhance traveler comfort and efficiency

Lastly, any well managed travel program will take in to account the comfort and productivity of their travelers. When travelers are comfortable, they can focus on their main priorities that help propel your business forward. If travelers are happy, they perform at a higher level. Ask if your travel agency can upgrade traveler status on a preferred airline. Look in to purchasing blocks of airport club passes so they can be used strategically during long and complex itineraries. There are many ways to reward travelers for the difficult and often grueling chore of travel. These kinds of rewards generate feelings of loyalty and increased productivity and efficiency.

Start a Home Travel Business and Profit From the Multi-Billion Dollar Online Travel Industry

Yes, it is true. You can make money online working from home and can actually make a lot of money if you work hard, stay focused and execute. You can build a home travel business and live the Internet lifestyle you always dreamed of by operating an online home travel business. This article will put to rest any misgivings you may have had about starting an online travel business. I will not sugar coat it. In fact much of what I have to say will probably cause an up-roar in some parts of the online travel industry. I am aiming to tell it like it is.

The TRUTH!
Who really Makes Money in Online Travel. The truth is that you can’t really make a lot of money reselling other businesses travel products. This statement is directed towards the home-based travel agent market. Yes, its easy to get started as a home-based travel agent and the online travel agencies can provide you with your own personalized white label branded website, including quality customer support but in the end you are NOT building a business, you are only paying yourself a salary.

Don’t be fooled.

I am amazed at the amount of junk that there is online out there catering to the make money online from home crowd, touting selling travel as the route to freedom and riches. This truth is probably the most important fact anyone will ever tell you if you are just thinking about entering the online travel business. Let me repeat this for you one more time.

It is difficult to become rich and build a company reselling other companies travel products. You can become rich over time by building a business that sells your own uniquely branded travel products. You can get rich and build a business if you “own the travel product.”

Owning the travel product means that you are contracting directly with travel suppliers under your company’s own contracts, you are not just reselling a travel product owned by another travel business, tour operator, travel agency or travel consolidator. Your business creates the travel product by doing deals directly with travel suppliers. Your contracts with the travel suppliers become your businesses own unique inventory for the travel products you will be selling. The new travel product becomes your own brand. Your online travel business sells the travel product directly to consumers online or wholesales it too other travel agencies, travel agents, tour operators and resellers.

The Home based Travel Agent Dilemma.
I know I am opening up a can of worms here by disclosing this information but it’s really the truth. My intent is not to knock anyone down but to provide insight into how the online travel business really works and to show you WHO is really making the money and how you can make real money by deciding from the get go to actually build a business.

Yes, if you want to make $20,000-$50,000 working from home then reselling cruises or popular travel products will be the best option for you but if you want to make real money, six or seven figures and you want to build a business that has real tangible value and can be sold later then you need to develop and sell your own travel products.

The Internet is NOT causing Travel Agencies too shut down.
I believe that the main reason that brick and mortar travel agencies are closing is not because of the Internet but because all they are really doing is reselling other companies travel products. The Internet contributed to the destruction of the traditional brick and mortar travel agency but the biggest factor in the down fall of travel agencies and travel agents in the travel industry is due to the fact that they are not selling anything unique or different from anyone else. It’s really a business model established to fail in the long run.

How do you own your own travel product? You can own your own travel product in two different ways.

1. Your business acts as a travel supplier providing tours, guiding, travel and tourism related activities or you own a lodging property.
2. Your business partners with two or more travel suppliers to resell their individual travel products under a unique package that you own.

What type of Online Travel Business do I need to start where I can own my own travel product, sell packages and build a real business?

-Online Travel Agency
-Online Tour Operator
-Online Tour Guide
-Online Travel Broker
-Receptive Tour Operator
-the Hybrid

Let’s discuss a little about each type. There are many directions you can go.

OTAs or Online Travel Agencies traditionally sell everything underneath the sun; including lodging, air, cars, vacation packages, and much more. On a hierarchy level of all online travel businesses, this would be the most expensive and most challenging type of online business to start. It’s doable don’t get me wrong it would just take much longer and be more expensive to startup.

If you second tier niche and focus on contracting your own lodging deals and contracting with activity suppliers you could easily build a smaller more focused OTA. Another option would be for you to utilize the Global Distribution System (GDS) for air, car and for lodging that you could not contract yourself. I don’t recommend this last option as you’ll be just reselling product you don’t own but as long as you can combine the non-owned GDS products with your own contracted travel products you could create a nice win-win for the bottom line.

Online Tour Operator’s sell dynamically packaged trips and pre-packaged trips to vacationers. I believe building an online tour operator business is your best option at building a successful online travel business.

Now let me first state that the name is a little miss conceiving because of the word “Tour.” There is a big difference from a tour and a trip. On a tour there usually is a tour guide or person leading the tour with the travel participants. On a trip the traveler is traveling by themselves or with other people but there is no tour guide involved. In the travel business they call this a FIT trip, Drive vacation or Fly-Drive package.

I favor selling trips, where the traveler buys a tour or trip product then attends the trip by themselves on their own time. The reason being for this is two parts.

1. You don’t have to be the tour guide and you don’t have to hire one either.
2. You have 100% more freedom by not actually participating in the tour itself. Just think of the time involved of actually going on a tour with a group or individual people.

We operated tours when my wife and I owned the Yellow Breeches House Fly Fishing Lodge and B&B. We ran fly fishing excursions with lodging and guiding. Guess who was one of the guides? Yes, you got it. Yours truly. I would not change the past for anything. I learned so much from being a fly fishing guide and owning a lodging property. I just wouldn’t want to run that type of business again. There are much better travel business models out there. That’s part of the beauty about this report is that I am able to share some true life, realities for you.

Sell Trips not Tours. This is the most important thing I can tell you regarding wanting to live the Internet life style and working from home enjoying the freedom that comes from owning your own online travel company. You won’t be living any Internet lifestyle if every week you are giving tours.

Online Tour Guide’s provide tours to individuals and or groups. If I didn’t scare you off from above that’s ok, the tour guide business is a great business and it’s easy to get started with limited investment. This is a great business to enter the travel business and starting learning about how to build a business.

If you love dealing with people and spending much of your time outside then this is probably the best travel business for you. This is serious work, day-in-and-day-out, as you are always outside in the elements. This travel business could be a stepping-stone for you to then go ahead and build an online tour operator business. I have a really good friend that owns a kayaking guide service. He runs eco-adventures that include island hoping for three to five nights. He just loves it.

Let me share a little strategy with you that will totally change the way you build or grow your existing tour guide business. Hopefully by now you’ll already see it and be way ahead of me but if not here it is.

Create packages for your tour guide business that includes lodging, meals and your guide or tour service. You probably sell trips, guiding and or tours as an hourly or day product. Take the next step and package in lodging and meals and maybe a third activity. Sell packages to your clients and you will super-charge your revenue in a very big way.

Example:
Take an existing kayak guide that sells day trips for $250 for 2 people. Now create overnight packages. Create a new product line for your business.

1. Contract with a lodging supplier to buy lodging for your kayak packages.
2. Contract with two local restaurants to buy dinners for your kayak packages.
3. Sell a 2 night, 1-day kayak excursion, with 2-dinners. Make money off the lodging, dinners and a 3rd activity and you can seriously start adding more profits to your business.

Online Travel Broker – this is a new business category I stumbled upon. I believe this is a type of business you could start with literally no money. It’s just a matter of understanding the travel business. Here is how an online travel broker operates.

Every travel supplier needs sales representatives. Your travel broker business contracts with travel suppliers to represent their business and help them sell more of their travel products. Many smaller travel businesses don’t have sales representatives. This may be your entry into the online travel business industry.

Let’s say you live in a resort town or area and there are 4 golf courses nearby or 3 ski resorts. You represent the travel supplier’s products, finding larger partners and or resellers that would resell or distribute your client’s products. This business is just a matter of finding other travel suppliers that need sales representatives and finding larger companies looking for new travel products to sell and distribute. You make money by earning a percentage of all future sales booked or earn a flat fee per contract you sign. This would be a great way to enter the travel business as a part-time business. You could start with not much investment and build out slowly.

Receptive Tour Operators receive inbound travelers from foreign countries. This is a B2B business (business-to-business). You build an Online Tour Operator business but you don’t sell your travel products directly to consumers or vacationers online, you sell your owned travel products to wholesalers or other tour operators in foreign countries that then resell them directly to travel agencies and the consumers in their country. If you live in a world- renowned destination area or region where foreigners come visit you can build a successful receptive tour operator business. The receptive tour operator business takes longer to develop as the buyers of your travel products will be other travel companies, tour operators and seasoned travel business won’t necessarily want to do business with a company that is new or just in startup mode. Adversity can be overcome though, through focus, determination and having an owned travel product that a wholesaler or foreign tour operator believes he can sell and make money.

Base Tendriling Travel Expenses

As business travel expenses nose upward, companies are realizing that better cost-management techniques can make a difference

US. corporate travel expenses rocketed to more than $143 billion in 1994, according to American Express’ most recent survey on business travel management. Private-sector employers spend an estimated $2,484 per employee on travel and entertainment, a 17 percent increase over the past four years.

Corporate T&E costs, now the third-largest controllable expense behind sales and data-processing costs, are under new scrutiny. Corporations are realizing that even a savings of 1 percent or 2 percent can translate into millions of dollars added to their bottom line.

Savings of that order are sure to get management’s attention, which is a requirement for this type of project. Involvement begins with understanding and evaluating the components of T&E management in order to control and monitor it more effectively.

Hands-on management includes assigning responsibility for travel management, implementing a quality-measurement system for travel services used, and writing and distributing a formal travel policy. Only 64 percent of U.S. corporations have travel policies.

Even with senior management’s support, the road to savings is rocky-only one in three companies has successfully instituted an internal program that will help cut travel expenses, and the myriad aspects of travel are so overwhelming, most companies don’t know where to start. “The industry of travel is based on information,” says Steven R. Schoen, founder and CEO of The Global Group Inc. “Until such time as a passenger actually sets foot on the plane, they’ve [only] been purchasing information.”

If that’s the case, information technology seems a viable place to hammer out those elusive, but highly sought-after, savings. “Technological innovations in the business travel industry are allowing firms to realize the potential of automation to control and reduce indirect [travel] costs,” says Roger H. Ballou, president of the Travel Services Group USA of American Express. “In addition, many companies are embarking on quality programs that include sophisticated process improvement and reengineering efforts designed to substantially improve T&E management processes and reduce indirect costs.”

As companies look to technology to make potential savings a reality, they can get very creative about the methods they employ.

The Great Leveler

Centralized reservation systems were long the exclusive domain of travel agents and other industry professionals. But all that changed in November 1992 when a Department of Transportation ruling allowed the general public access to systems such as Apollo and SABRE. Travel-management software, such as TripPower and TravelNet, immediately sprang up, providing corporations insight into where their T&E dollars are being spent.

The software tracks spending trends by interfacing with the corporation’s database and providing access to centralized reservation systems that provide immediate reservation information to airlines, hotels and car rental agencies. These programs also allow users to generate computerized travel reports on cost savings with details on where discounts were obtained, hotel and car usage and patterns of travel between cities. Actual data gives corporations added leverage when negotiating discounts with travel suppliers.

“When you own the information, you don’t have to go back to square one every time you decide to change agencies,” says Mary Savovie Stephens, travel manager for biotech giant Chiron Corp.

Sybase Inc., a client/server software leader with an annual T&E budget of more than $15 million, agrees. “Software gives us unprecedented visibility into how employees are spending their travel dollars and better leverage to negotiate with travel service suppliers,” says Robert Lerner, director of credit and corporate travel services for Sybase Inc. “We have better access to data, faster, in a real-time environment, which is expected to bring us big savings in T&E. Now we have control over our travel information and no longer have to depend exclusively on the agencies and airlines.”

The cost for this privilege depends on the volume of business. One-time purchases of travel-management software can run from under $100 to more than $125,000. Some software providers will accommodate smaller users by selling software piecemeal for $5 to $12 per booked trip, still a significant savings from the $50 industry norm per transaction.

No More Tickets

Paperless travel is catching on faster than the paperless office ever did as both service providers and consumers work together to reduce ticket prices for business travelers. Perhaps the most cutting-edge of the advances is “ticketless” travel, which almost all major airlines are testing.

In the meantime, travel providers and agencies are experimenting with new technologies to enable travelers to book travel services via the Internet, e-mail and unattended ticketing kiosks. Best Western International, Hyatt Hotels and several other major hotel chains market on the Internet. These services reduce the need for paper and offer better service and such peripheral benefits as increased efficiency, improved tracking of travel expenses and trends, and cost reduction.

Dennis Egolf, CFO of the Veterans Affairs Medical Center in Louisville, Ky., realized that the medical center’s decentralized location, a quarter-mile from the hospital, made efficiency difficult. “We were losing production time and things got lost,” he says. “Every memo had to be hand-carried for approval, and we required seven different copies of each travel order.” As a result, Egolf tried an off-the-shelf, paper-reduction software package designed for the federal government.

The software allows the hospital to manage travel on-line, from tracking per-diem allowances and calculating expenses to generating cash advance forms and authorizing reimbursement vouchers. The software also lets the hospital keep a running account of its travel expenses and its remaining travel budget.

“Today, for all practical purposes, the system is paperless,” says Egolf. The software has helped the hospital reduce document processing time by 93 percent. “The original goal focused on managing employee travel without paper,” he says. “We have achieved that goal, in part due to the efforts of the staff and in part due to the accuracy of the software.”

With only a $6,000 investment, the hospital saved $70 each employee trip and saved almost half of its $200,000 T&E budget through the paper-reduction program.

Out There

Consolidation of corporate travel arrangements by fewer agencies has been a growing trend since 1982. Nearly three out of four companies now make travel plans for their business locations through a single agency as opposed to 51 percent in 1988. Two major benefits of agency consolidation are the facilitation of accounting and T&E budgeting, as well as leverage in negotiating future travel discounts.

A major technological advance that allows this consolidation trend to flourish is the introduction of satellite ticket printers (STPs). Using STPs enables a travel agency to consolidate all operations to one home office, and still send all necessary tickets to various locations instantly via various wire services. As the term implies, the machinery prints out airline tickets on-site immediately, eliminating delivery charges.

For London Fog, STPs are a blessing. London Fog’s annual T&E budget of more than $15 million is split equally between its two locations in Eldersburg, Md., and New York City. Each location purchases the same number of tickets, so equal access to ticketing from their agency is a must. With an STP in their two locations, the company services both offices with one agency in Baltimore. Each office has access to immediate tickets and still manages to save by not having to pay courier and express mail charges that can range up to $15 for each of the more than 500 tickets each purchases annually.

Conde Nast Publications’ annual T&E budget of more than $20 million is allocated among its locations in Los Angeles, San Francisco, Chicago, New York and Detroit. Since 1994, travel arrangements have been handled by a centralized agency, Advanced Travel Management in New York City, by installing an STP in each of these five locations. In addition to increased efficiency due to consolidation, Conde Nast now has the ability to change travel plans at a moment’s notice and have new tickets in hand instantly.

The real benefit is that the machines are owned and maintained by the travel agency., so there is no cost to the company. Due to the major expense involved, however, STPs remain an option only for major ticket purchasers. “STPs are a viable option in this process for any location that purchases more than $500,000 per year in tickets,” says Shoen.

As airfare averages 43 percent of any company’s T&E expenses, savings obtainable through the various uses of technology have become dramatic. For example, the ability of corporations to collect and analyze their own travel trends has led to the creation of net-fare purchasing-negotiating a price between a corporation and an airline to purchase tickets that does not include the added expenses of commissions, overrides, transaction fees, agency transaction fees and other discounts.

Although most major U.S. carriers publicly proclaim that they don’t negotiate corporate discounts below published market fares, the American Express survey on business travel management found that 38 percent of U.S. companies had access to, or already had implemented, negotiated airline discounts. The availability and mechanics of these arrangements vary widely by carrier.

What’s the Price?

Fred Swaffer, transportation manager for Hewlett-Packard and a strong advocate of the net-pricing system, has pioneered the concept of fee-based pricing with travel-management companies under contract with H-P. He states that H-P, which spends more than $528 million per year on T&E, plans to have all air travel based on net-fare pricing. “At the present time, we have several net fares at various stages of agreement,” he says. “These fares are negotiated with the airlines at the corporate level, then trickle down to each of our seven geographical regions.”

Frank Kent, Western regional manager for United Airlines, concurs: “United Airlines participates in corporate volume discounting, such as bulk ticket purchases, but not with net pricing. I have yet to see one net-fare agreement that makes sense to us. We’re not opposed to it, but we just don’t understand it right now.”

Kent stresses, “Airlines should approach corporations with long-term strategic relationships rather than just discounts. We would like to see ourselves committed to a corporation rather than just involved.”

As business travel expenses nose upward, companies are realizing that better cost-management techniques can make a difference.

US. corporate travel expenses rocketed to more than $143 billion in 1994, according to American Express’ most recent survey on business travel management. Private-sector employers spend an estimated $2,484 per employee on travel and entertainment, a 17 percent increase over the past four years.

Corporate T&E costs, now the third-largest controllable expense behind sales and data-processing costs, are under new scrutiny. Corporations are realizing that even a savings of 1 percent or 2 percent can translate into millions of dollars added to their bottom line.

Savings of that order are sure to get management’s attention, which is a requirement for this type of project. Involvement begins with understanding and evaluating the components of T&E management in order to control and monitor it more effectively.

Hands-on management includes assigning responsibility for travel management, implementing a quality-measurement system for travel services used, and writing and distributing a formal travel policy. Only 64 percent of U.S. corporations have travel policies.

Even with senior management’s support, the road to savings is rocky-only one in three companies has successfully instituted an internal program that will help cut travel expenses, and the myriad aspects of travel are so overwhelming, most companies don’t know where to start. “The industry of travel is based on information,” says Steven R. Schoen, founder and CEO of The Global Group Inc. “Until such time as a passenger actually sets foot on the plane, they’ve [only] been purchasing information.”

If that’s the case, information technology seems a viable place to hammer out those elusive, but highly sought-after, savings. “Technological innovations in the business travel industry are allowing firms to realize the potential of automation to control and reduce indirect [travel] costs,” says Roger H. Ballou, president of the Travel Services Group USA of American Express. “In addition, many companies are embarking on quality programs that include sophisticated process improvement and reengineering efforts designed to substantially improve T&E management processes and reduce indirect costs.”

As companies look to technology to make potential savings a reality, they can get very creative about the methods they employ.

The Great Leveler

Centralized reservation systems were long the exclusive domain of travel agents and other industry professionals. But all that changed in November 1992 when a Department of Transportation ruling allowed the general public access to systems such as Apollo and SABRE. Travel-management software, such as TripPower and TravelNet, immediately sprang up, providing corporations insight into where their T&E dollars are being spent.

The software tracks spending trends by interfacing with the corporation’s database and providing access to centralized reservation systems that provide immediate reservation information to airlines, hotels and car rental agencies. These programs also allow users to generate computerized travel reports on cost savings with details on where discounts were obtained, hotel and car usage and patterns of travel between cities. Actual data gives corporations added leverage when negotiating discounts with travel suppliers.

“When you own the information, you don’t have to go back to square one every time you decide to change agencies,” says Mary Savovie Stephens, travel manager for biotech giant Chiron Corp.

Sybase Inc., a client/server software leader with an annual T&E budget of more than $15 million, agrees. “Software gives us unprecedented visibility into how employees are spending their travel dollars and better leverage to negotiate with travel service suppliers,” says Robert Lerner, director of credit and corporate travel services for Sybase Inc. “We have better access to data, faster, in a real-time environment, which is expected to bring us big savings in T&E. Now we have control over our travel information and no longer have to depend exclusively on the agencies and airlines.”

The cost for this privilege depends on the volume of business. One-time purchases of travel-management software can run from under $100 to more than $125,000. Some software providers will accommodate smaller users by selling software piecemeal for $5 to $12 per booked trip, still a significant savings from the $50 industry norm per transaction.

No More Tickets

Paperless travel is catching on faster than the paperless office ever did as both service providers and consumers work together to reduce ticket prices for business travelers. Perhaps the most cutting-edge of the advances is “ticketless” travel, which almost all major airlines are testing.

In the meantime, travel providers and agencies are experimenting with new technologies to enable travelers to book travel services via the Internet, e-mail and unattended ticketing kiosks. Best Western International, Hyatt Hotels and several other major hotel chains market on the Internet. These services reduce the need for paper and offer better service and such peripheral benefits as increased efficiency, improved tracking of travel expenses and trends, and cost reduction.

Dennis Egolf, CFO of the Veterans Affairs Medical Center in Louisville, Ky., realized that the medical center’s decentralized location, a quarter-mile from the hospital, made efficiency difficult. “We were losing production time and things got lost,” he says. “Every memo had to be hand-carried for approval, and we required seven different copies of each travel order.” As a result, Egolf tried an off-the-shelf, paper-reduction software package designed for the federal government.

The software allows the hospital to manage travel on-line, from tracking per-diem allowances and calculating expenses to generating cash advance forms and authorizing reimbursement vouchers. The software also lets the hospital keep a running account of its travel expenses and its remaining travel budget.

“Today, for all practical purposes, the system is paperless,” says Egolf. The software has helped the hospital reduce document processing time by 93 percent. “The original goal focused on managing employee travel without paper,” he says. “We have achieved that goal, in part due to the efforts of the staff and in part due to the accuracy of the software.”

With only a $6,000 investment, the hospital saved $70 each employee trip and saved almost half of its $200,000 T&E budget through the paper-reduction program.

Out There

Consolidation of corporate travel arrangements by fewer agencies has been a growing trend since 1982. Nearly three out of four companies now make travel plans for their business locations through a single agency as opposed to 51 percent in 1988. Two major benefits of agency consolidation are the facilitation of accounting and T&E budgeting, as well as leverage in negotiating future travel discounts.

A major technological advance that allows this consolidation trend to flourish is the introduction of satellite ticket printers (STPs). Using STPs enables a travel agency to consolidate all operations to one home office, and still send all necessary tickets to various locations instantly via various wire services. As the term implies, the machinery prints out airline tickets on-site immediately, eliminating delivery charges.

For London Fog, STPs are a blessing. London Fog’s annual T&E budget of more than $15 million is split equally between its two locations in Eldersburg, Md., and New York City. Each location purchases the same number of tickets, so equal access to ticketing from their agency is a must. With an STP in their two locations, the company services both offices with one agency in Baltimore. Each office has access to immediate tickets and still manages to save by not having to pay courier and express mail charges that can range up to $15 for each of the more than 500 tickets each purchases annually.

Conde Nast Publications’ annual T&E budget of more than $20 million is allocated among its locations in Los Angeles, San Francisco, Chicago, New York and Detroit. Since 1994, travel arrangements have been handled by a centralized agency, Advanced Travel Management in New York City, by installing an STP in each of these five locations. In addition to increased efficiency due to consolidation, Conde Nast now has the ability to change travel plans at a moment’s notice and have new tickets in hand instantly.

The real benefit is that the machines are owned and maintained by the travel agency., so there is no cost to the company. Due to the major expense involved, however, STPs remain an option only for major ticket purchasers. “STPs are a viable option in this process for any location that purchases more than $500,000 per year in tickets,” says Shoen.

As airfare averages 43 percent of any company’s T&E expenses, savings obtainable through the various uses of technology have become dramatic. For example, the ability of corporations to collect and analyze their own travel trends has led to the creation of net-fare purchasing-negotiating a price between a corporation and an airline to purchase tickets that does not include the added expenses of commissions, overrides, transaction fees, agency transaction fees and other discounts.

Although most major U.S. carriers publicly proclaim that they don’t negotiate corporate discounts below published market fares, the American Express survey on business travel management found that 38 percent of U.S. companies had access to, or already had implemented, negotiated airline discounts. The availability and mechanics of these arrangements vary widely by carrier.

What’s the Price?

Fred Swaffer, transportation manager for Hewlett-Packard and a strong advocate of the net-pricing system, has pioneered the concept of fee-based pricing with travel-management companies under contract with H-P. He states that H-P, which spends more than $528 million per year on T&E, plans to have all air travel based on net-fare pricing. “At the present time, we have several net fares at various stages of agreement,” he says. “These fares are negotiated with the airlines at the corporate level, then trickle down to each of our seven geographical regions.”

Frank Kent, Western regional manager for United Airlines, concurs: “United Airlines participates in corporate volume discounting, such as bulk ticket purchases, but not with net pricing. I have yet to see one net-fare agreement that makes sense to us. We’re not opposed to it, but we just don’t understand it right now.”