In 2013, there were 4.9 million businesses in the UK, over 99 per cent of which were SMEs.
The European Commission’s SME Performance Review estimates the gross value added by SMEs as €473 billion, or 49.8 per cent of the UK economy.
SMEs employed 14,424,000 people in the UK in 2013.
team to discuss its objectives. “From these sessions we are looking to establish the amount of flexibility that is allowed in the policy. Does a traveller have a choice of supplier? Do they have to take the lowest fare regardless of routing? Are ticket up- grades acceptable? Then you build a couple of policy templates and propose them to the client. So, this would be the result if we adopted policy A, or this would be the impact if you implemented policy B.”
NEGOTIATED RATES AND FARES One of the biggest perceived challenges for SMEs is how they obtain access to negotiated rates and fares. Very few have the volume of travel that would get them a meeting with a supplier to discuss a corporate discount. Many, therefore, have to rely on the net airfares and hotel rates contracted by the TMC or hotel booking agency (HBA). As part of a large travel company, Corporate Traveller bulk-buys as much product as possible to pass on to its SME customers. But Graeme Milne, the company’s general manager, says getting discounts is only part of the cost-saving puzzle. He uses hotels as an example. “You have to look at the hotels’ deals to which you have access, and ask: do you use them?” he says. “Are you using ten hotels in one city when you could consolidate to five and therefore generate better savings?” Milne says his team is currently working with the hotels most used by clients in order to build essential add-ons into the price of a room. “We agree three add-on elements to be included in the room rate. This could be wifi, laundry, chauffeur cars, upgrades or breakfast. It means the SME has access to
42 BBT JULY/AUGUST 2014
Duty-of-care is also as applicable to SMEs as it is to FTSE 100 companies
these rates through our Smart Stay system, giving them more value and better control of spend.” Corporate Traveller is also one of many TMCs that obtains cluster fares, which are preferred supplier deals based on the collective volumes of different clients travelling on the same route. “Having a preferred supplier in place within a busi- ness, it’s not just about the savings, it’s about the familiarity with a product, and the consistency it brings.” Milne says this is often harder to achieve with airlines, though frequent flyer schemes are often beneficial to SMEs if used in the right way.
IMPLEMENTATION, INTEGRATION And what of expense management? Are SMEs too small to work with specialist companies? Not according to Caroline Haywood, interim managing director of Airplus International UK. She says the hardest part of setting up a managed travel programme is getting all aspects correctly implemented and integrated. “Like large organisations, SMEs will also be looking for good data,” she says. “And this can only happen if the expense management systems, TMCs’ data feeds and financial
systems all talk to each other. They will need expense management partners who can offer real guidance and advice as to the steps they need to take, and each supplier must be sure to collaborate.” Duty-of-care is also as applicable to SMEs as it is to FTSE 100 companies. While they may not have the budget to create dedicated departments, there are some practical steps that can be taken to mitigate traveller risk. Tim Edwards, health business development manager at Axa Assistance, urges SMEs to check they have an ad- equate business travel insurance policy in place. “The primary aim of these policies is to cover some emergency expenses – not to give you access to the practical advice and assistance you are likely to need in plan- ning a trip, or giving you on-the-ground help if something goes wrong. Always check your policy exclusions to be clear on the events and circumstances that are and, more importantly, those that are not, covered before you travel.” Analysts are predicting the economy should, eventually, return to levels of growth enjoyed in the mid 2000s after a period of flat-lining. What’s clear is that there are still potentially billions of pounds being spent on planes, trains and auto- mobiles by companies who have never considered the advantages of a formally managed travel programme. TMCs not only have the chance to grow their own businesses by taking a share of this market, but altruistically there is an opportunity to underpin the future success of UK Plc and cement the reputation of travel intermediaries as indispensable business assets.
BUYINGBUSINESSTRAVEL.COM
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