FCM Travel GM Bonnie Smith says business travel still has many upsides – as long as you plan ahead.
After two years of pandemic restrictions, travel demand has roared back. However, business travel costs have risen sharply and finding creative ways to compensate is more critical than ever.
Cost-saving efforts are unavoidable, but given the current uncertain economic climate, evaluating business travel’s potential return on investment (ROI) is more important than ever. FCM Travel general manager Bonnie Smith says, “The reality is that businesses can't grow without face-to-face meetings made possible by travel. Productivity gains from business travel can take many forms, including new sales, customer retention, collaboration, employee satisfaction, networking, industry knowledge and idea-sharing.”
She notes that ticket yields are increasing more often than we have seen in the past couple of years. Clients could previously plan for and accommodate rises in ticket prices once a year. But due to the volatile oil price, increased demand for travel, countered by reduced airline availability and options, budgeting for business travel flights in 2022 and 2023 requires a different approach.
A travel partner to help you
FCM can help companies identify potential savings – as well as use their own buying power to secure volume rates or negotiate special rates on your behalf. FCM will flex its global buying power (and industry knowledge) to ensure that clients always receive the best possible fares or rates on the day, as well as specially-negotiated deals and travel perks (like lounge access, early check-in or late check-out). Experience, hard-won respect and long-standing relationships mean that the company can use its international network to deliver the best end-to-end business travel experience out there.
FCM Travel Solutions provides immediate visibility of an organisation’s comprehensive travel spend, as well as greater cost control through its flexible payment options, which include billbacks, travel lodge cards and interest-free credit accounts.
FCM will ensure that the technology it introduces enables the user to gain a clear, concise overview of travel spend related to accommodation, flights, car rentals and per diem expenses. By automating this reporting and consolidating all travel expense data in one place, travel managers can detect programme leakage and missed savings, as well as save time otherwise spent with manual reporting.
In the South African context, budget forecasting for domestic business travel is even more complex and challenging, considering that more than 60 percent of all air transactions are domestic flights. It is increasingly difficult to predict price changes on South African routes because so few airlines are operating, and those with a monopoly can set their own prices. The cost per transaction has increased by 17 to 25 percent when you include land costs.
For budget forecasting, FCM has typically advised customers to take the average ticket cost on certain routes, taking into account point of sales (POS), and then add a percentage increase. “In the current climate, that would be pure guesswork,” says Bonnie. “We are seeing such volatility in the market, with some fares doubling in five days, that even looking at Global Distribution Systems’ (GDS) current fares is not an indicator of how high they may be soon.”
In response to this challenge, customers should be realigning the budget for 2023 to at least a 30 percent increase on pre-pandemic prices and keep a close eye on creeping cost increases in the second half of 2022.
What to expect from your global travels
If you’re flying internationally at the moment, build in time, Bonnie says. “Fly the day before, if you can. Also fly earlier in the day than you need to – just build in time for queues or delays so you’re not rushing to meet a deadline or make a meeting.”
She also advises travellers to download the FCM travel app. “It will give you instant access to the latest travel information, including flight and gate changes, so that you’re up to speed with the latest situation. Get to the airport early – and ask FCM to organise lounge access if you can. This is not the time to be arriving for your flight with just minutes to spare.”
She says that if your company is working with a TMC like FCM, you have a safety net when things don't go as planned. Twenty-four-hour, real-time support is crucial for business travellers who are balancing work and travel.
Here are some of the ways in which FCM will provide support at every step of the traveller journey:
- Make sense of information overload. For example, FCM Travel Solutions has launched a dedicated travel news hub, a resource which will support travellers and companies with up-to-date information and relevant facts.
- Help in a crisis. When things go awry, FCM experts have the tools, supplier relationships and wherewithal to rebook, renegotiate and reorganise travel on your behalf.
- Professional advice. The FCM team have a wealth of experience. They know which airlines run on time, which connections are the quickest and most reliable, when transit visas are required and which tickets, (e.g., flexible fares) to book.
- Return on investment. FCM can pass on savings by tapping into deals and global buying power that are unavailable to individual companies. Data collected and analysed by FCM can also identify expense trends and missed savings.
- Duty of care. FCM ensures duty of care, and will bring you and your team home safely.
Flight delays and cancellations
The busiest airports in Europe have been cutting back on the number of flights they can handle for the months ahead, which is heavily affecting flight availability. The number of flights cancelled in Europe every week is running into the thousands. Be prepared to be flexible. If you’re working with FCM, the team will arrange alternative arrangements should your flight be cancelled a.
What can you do to minimise disruptions?
- Book as far in advance as possible. Not only will that help secure availability, but it will also help your company to manage travel costs.
- Whenever possible, travel with hand luggage only to avoid luggage mishaps.
- Embrace technology and download FCM Mobile to make sure you receive updates at every stage of your travel journey.
- Work closely with your dedicated FCM travel manager.
Tools to help CFOs measure travel impact on ESG
FCM has introduced new tools which can help you calculate your traveller’s carbon footprint, choose the greenest route, and even the most environmentally-conscious airline, i.e., those that are taking action to reduce their carbon emissions.
The good news is that there are simple steps which you can take right now to ensure that your team travels sustainably. This may include reducing the number of connections when flying, supporting carbon offset initiatives such as offsetting your traveller’s carbon footprint by investing in reforestation or renewable energy projects, choosing rideshare options, public transportation, or other low-emission methods in your destination, choosing eco-friendly accommodation, and committing to zero- or low-waste behaviour and recycling when travelling (and at home).
FCM can also help you ‘green’ your travel supplier base by suggesting environmentally-conscious hotel and transport partners. Once a company has set their sustainability goals and identified eco-friendly suppliers, these can be built into your travel policy.
Today’s online booking tools (OBTs) allow you to customise your searches and approval process to ensure your bookings fall in line with your travel policy, be it green-certified hotels, flying with low-emission providers or choosing airlines with carbon-reduction projects in place.Bonnie reminds travellers that, “Even though we might need to take a few more precautions and keep a few more things in mind, we can assure you that travelling is as rewarding – if not more – than ever before.”
