Implementing an annual audit of your travel expenditure
Reviewing your air travel expenditure every year to quantify the amount of air travel expenditure and identify travel trends is essential for every organisation. This analysis is a valuable travel management tool to help travel buyers manage purchasing policies and supplier negotiations, define travel policy rules and adjust employee rights.
However, it is not an easy exercise! Here are some useful tips and guidelines to help you accurately collate and compare your data in a useable format.
- Define your objectives
Before you start, you need to define the basis of your audit and your objectives, to ensure you select the right data and use the right reporting measures:
- Use a specific database
The use of a travel agency reporting tool is recommended, as it provides a complete overview of bookings, with the orders that have been formalised via Traveldoo appearing alongside those that have been made outside of the tool directly with the travel consultant.
- Isolate reserved and invoiced tickets
The total air travel expenditure incorporates all the operations invoiced by the travel agency: orders, amendments and cancellations, and results from the initial ticket costs, the additional costs of amendments and any fees incurred by companies according to the types of tickets. The analysis should only cover the reservation data of the issued tickets. The amounts associated with the amendments and cancellations must therefore be excluded.
- Select cost lines
In order to consider the correct amounts, special attention must be paid to the type of reporting used. The one-way format has a complete line for each ticket, while the two-way format has as many lines as segments.
For example, in the first case, the cost of a Paris-London-Berlin-Paris ticket is on a single line, whereas, in the second case, it is on three lines. The analysis should only contain the amounts relating to the initial orders. The cost lines and fees mentioned on additional lines must be excluded.
- Carry out an analysis by country
Since the pricing is specific to each point of sale, it is advisable to carry out pricing analyses by point of sale (POS* *), which can be achieved by filtering by country of origin.
- Mastering the concept of ATP
In order to compare what is comparable, you will need to agree a calculation of Average Ticket Price (ATP).
There are numerous options here depending on what methodology best suits your organisations travel patterns. For example:
- Results by destination/Origin-Destination: Select the area you want to analyse. E.g. All segments, top 10 companies, top 5 by geographical area, top pax by airline…
- Results by travel class AND booking class: Separate the analyses by booking class for each travel class. E.g. compare the average business prices of classes J, C, D, I…
- Results by ticket types: Refine the average price comparisons by rate types (public vs negotiated) and by ticket: flexible, semi-flexible, non-flexible.
- Put cost increases into perspective
An increase in air travel expenditure is not always synonymous with a rate increase.
Check the detail! There could be numerous other explanations such travel policy changes, changes in business activity, traveller behaviours, and so on.
- The share of business class tickets is higher because the organisation authorised business class to begin at 5 am instead of 6 am
- The business activity now involves more international travel
- Employees are making more last-minute reservations
- A difference in negotiated rates over time
Performance with Traveldoo
A simple year-on-year comparison is far from sufficient, and many factors must be considered for relevant, usable analysis. The good news is that Traveldoo allows you to implement your results and to maintain your analysis over time, thanks to the multiple setting options available in the Administration module.
(*) ATP – Average Ticket Price
(**) POS – Point of Sale