The intermediaries
PETER BROWNE, head of marketing, CTI Corporate Travel International
CLIENTS OFTEN STRUGGLE TO IDENTIFY HIDDEN COSTS;but by combining data from a number of sources, such as credit card statements, expense claims and depart- mental budgets, a picture starts to evolve. Usually ground transportation makes up
the largest portion of unaccounted spend, followed by subsistence and mobile costs. When tackling non-air transportation
costs, look to consolidate taxi spend with one company. If this is not possible, then pre-booking taxis can help control spend. With car hire, one quick and easy saving
can be achieved by making sure all travel- lers know which types of insurance they must have. Make use of free airline limos and don’t worry about the maximum pick-up distance – often, any excess fee can still be less than the alternative. For managing subsistence costs, look
at the travel policy. Does it have a recom- mended amount for the top destinations? For UK F&B [food and beverage] spend, can it be consolidated to a chain of restau- rants and a discount negotiated? One CTI client issued all travellers with a discount dining card that offers up to 50 per cent off meals at thousands of restaurants, including those in hotels.
Mobile phone and data costs can be
overlooked, as they are often allocated to the IT budget. Europe’s plans to abolish roaming costs should help, but using data can still be prohibitively expensive. Look at combining a global SIM card with a mobile wifi device to create a data hotspot.
JON WEST, managing director, HRS
The tax specialist
DOUG ANTHONY, director, Taxeo
VAT IS ONE OF THOSE HIDDEN-FROM-VIEW COSTS – so much so that, when quoted a price, we ask: “Does that include VAT?” What we should be asking is: “How can I get that VAT back?” In Europe, Ð5.5 billion is unclaimed every year. A lot of it is generated by spend on hotels, car rental and MICE [meetings, incentives, conventions and exhibitions] activity by inbound travellers. Their companies are eligible to claim it back. Most travel managers are disconnected from VAT recovery activity, so are unaware of the role they can play to address this hidden opportunity. With VAT rates as high as 27 per cent in some countries, depending on travel patterns, the average could be 12 per cent. It would seem ridiculous to ask travel managers to find 12 per cent savings on these expenses without a material impact on the services, but that is exactly what is available. Traditionally, 40 per cent of T&E invoices are ineligible for VAT recovery, leading to costly and inefficient manual processing. However, collecting data directly from the supplier to produce 100 per cent tax-compliant e-invoices optimises VAT recovery while minimising cost.
BUYINGBUSINESSTRAVEL.COM
HOTELS OFFER A HIGHER CATEGORY ROOM for a lower price to business travellers who typically return to the same hotel ten times in a year, rather than to leisure travellers who may return once or twice over a decade. Yet bookers often wrongly believe they will find the lowest rate on the internet – resulting in lost produc- tivity. According to Google, it takes two hours nine minutes to search for and book a hotel online, compared to eight minutes using a booking tool. Apply this to the £3.3 billion in unleveraged hotel spend in the UK during 2012, according to the Guild of Travel Management Companies, and that’s a huge amount of time wasted – roughly £592 million of lost productivity. Add to this roughly 10 per cent of hotel savings lost, or £330 million, by booking out of policy, and it’s little wonder compliance to policy is a key objective for travel managers. Choose websites with no transaction
fees to access the best corporate prices, and watch out for US-based sites which may only show net prices without the VAT. One-in-six hotel rooms are either can- celled or changed the day before arrival. By prepaying, you may think you‘re making a 10 per cent saving versus the pay on departure rate, but the true cost could be higher if your traveller cancels last minute, meaning you have to pay for the stay. Cancellation policies ensure you’re covered if plans suddenly change. Booking hotels near to public transport hubs is another great way of keeping costs down.
BBT NOVEMBER/DECEMBER 2014 39
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