Can we still make savings on the T&E?

Nowadays all businesses are aware of the potential cost savings from adopting an “end-to-end” solution dedicated to travel and expense, to help streamline their processes and manage travel related purchases.

Implementation and adoption of end-to-end solutions vary hugely between different organisations. This highlights the enormous potential to still convert some organisations and we encourage these businesses to realise the benefits of such a solution to drive their business forward.

For those organisations who have fully implemented process automatization and optimization of their travel policies, to manage negotiations with suppliers: How do you effectively manage supplier partnerships without offsetting the comfort or safety of the traveller?

How do you optimize the use of Frequent Flyer Programs (FFP) or other loyalty programs used by the business traveller, that is to say the miles and points acquired by the traveller on the expenditures paid by the company.

It is a subject which has already caused much discussion and which remains unclear for many countries with the exception of Germany, Austria, Switzerland or the Scandinavian countries that have clarified the relationship between the personal benefits of the traveller and the company.

In Germany, for example, the use of miles to the personal title (Reisenmeilen) is regulated and added to the contract of employment as a benefit in kind. The amount of the advantage is clearly stated and capped at approximately 1000 € per year. Beyond this sum, miles are reused on the occasion of the professional travel and therefore as a benefit to the business.

For the less mature countries, few companies have studied the benefits of miles and other loyalty point schemes and how these can be beneficial to the organization. The potential gains are considerable for businesses. According to the experts based on Frequent Flyer Programs (miles), the savings on your air budget would be of 10% on short trips, 15 to 35% on the long haul, using current agreements already in place. To implement these changes would mean a change in policy and buy-in from travellers to use their miles for business travel rather than personnel leisure travel. Interestingly, in 2005, the volume of miles at the global level exceeded the monetary mass of USD in circulation and that they constitute today the first “parallel currency” in circulation*. The Airlines, in the face of these volumes, must rethink their model, some have already “devalued” their program of miles or altered the terms and conditions around the earning of miles and their redemption.

In this changing context, we encourage our clients to explore this savings potential.

There are a number of different approaches and ways to manage loyalty schemes and FPP programs which we can expand on, if this is of further interest.

*source European Central Bank, Virtual Currency Schemes (Oct 2012)

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Using miles for your company? Maybe easier than you think!