Exclusive procurement deals may not be the cheapest option—companies should select the cheapest fare or rate of the day across a spread of suppliers.
Business travel costs for airfares, accommodation and car rental will continue to rise this year causing more budget busting headaches for corporate accountants around the globe.
Independent travel management company, FCm Travel Solutions, believe one of the most effective and easiest ways for corporations to maintain compliance and improve their bottom line is to take advantage of Best Fare of the Day (BFOD) and Best Rate of the Day (BROD) strategies.
So, rather than having an exclusive procurement deal with one airline or one hotel group, companies should select the cheapest fare or rate of the day across a spread of suppliers.
FCm Travel Solutions has proved that companies that use BFOD and BROD are chipping thousands of dollars off their annual travel spend.
Kathy Larkan, Victorian team leader for FCm Travel Solutions’ account management says companies are realising savings between 20 to 30 percent on annual airfare expenditure, with one business in FCm’s client portfolio highlighted for saving almost one million dollars in a year.
Companies that have already adopted an ‘open sky’ policy are reaping substantial financial and travel benefits of having a flexible travel policy in place, says Larkan.
“By using BFOD or BROD strategies, businesses are going to see savings because their travel spend is cheaper, they’ll achieve full compliance with their policies and they’ll also retain more buying power with their suppliers,” says Larkan.
“BFOD ensures customers are getting air travel that not only suits their business needs but secures the cheapest possible fare available in an open sky environment—rather than with one select carrier.”
Craig Bryant, national corporate commercial manager for FCm Travel Solutions, echoes Larkan’s comments and says it is a misconception that companies can only save money if they are locked into a procurement deal with a major carrier.
“It sounds okay in theory but a huge component of your travel spend can be saved with BFOD as you’re booking in advance and you get a broader selection of travel times, prices and options that are being offered by multiple air carriers at any one time,” says Bryant.
The story is much the same for the strategies applied to BROD for land components within travel policies, including car rental and accommodation.
BROD according to industry executives is starting to forge a presence in the market with an increasing number of businesses already tapping in to the benefits.
By using FCm Travel Solutions to secure the BROD, corporate travellers can make the most of their TMC’s bulk buying power, extensive world-wide network and travel alliances with a raft of reputable hotels and car rental companies.
“In using BROD, we’ll never ask people to stay at a lesser property than what they are used to. What we’re saying to procurement is that there are other alternatives out there and everybody’s hungry for the piece of pie, so let’s tease that out a bit and get the best out of what the market is offering,” says Larkan.
To achieve optimal results through BROD and BFOD, changing corporate culture is a critical factor in achieving cost reductions.
Now more than ever companies are being encouraged to open themselves up to change when it comes to devising new travel policies.
This change, according to the experts, needs to start from the top down.
“We’re seeing savings between AUD$80,000 and AUD$100,000 on travel policy land components. This is what companies can do if they change their way of thinking and do things a little differently, but we need to have a commitment from the CEO down to procurement down to the travel booker, that they want us to assist all the way with compliance.”