Base Tendriling Travel Expenses , travel tips

1. Base TendrilingTravel Expenses
As businesstravel expensesnose upward,companies are realizingthat bettercost-management
techniquescan make a difference
US. corporate travel expensesrocketedtomore than $143 billionin1994, according to American
Express' most recentsurvey on businesstravel management.Private-sectoremployersspendan
estimated$2,484 per employee ontravel and entertainment,a17 percentincrease over the past four
years.
Corporate T&E costs, now the third-largestcontrollable expense behindsalesanddata-processing
costs, are under newscrutiny. Corporations are realizingthat evena savingsof 1 percentor 2 percent
can translate into millionsofdollars added to theirbottom line.
Savings of that order are sure to get management'sattention,whichis a requirementforthis type of
project. Involvementbeginswithunderstandingand evaluatingthe components ofT&E management
in order to control and monitor it more effectively.
Hands-on managementincludesassigningresponsibilityfortravel management,implementinga
quality-measurementsystemfortravel servicesused,and writingand distributinga formal travel
policy.Only 64 percentof U.S. corporations have travel policies.
Even withsenior management'ssupport,the road to savings is rocky-onlyone inthree companieshas
successfullyinstitutedaninternal program that will helpcut travel expenses,andthe myriad aspects
of travel are so overwhelming,mostcompaniesdon'tknow where to start. "The industryof travel is
based on information," saysStevenR. Schoen,founderand CEO of The Global Group Inc. "Until such
time as a passengeractually sets foot on the plane,they've [only]beenpurchasing information."
If that's the case, informationtechnologyseemsa viable place to hammer out those elusive,but
highlysought-after,savings."Technological innovationsin the businesstravel industry are allowing
firms to realize the potential of automation to control and reduce indirect[travel]costs," says Roger

2. H. Ballou, presidentofthe Travel ServicesGroupUSA of AmericanExpress. "Inaddition, many
companiesare embarking on qualityprograms that include sophisticatedprocessimprovementand
reengineeringeffortsdesignedtosubstantiallyimprove T&E managementprocessesand reduce
indirectcosts."
As companieslook to technologyto make potential savings a reality,theycan get very creative about
the methodsthey employ.
The GreatLeveler
Centralizedreservationsystemswere longthe exclusive domainoftravel agents and other industry
professionals.But all that changed inNovember1992 whena Department of Transportation ruling
allowedthe general publicaccess to systemssuch as Apolloand SABRE. Travel-managementsoftware,
such as TripPower and TravelNet,immediatelysprangup, providingcorporations insightinto where
theirT&E dollarsare beingspent.
The software tracks spendingtrends by interfacingwiththe corporation's database and providing
access to centralizedreservationsystemsthat provide immediate reservationinformationto airlines,
hotelsand car rental agencies.These programs also allow usersto generate computerizedtravel
reports on cost savings with detailson where discountswere obtained,hotel and car usage and
patterns of travel betweencities.Actual data givescorporations addedleverage whennegotiating
discountswith travel suppliers.
"Whenyouown the information,you don'thave to go back to square one everytime you decide to
change agencies," saysMary Savovie Stephens,travel manager for biotechgiant Chiron Corp.
Sybase Inc., a client/serversoftware leaderwith an annual T&E budget of more than $15 million,
agrees."Software gives us unprecedentedvisibilityintohowemployeesare spendingtheirtravel
dollars and betterleverage to negotiate with travel service suppliers," saysRobert Lerner, directorof
credit and corporate travel servicesfor Sybase Inc. "We have betteraccess to data, faster,in a real-
time environment,whichis expectedto bringus big savings in T&E. Nowwe have control over our
travel informationand no longer have to dependexclusivelyonthe agenciesand airlines."

3. The cost for this privilege dependsonthe volume of business.One-time purchasesoftravel-
managementsoftware can run from under$100 to more than $125,000. Some software providerswill
accommodate smallerusers by sellingsoftware piecemeal for$5 to $12 per bookedtrip, still a
significantsavingsfrom the $50 industrynorm pertransaction.
No More Tickets
Paperlesstravel is catching on faster than the paperlessoffice everdidas both service providersand
consumerswork togetherto reduce ticket pricesfor businesstravelers.Perhapsthe most cutting-edge
of the advancesis "ticketless" travel,whichalmost all major airlinesare testing.
In the meantime,travel providersand agenciesare experimentingwithnewtechnologiestoenable
travelersto book travel servicesvia the Internet,e-mail and unattendedticketingkiosks.Best
WesternInternational,Hyatt Hotels and several other major hotel chains market on the Internet.
These servicesreduce the needfor paperand offerbetterservice and such peripheral benefitsas
increasedefficiency,improvedtrackingof travel expensesandtrends,and cost reduction.
DennisEgolf, CFOof the VeteransAffairsMedical Centerin Louisville,Ky.,realizedthat the medical
center'sdecentralizedlocation,a quarter-mile fromthe hospital, made efficiencydifficult."We were
losingproduction time and things got lost," he says. "Everymemo had to be hand-carriedfor
approval, and we requiredsevendifferentcopiesofeachtravel order." As a result,Egolf triedan off-
the-shelf,paper-reductionsoftware package designedfor the federal government.
The software allows the hospital to manage travel on-line,fromtracking per-diemallowancesand
calculating expensestogeneratingcash advance forms and authorizing reimbursementvouchers.The
software alsolets the hospital keepa running account of its travel expensesandits remainingtravel
budget.
"Today, for all practical purposes,the systemis paperless," saysEgolf.The software has helpedthe
hospital reduce documentprocessingtime by 93 percent."The original goal focusedon managing
employee travel withoutpaper," he says. "We have achievedthat goal,in part due to the effortsof
the staffand in part due to the accuracy of the software."

4. Withonly a $6,000 investment,the hospital saved$70 each employee tripand saved almost halfof its
$200,000 T&E budget through the paper-reductionprogram.
Out There
Consolidationofcorporate travel arrangements by feweragencieshas beena growing trend since
1982. Nearlythree out of four companiesnow make travel plans for their businesslocationsthrough a
single agencyas opposedto 51 percent in1988. Two major benefitsofagency consolidationare the
facilitationof accounting and T&E budgeting,as well as leverage in negotiatingfuture travel
discounts.
A major technological advance that allowsthis consolidationtrendto flourishisthe introductionof
satellite ticketprinters(STPs). UsingSTPs enablesa travel agency to consolidate all operations to one
home office,and still sendall necessarytickets to various locations instantlyvia various wire services.
As the term implies,the machineryprints out airline ticketson-site immediately,eliminatingdelivery
charges.
For London Fog, STPs are a blessing.LondonFog'sannual T&E budgetof more than $15 millionissplit
equallybetweenitstwo locations inEldersburg, Md.,and NewYork City. Each location purchases the
same numberof tickets,so equal access to ticketingfrom their agencyis a must. Withan STP intheir
two locations, the company servicesboth officeswithone agency in Baltimore.Each office has access
to immediate ticketsand still managesto save by not having to pay courier and expressmail charges
that can range up to $15 for each of the more than 500 tickets each purchases annually.
Conde Nast Publications' annual T&E budgetof more than $20 millionisallocatedamong its locations
in Los Angeles,SanFrancisco, Chicago, NewYork and Detroit.Since 1994, travel arrangements have
beenhandledby a centralizedagency,AdvancedTravel Managementin New York City,by installing
an STP in each ofthese five locations. In additionto increasedefficiencydue to consolidation,Conde
Nast now has the abilityto change travel plans at a moment's notice and have new ticketsin hand
instantly.
travel tips: https://oke.io/QwCh
The real benefitisthat the machinesare owned and maintainedby the travel agency., so there is no
cost to the company. Due to the major expense involved,however,STPsremainan option only for
major ticket purchasers. "STPsare a viable option inthis process for any location that purchases more
than $500,000 peryear in tickets," says Shoen.

5. As airfare averages43 percentof any company's T&E expenses,savingsobtainable throughthe
various usesof technologyhave become dramatic. For example,the ability of corporations to collect
and analyze theirown travel trends has ledto the creation of net-fare purchasing-negotiatingaprice
betweena corporation and an airline to purchase ticketsthat doesnot include the addedexpensesof
commissions,overrides,transactionfees,agency transaction feesand other discounts.
Althoughmost major U.S.carriers publiclyproclaimthat they don'tnegotiate corporate discounts
belowpublishedmarketfares, the American Expresssurvey on businesstravel management found
that 38 percentof U.S. companieshad access to, or already had implemented,negotiatedairline
discounts.The availabilityand mechanics of these arrangementsvary widelyby carrier.
What'sthe Price?
Fred Swaffer,transportation manager for Hewlett-Packardand a strong advocate ofthe net-pricing
system,has pioneeredthe concept offee-basedpricingwithtravel-managementcompaniesunder
contract with H-P. He statesthat H-P, whichspendsmore than $528 millionperyear on T&E, plans to
have all air travel basedon net-fare pricing."At the presenttime,we have several net fares at various
stages of agreement," he says."These faresare negotiatedwiththe airlinesat the corporate level,
then trickle down to each of our sevengeographical regions."
Frank Kent, Westernregional manager for UnitedAirlines,concurs:"UnitedAirlinesparticipatesin
corporate volume discounting,such as bulk ticket purchases,but not withnet pricing. I have yetto see
one net-fare agreementthat makessense to us. We're notopposedto it,but we just don't
understandit right now."
Kent stresses,"Airlinesshouldapproachcorporations with long-termstrategic relationshipsrather
than just discounts. We wouldlike to see ourselvescommittedto a corporation rather than just
involved."
As businesstravel expensesnose upward,companies are realizingthat bettercost-management
techniquescan make a difference.

6. US. corporate travel expensesrocketedtomore than $143 billionin1994, according to American
Express' most recentsurvey on businesstravel management.Private-sectoremployersspendan
estimated$2,484 per employee ontravel and entertainment,a17 percentincrease over the past four
years.
Corporate T&E costs, now the third-largestcontrollable expense behindsalesanddata-processing
costs, are under newscrutiny. Corporations are realizingthat evena savingsof 1 percentor 2 percent
can translate into millionsofdollars added to theirbottom line.
Savings of that order are sure to get management'sattention,whichis a requirementforthis type of
project. Involvementbeginswithunderstandingand evaluatingthe components ofT&E management
in order to control and monitor it more effectively.
Hands-on managementincludesassigningresponsibilityfortravel management,implementinga
quality-measurementsystemfortravel servicesused,and writingand distributinga formal travel
policy.Only 64 percentof U.S. corporations have travel policies.
Even withsenior management'ssupport,the road to savings is rocky-onlyone inthree companieshas
successfullyinstituted aninternal program that will helpcut travel expenses,andthe myriad aspects
of travel are so overwhelming,mostcompaniesdon'tknow where to start. "The industryof travel is
based on information," saysStevenR. Schoen,founderand CEO of The Global Group Inc. "Until such
time as a passengeractually sets foot on the plane,they've [only]beenpurchasing information."
If that's the case, informationtechnologyseemsa viable place to hammer out those elusive,but
highlysought-after,savings."Technological innovationsin the businesstravel industry are allowing
firms to realize the potential of automation to control and reduce indirect[travel]costs," says Roger
H. Ballou, presidentofthe Travel ServicesGroupUSA of AmericanExpress. "Inaddition, many
companiesare embarking on qualityprograms that include sophisticatedprocessimprovementand
reengineeringeffortsdesignedtosubstantiallyimprove T&E managementprocessesand reduce
indirectcosts."
As companieslook to technologyto make potential savings a reality,theycan get very creative about
the methodsthey employ.

7. The GreatLeveler
Centralizedreservationsystemswere longthe exclusive domainoftravel agents and other industry
professionals.But all that changed inNovember1992 whena Department of Transportation ruling
allowedthe general publicaccess to systemssuch as Apolloand SABRE. Travel-managementsoftware,
such as TripPower and TravelNet,immediatelysprangup, providingcorporations insightinto where
theirT&E dollarsare beingspent.
The software tracks spendingtrends by interfacingwiththe corporation's database and providing
access to centralizedreservationsystemsthat provide immediate reservationinformationto airlines,
hotelsand car rental agencies.These programs also allow usersto generate computerizedtravel
reports on cost savings with detailson where discountswere obtained,hotel and car usage and
patterns of travel betweencities.Actual data givescorporations addedleverage whennegotiating
discountswith travel suppliers.
"Whenyouown the information,you don'thave to go back to square one everytime you decide to
change agencies," saysMary Savovie Stephens,travel manager for biotechgiant Chiron Corp.
Sybase Inc., a client/serversoftware leaderwith an annual T&E budget of more than $15 million,
agrees."Software givesus unprecedentedvisibilityintohowemployeesare spendingtheirtravel
dollars and betterleverage to negotiate with travel service suppliers," saysRobert Lerner, directorof
credit and corporate travel servicesfor Sybase Inc. "We have betteraccess to data, faster,in a real-
time environment,whichis expectedto bringus big savings in T&E. Nowwe have control over our
travel informationand no longer have to dependexclusivelyonthe agenciesand airlines."
The cost for this privilege dependsonthe volume of business. One-time purchasesoftravel-
managementsoftware can run from under$100 to more than $125,000. Some software providerswill
accommodate smallerusers by sellingsoftware piecemeal for$5 to $12 per bookedtrip, still a
significantsavingsfrom the $50 industrynorm pertransaction.
No More Tickets

8. Paperlesstravel is catching on faster than the paperlessoffice everdidas both service providersand
consumerswork togetherto reduce ticket pricesfor businesstravelers.Perhapsthe most cutting-edge
of the advancesis "ticketless" travel,whichalmost all major airlinesare testing.
In the meantime,travel providersand agenciesare experimentingwithnewtechnologiestoenable
travelersto book travel servicesvia the Internet,e-mail and unattendedticketingkiosks.Best
WesternInternational,Hyatt Hotels and several other major hotel chains market on the Internet.
These servicesreduce the needfor paperand offerbetterservice and such peripheral benefitsas
increasedefficiency,improvedtracking of travel expensesandtrends,and cost reduction.
DennisEgolf, CFOof the VeteransAffairsMedical Centerin Louisville,Ky.,realizedthat the medical
center'sdecentralizedlocation,a quarter-mile fromthe hospital, made efficiencydifficult."We were
losingproduction time and things got lost," he says. "Everymemo had to be hand-carriedfor
approval, and we requiredsevendifferentcopiesofeachtravel order." As a result,Egolf triedan off-
the-shelf,paper-reductionsoftware package designedfor the federal government.
The software allows the hospital to manage travel on-line,fromtracking per-diemallowancesand
calculating expensestogeneratingcash advance forms and authorizing reimbursementvouchers.The
software alsolets the hospital keep a running account of its travel expensesandits remainingtravel
budget.
"Today, for all practical purposes,the systemis paperless," saysEgolf.The software has helpedthe
hospital reduce documentprocessingtime by 93 percent."The original goal focusedon managing
employee travel withoutpaper," he says. "We have achievedthat goal,in part due to the effortsof
the staffand in part due to the accuracy of the software."
Withonly a $6,000 investment,the hospital saved$70 each employee tripand saved almost halfof its
$200,000 T&E budget through the paper-reductionprogram.
Out There
Consolidationofcorporate travel arrangements by feweragencieshas beena growing trend since
1982. Nearlythree out of four companiesnow make travel plans for their businesslocationsthrough a

9. single agencyas opposedto 51 percent in1988. Two major benefitsofagency consolidationare the
facilitationof accounting and T&E budgeting,as well as leverage in negotiatingfuture travel
discounts.
A major technological advance that allowsthis consolidationtrendto flourishisthe introductionof
satellite ticketprinters(STPs). UsingSTPs enablesa travel agency to consolidate all operations to one
home office,and still sendall necessarytickets to various locations instantlyvia various wire services.
As the term implies,the machineryprints out airline ticketson-site immediately,eliminatingdelivery
charges.
For London Fog, STPs are a blessing.LondonFog'sannual T&E budgetof more than $15 millionissplit
equallybetweenitstwo locations inEldersburg, Md.,and NewYork City. Each location purchases the
same numberof tickets,so equal access to ticketingfrom their agencyis a must. Withan STP intheir
two locations, the company servicesboth officeswithone agency in Baltimore.Each office has access
to immediate ticketsand still managesto save by not having to pay courier and expressmail charges
that can range up to $15 for each of the more than 500 tickets each purchases annually.
Conde Nast Publications' annual T&E budgetof more than $20 millionisallocatedamong its locations
in Los Angeles,SanFrancisco, Chicago, NewYork and Detroit.Since 1994, travel arrangements have
beenhandledby a centralizedagency,AdvancedTravel Managementin New York City,by installing
an STP in each ofthese five locations. In additionto increasedefficiencydue to consolidation,Conde
Nast now has the abilityto change travel plans at a moment'snotice and have new ticketsin hand
instantly.
The real benefitisthat the machinesare owned and maintainedby the travel agency., so there is no
cost to the company. Due to the major expense involved,however,STPsremainan option only for
major ticket purchasers. "STPsare a viable option inthis process for any location that purchases more
than $500,000 peryear in tickets," says Shoen.
As airfare averages43 percentof any company's T&E expenses,savingsobtainable throughthe
various usesof technologyhave become dramatic. For example,the ability of corporations to collect
and analyze theirown travel trends has ledto the creation of net-fare purchasing-negotiatingaprice
betweena corporation and an airline to purchase ticketsthat doesnot include the addedexpensesof
commissions,overrides,transactionfees,agency transaction feesand other discounts.

10. Althoughmost major U.S.carriers publiclyproclaimthat they don'tnegotiate corporate discounts
belowpublishedmarketfares, the American Expresssurvey on businesstravel management found
that 38 percentof U.S. companieshad access to, or already had implemented,negotiatedairline
discounts.The availabilityand mechanics of these arrangementsvary widelyby carrier.
What'sthe Price?
Fred Swaffer,transportation manager for Hewlett-Packardand a strong advocate ofthe net-pricing
system,has pioneeredthe concept offee-basedpricingwithtravel-managementcompaniesunder
contract with H-P. He statesthat H-P, whichspendsmore than $528 millionperyear on T&E, plans to
have all air travel basedon net-fare pricing."At the presenttime,we have several net fares at various
stages of agreement," he says."These faresare negotiatedwiththe airlinesat the corporate level,
then trickle down to each of our sevengeographical regions."
Frank Kent, Westernregional manager for UnitedAirlines,concurs:"UnitedAirlinesparticipatesin
corporate volume discounting,such as bulk ticket purchases,but not withnet pricing. I have yetto see
one net-fare agreementthat makessense to us. We're notopposedto it,but we just don't
understandit right now."
Kent stresses,"Airlinesshouldapproachcorporations with long-termstrategic relationshipsrather
than just discounts. We wouldlike to see ourselvescommittedto a corporation rather than just
involved."
Conde Nast Publications' annual T&E budgetof more than $20 millionisallocatedamong its locations
in Los Angeles,SanFrancisco, Chicago, NewYork and Detroit.Since 1994, travel arrangements have
beenhandledby a centralizedagency,AdvancedTravel Managementin New York City,by installing
an STP in each ofthese five locations. In additionto increasedefficiencydue to consolidation,Conde
Nast now has the abilityto change travel plans at a moment'snotice and have new ticketsin hand
instantly.
https://oke.io/QwCh