BCD Travel
2006 Annual Client Benchmark Survey
Annual Survey
Table of Contents
1
3
11
17
18
19
22
23
24
26
29
30
33
34
table of contents
Introduction
Insight on Air
Insight on Hotel
Insight on Car
Insight on Changing Drivers of Travel
Insight on Travel Management Budget and Policy
Insight on Crisis Management
Insight on Charge Card
Insight on Online Booking Adoption
Insight on Global Consolidation
Insight on Global Distribution Systems
Insight on Meetings Management
Insight on Leisure Travel
Appendix
client benchmark survey results
Copyright © 2006 BCD Travel
p. Streamlining and Simplifying
the Business of Travel
an integrated approach to travel management
In an increasingly dynamic and global marketplace, organizations continue to face a tough challenge: balancing
the need to travel in order to conduct business with the need to manage the costs of business travel. Face-to-face
meetings are essential to building strong relationships with clients and relationships within an organization.
Travel is required to win new business. Travel is required to retain and expand an existing client base. Travel is
required to facilitate and empower an organization to grow and change. Businesses need to travel for business
— it’s as simple as that.
It is encouraging to see the function of travel management moving under the
purchasing and procurement functions. According to this year’s BCD Travel 2006 Client Benchmark Survey results, this is a development that continues
to evolve. With the help of corporate travel managers who understand every
nuance of an effectively managed travel program, purchasing and procurement
professionals are focused on cost avoidance and savings. And as in previous
years, we’ve seen impressive 2006 initiatives aimed at optimizing individual
components of a travel program by applying some good practices which help
strengthen the bottom line.
At first glance this approach seems encouraging and shows the value that
effective travel management brings to an organization. However, sustainable
value-add within any travel program requires more than purely optimizing
individual program components. Similarly, in recent years we’ve seen how a
purely procurement-driven approach falls short, failing to address travelers’
expectations regarding travel safety, security and comfort while traveling.
The shortcomings of this approach threaten policy compliance and the ability
to steer volume. Best-in-class travel programs blend all elements together in
order to achieve key business objectives.
introduction
mary ellen george
General Manager
Global Consulting
client benchmark survey results
Copyright © 2006 BCD Travel
BCD Travel Consulting recommends a comprehensive, integrated approach
to travel management. Our approach streamlines the travel program and
prepares the corporation for whatever the future brings to corporate travel
and to travelers. Case in point — the new environmental or green initiatives,
which are a strong focus in Europe, are now emerging as a new challenge
for American corporations. Those responsible for travel management will
quickly need to consider how best to incorporate green policies into their
travel programs.
An integrated approach will link all travel-related issues to corporate
objectives, supported by an updated travel policy and governance process.
This clearly communicates when a trip is appropriate, how to choose from
the available options, and what to do to offset carbon emissions. Critical to
effective travel management in the future will be the ability to provide facts
for informed decision making based on an understanding of total trip costs.
The complexity of the changing travel landscape requires an integrated
approach, creativity and ingenuity to navigate through it all. Travel managers
who employ creativity to maximize technology for their companies will come
out ahead. As technology delivers the analytics and information for program
initiatives, the travel manager is free to add more value to the corporation
with up-to-the-minute, quantifiable, strategic business management. An
integrated approach to travel management now is the only way to prepare
for successful travel management in the future.
In closing, I hope you enjoy this sixth annual peer-to-peer Client Benchmark
Survey from BCD Travel. Over the years, this survey has provided readers with
valuable insight into the budgeting and policy-making process. This survey also
serves as a comprehensive resource for helping companies benchmark progress.
Sincerely,
introduction
mary ellen george
General Manager
Global Consulting
client benchmark survey results
Copyright © 2006 BCD Travel
Insight on Air
Airline CFOs continue to express concern about the impact of higher fuel costs — an increase of 25 percent
in fuel prices from March to June 2006. As reported in the June 2006 International Air Transport Authority’s
(IATA) survey, the demand for capacity will allow airlines to pass on a portion of higher fuel costs through
passenger fuel surcharges.
International routes continue to be more profitable than the highly
competitive domestic routes in the United States and Europe. However,
higher fuel costs and increasing airline capacity on international routes will
likely weaken net profits for carriers and lower the average ticket price on
these routes.
Twenty-nine percent of
survey respondents
report a formalized global
airline program.
Industry analysts predict airfares could rise as much as 18 percent in 2006.
International ticket prices continue to track higher than in previous years.
BCD Travel client data indicates that international airfares have risen steadily
and remain above the five-year level dating back to 2001. The year-over-year
increase in international airfare was 8 percent. 2001 – 2006 International Airfare Comparison
BCD Travel Client Data (US$)
2001
2002
2003
2004
2005
2006
$2,400
Average Ticket Price
$2,200
$2,000
$1,800
$1,600
$1,400
$1,200
insight on air
client benchmark survey results
Copyright © 2006 BCD Travel
V
EC
D
O
N
P
G
CT
O
SE
L
N
AU
JU
R
AY
JU
M
AR
B
AP
M
FE
JA
N
$1,000
2001
2002
2003
2004
2005
2006
$550
$450
$400
$350
$300
V
O
CT
P
G
EC
D
N
O
SE
L
N
AU
JU
R
AY
JU
M
AP
B
AR
M
FE
N
$250
JA
Average Ticket Price
$500
When asked if they felt the 2005 United States domestic airfare reform
had changed the U.S. domestic average ticket price, 36 percent of survey
respondents reported the reforms had increased their average domestic
ticket price. Meanwhile, 35 percent felt their average ticket price was not
impacted and 24 percent indicated their air program had actually benefited
with a decrease in average ticket price.
As seen in the year-over-year comparison, the 2005 average domestic ticket
price for BCD Travel client data indicates that the domestic average ticket
price continues to track 8 percent below 2001 levels. However, the 2006
average airfare has started an upward trend and is expected to continue to
rise as fuel costs impact profitability for major carriers and low-cost carriers
alike. With high passenger traffic and controlled capacity, sustained increases
in airfare indicate that for the first time in five years, the average domestic
airfare may reach or exceed 2001 prices.
cautious optimism: state of
the air transport industry
report june 2006
An excerpt from a speech given by Giovanni
Bisignani, Director General and CEO of the
International Air Transport Association (IATA), at
the opening of the World Air Transport Summit and
IATA Annual General Meeting in Paris, June 2006.
Bisignani opened his speech by noting the
tremendous progress the airlines have made
since crisis struck the industry in 2001:
“We are starting to see some light at the end of
a five-year tunnel — some cautious optimism.
Labor productivity improved 33 percent. Sales
and distribution costs dropped 10 percent and
non-fuel unit costs reduced 13 percent.
Oil remains the wild card. The break-even fuel
price increased from US$14 per barrel to US$50
[per barrel] since 2001. But in just one year, the
fuel bill ballooned US$21 billion and is expected
to top US$112 billion this year. While the fuel
price continues to race ahead of efficiency
gains, it is truly amazing that profitability has
not deteriorated from last year. Losses for 2006
will be US$3 billion, slightly less than the US$3.2
billion recorded for last year.
We must remember that the strong revenue
environment — 10 percent annual growth over the
last three years — is also fragile. A weaker global
economy could change our prospects dramatically.
Change is more important than ever.”
insight on air
2001 – 2006 Domestic Airfare Comparison
BCD Travel Client Data
client benchmark survey results
Copyright © 2006 BCD Travel
airline negotiation and policy
In its June 2006 forecast, IATA reported that the global airline industry
shows a slight improvement in financial performance for 2006 with a net
loss expected to be US$3 billion, down from US$6 billion in 2005. In the face
of high fuel costs, carriers worldwide are expected to implement additional
non-fuel unit cost reductions of 3.5 percent or higher, resulting in more than
US$11 billion in savings.
Corporate air program performance review has been targeted as a savings
item for further cost control by carriers. Survey respondents continue
to report cancellations of air contract discounts due to a lack of volume
performance or the inability to meet market share commitments.
Supplier Agreement Cancellation Reasons
Shift in business
14%
Not meeting
spend commitments
24%
Not meeting
market share
commitments
62%
Five percent of survey respondents indicate their organization has cancelled
an airline agreement due to an overlap in preferred carriers. A majority of
respondents feel that carrier pressure to reach market share goals is about
the same when compared to 2005.
insight on air
The current environment is forcing both buyer and seller to rethink strategies
for contract negotiation. Twenty-five percent of survey respondents indicate
that they have changed their company’s negotiation strategy for airline
suppliers over the past year. Twenty-two percent have engaged a third
party, such as BCD Travel Consulting, to analyze their airline suppliers and
recommend changes to their preferred-supplier program.
client benchmark survey results
Copyright © 2006 BCD Travel
Consultancy services were engaged by survey respondent companies to
assist with the following areas of the travel management program (listed in
order of response):
• Evaluation of current travel program
• Negotiation support
• Strategy development
• Proposal evaluation
• Performance tracking
• Ongoing contract management
Optimizing a company’s air management program maximizes savings,
increases efficiencies, and streamlines the complex procurement process.
Sixty-eight percent of survey respondents achieved their savings goals when
recommendations from their consulting were implemented.
Airfare cost and flight schedule top the list again in this year’s survey as the
most important drivers in traveler selection of domestic and international
carriers. These drivers are followed by preferred carrier, overall service, comfort
and frequent flyer mileage accrual/upgrade redemption. Eighty-eight percent
of survey respondents cite cost over preferred carrier as the most important
factor in their company’s air program, applying a threshold of US$100 or greater
for using a non-preferred carrier versus a preferred carrier.
Most Important Drivers of Airfare Program
Preferred Supplier
bcd travel consulting helps
you take control
Understand where you are today. Analyze
precisely what your current spend is with
supplier programs; understand the overall
travel patterns of your travelers, by identifying
key trends and behaviors.
Visualize where you want to be tomorrow.
Scrutinize and incorporate organizational,
economic and industry trends to identify
opportunities for improvement throughout
your program.
Create a strategy to get there. Design a
program strategy that enables you to achieve
optimal savings, coverage and service goals
through a variety of initiatives including
process analysis, travel policy adjustment,
preferred supplier negotiations and
contracting tactics.
Implement your strategy. Achieve your
program goals with an integrated strategy
that includes process engineering, system
integration and project management support.
Keep your program on track. Continually
measure, track and document ongoing
Cost
program spend and savings as well as contract
compliance, performance issues and new
12%
savings opportunities.
insight on air
88%
Improve internal compliance and obtain senior
management support. Our ongoing consulting,
analysis and supplier management provides
the support and information required to
successfully communicate your program’s value
and performance internally. Together, we’ll
address compliance issues and build credibility
with suppliers while ensuring suppliers are
accountable for their performance.
client benchmark survey results
Copyright © 2006 BCD Travel
Low-cost carriers and alternative online fares continue to be the two primary
factors impacting preferred-supplier compliance levels. However, most
respondents reported 71 percent to 80 percent compliance on preferred
supplier air programs.
Number of Preferred Air Carriers
45%
44
41
40%
% of Respondents
35%
2005
37
2006
32
31
30%
25%
20%
15
15%
10%
5%
0%
insight on air
1 to 2
client benchmark survey results
Copyright © 2006 BCD Travel
3 to 4
5+
Maintaining compliance while achieving lower transaction costs online
continues to be a challenge in company travel management programs.
Thirty percent of respondents state that their company’s travelers are required
to book the lowest cost over preferred supplier when using an online booking
tool. They are also required to incorporate cost thresholds into their policy
to qualify a non-preferred carrier ticket. A majority of companies require the
traveler to provide an explanation when choosing a higher airfare.
Travel Policy Preferred vs. Non-preferred Carrier Threshold
Always take the lowest-price ticket regardless of airline status
34%
Use non-preferred if savings is greater than US$100
32%
Use non-preferred if savings is US$51 to US$100
14%
Use non-preferred if savings is US$26 to US$50
6%
Use non-preferred if savings is US$25 or less
1%
Other
13%
Eighty-three percent do not allow travelers to book directly via airline Web
sites. Companies are mixed on their approach toward alternative online fares,
with 17 percent of respondents allowing travelers to book a ticket outside of
the corporate travel agency if they are able to obtain a lower cost.
Preferred Air Program Compliance
30%
30%
22%
20%
15%
15%
10%
14%
10%
9%
5%
0%
insight on air
81
%
to
>9
%
90
%
80
to
%
71
to
61
%
51
%
to
60
%
70
%
0%
<5
0%
% of Respondents
25%
Compliance Level
client benchmark survey results
Copyright © 2006 BCD Travel
Negotiating Strategies
Get Tougher
For the first time since 2001, domestic and regional airfares have started to increase on a year-over-year
basis and intercontinental airfares have continued an upward trend driven by higher fuel prices. Corporate
buyers are going to have to get more assertive over the next two years to realize any air program savings.
Expect to see airfares rise as much as 6 percent to 10 percent this year — a trend that will continue for the
remainder of 2006 and into 2007.
Airfare increases and airlines’ financial situations are also showing up in carrier
negotiations as they take a more aggressive approach to corporate contracts.
BCD Travel consultants are seeing carriers scale back some discounts and
cancel contracts they deem to be underperforming. Given this challenging
environment, corporate travel and procurement managers are asking us if it
is realistic to improve savings. Based on our recent experience, our answer is
“Yes,” but only if corporate buyers are willing to take a more proactive and
coordinated approach to managing their airline programs.
So, what’s the best way to measure savings in today’s environment? I strongly
recommend that contract savings be used as the base savings measurement,
but travel manages should be mindful that there is more to consider than
just base savings. Identify and take credit for the cost avoidance provided
by guaranteed/flat fares and by improved contract terms and conditions
such as ticketing flexibility. Also, it is important to benchmark these savings
improvements against industry fare trends, average ticket price and cost-permile data compared with other like companies and industry averages.
insight on air
bob brindley
Vice President
BCD Travel Consulting
client benchmark survey results
Copyright © 2006 BCD Travel
It is possible to continue to achieve savings, even in a tough negotiations
environment such as the one we will face in 2006 and 2007. It is critically
important to keep your strategy on track by regularly monitoring performance.
By using a coordinated approach you can still drive incremental savings
and quantify the value of your air program for your company in today’s
environment of rising prices.
BCD Travel Consulting recommends the following strategies to improve
program savings during difficult negotiations:
insight on air
• Review your contract performance and the share premiums you are
delivering to your preferred airlines — past performance impacts
credibility and future airline offers
• Re-evaluate the mix of carriers in your program to account
for changes in your travel requirements and carrier
schedule adjustments
• Analyze carrier minimum/maximum potential and use it at the
negotiation table, where appropriate
• Expand your program — pursue global opportunities to improve
discounts, contract terms, and market coverage
• Focus on high-priced/competitive intercontinental markets
• Negotiate guaranteed/flat fares where appropriate to protect
against price increases
• Push for marginal improvements where carrier support has been
strong in domestic and regional markets
• Negotiate ticketing and fare rule flexibility
• Use low-cost carriers where appropriate, but factor in total trip cost
impacts where alternate airports are required and the potential
impact on other preferred-carrier programs.
client benchmark survey results
Copyright © 2006 BCD Travel
10
Insight on Hotel
During the 2006 negotiating season, BCD Travel clients leaned heavily on analytics to help them evaluate
cost-saving options. While some organizations applied many different strategies to address the challenges
in year-one, several chose to tier down from full-service to limited-service hotels. However, there was not a
significant shift in this direction.
Instead, a number of companies focused on the total cost of stay as opposed
to the room rate. BCD Travel’s clients successfully negotiated discounts on
full-service amenities, such as health clubs, parking, high-speed Internet,
telephone services and meals. They also secured corporate-negotiated flat
rates that included discounted costs for these selected amenities. As a result,
customers achieved cost savings in spite of rate hikes.
Total Cost of Stay (Daily Hotel Rate Comparison)
US$96 rate
Excluded:
Internet access
Breakfast
Parking
Airport shuttle
US$110 rate
(US$10)
(US$10)
(US$7 – $10)
(US$10 – $12)
Total cost of stay: US$136
Included:
Internet access
Breakfast
Parking
Complimentary airport shuttle
Total cost of stay: US$110
BCD Travel also identified a new trend this year in which a few companies
are negotiating annual hotel contracts off season based on their individual
corporate fiscal procurement cycles rather than in the traditional fourth quarter.
As a result, we are negotiating an increasing number of contracts throughout
the year, which makes it easier for travel managers and hoteliers alike.
insight on hotel
In 2005, BCD Travel anticipated that hotels would use the 2006 season to test
the new dynamic pricing model in which the rate “floats” with the property’s
demand. As predicted, a small percentage of clients and hotels opted to try
this new model in some of their pricing areas and BCD Travel expects the use
of this model to gain momentum in 2007.
11
client benchmark survey results
Copyright © 2006 BCD Travel
seize every opportunity
Albert Einstein once said, “In the middle of difficulty lies opportunity.”
Maria Chevalier, vice president — BCD Travel Consulting believes this is a
good mantra for the hotel industry right now. “This is a difficult time for the
corporate buyer, but we see a lot of opportunity for the company ready to
focus on change,” says Chevalier.
2007 promises to be yet another year of hotel rate increases, aggressive
pricing and flat hotel supply. New rate models, like dynamic pricing are
beginning to increase in certain markets and properties. We anticipate that
complexity in negotiation will be added as buyers determine how to measure
and compare between properties with dynamic pricing versus traditional
fixed rates.
For the upcoming negotiation season, we are seeing out-of-the-box strategies
being directed at the current company hotel program. For example, a change
in the tier strategy has produced quick cost savings for one BCD Travel
Consulting client. When asked the question, “Are you getting real value from
your tier program?” the company realized that 60 percent of its travelers had
one-night stays at an upper-tier property. Due to the travel schedule, these
travelers were unable to take advantage of the amenities negotiated into the
rate such as fitness center, restaurant, business center, concierge lounge, etc.
By asking half of the travelers to change to a lower-tier property for one-night
stays, the company was able to save more than US$500,000 annually.
maria chevalier
Vice President
BCD Travel Consulting
How to balance the results of the 2006 negotiating season with 2007
negotiations (which is fast approaching — August 2006) will depend on how
aggressive corporate buyers are willing to get.
Chevalier suggests buyers review the current hotel program for
opportunities for aggressive procurement strategies:
insight on hotel
• Room Block/Bulk buy scenarios
• Tier strategy
• Market strategy
• Chain strategy
• Cost of stay
Agility and flexibility within the hotel program can yield substantial savings by
evaluating and implementing one or more aggressive procurement strategies.
client benchmark survey results
Copyright © 2006 BCD Travel
12
Worldwide, several factors continue to drive high average daily prices such
as increased business travel demand and limited new hotel supply, increasing
energy costs, labor challenges, natural disasters and increasing demand on
properties. 2006 corporate negotiated hotel rates increased an average of
6 percent. Some markets even experienced increases in the 20 percent to
30 percent range. BCD Travel estimates that the average daily rate will
increase again by 5 percent to 6 percent this year — the industry’s highest
dollar increase in 24 years. The 2007 hotel negotiating season is expected
to be even more difficult for buyers and this trend is forecasted to continue
well into 2008.
Corporate hotel spend
represents 70 percent of the
international average daily
per diem and 53 percent of the
domestic daily per diem.
Ninety-three percent of survey respondents report having a negotiated
company hotel program.
• 52 percent — manage fewer than 100 hotels
• 24 percent — manage 101 to 300 hotels
• 24 percent — manage more than 300 hotels
Twenty-four percent of survey respondents indicate a strong focus on the
hotel program with good traveler compliance, but their management seeks
increased savings. Twenty-one percent indicate that currently their company
has a moderate focus, but would like to increase its focus on the hotel
program and negotiations.
Sixty-five percent of survey respondents report that their company’s negotiated
hotel program savings impact increased by 1 percent to 10 percent, while
32 percent report that savings impact has remained flat compared with 2005.
Four percent report a decrease in the negotiated program savings impact.
Impact of Negotiated Hotel Program
2006 vs. 2005
decreased
more than 10%
1%
increased
1% to 4%
increased
5% to 10%
29%
29%
decreased
5% to 10%
insight on hotel
2%
13
decreased
1% to 4%
1%
flat
31%
increased
10% or more
7%
client benchmark survey results
Copyright © 2006 BCD Travel
Survey respondents cite that the top challenges continue to be traveler
compliance of the program and increased difficulty obtaining inventory at
preferred properties. The major challenges of creating and managing the
company’s negotiated hotel program remain consistent with 2005. This is
compounded by the high business travel demand and low supply of hotel
properties, particularly in major business destinations.
Preferred Hotel Program Compliance
20%
19%
20%
15%
16%
13%
14%
12%
10%
9%
8%
6%
6%
4%
2%
0%
>9
%
76
%
to
90
75
%
60
to
61
%
to
46
%
30
%
to
45
%
%
0%
<5
0%
Compliance Level
(16 percent indicate compliance level is unknown)
insight on hotel
% of Respondents
18%
client benchmark survey results
Copyright © 2006 BCD Travel
14
efolio: new tool, more control
As hotel demand climbs and supply dwindles, corporate travel managers
are calling for better data to use during supplier negotiations. eFolio, the
electronic version of the hotel folio, answers this call, providing detail on
spend that was largely absent before. Simply put, eFolio itemizes the room
rate versus the amount spent on taxes and amenities — such as mini-bar,
movies and Internet access — and any other extras on a particular bill.
Within the last year, major hotel chains, including Marriott, Hilton and
Choice Hotels have begun offering eFolio. And by the end of 2006, Hyatt,
Intercontinental and Starwood Hotels are expected to offer the technology
as well.
With the elements of hotel spend data broken out through eFolio, travel
managers’ ability to set goals and strategies for the successful containment
of costs is enhanced, as is their effectiveness when negotiating contracts.
eFolio is set to become an indispensable tool for the successful management
of travel programs. The benefits of eFolio are particularly timely given the
emphasis many companies have placed on managing hotel spend.
The Benefits are Clear
With eFolio, travel managers have access to detailed information about their
hotel spend, which provides them with leverage in their negotiations with
hotel suppliers. Greater data accuracy also enables companies to better
monitor compliance with their travel policy. In terms of adding overall value
to the organization, eFolio further automates the internal auditing process,
helping to minimize travel expense reporting fraud.
Another benefit is that travelers save valuable time by having their expense
reports pre-populated with the itemized information. Additionally, travelers
spend less time focusing on the logistics associated with travel and more
time focusing on the objectives of the business trip.
More Information Equals More Control
eFolio represents a turning point in business travel management. As the
discipline of the corporate procurement process is applied to all aspects
of travel purchasing, it has been accompanied by the need for greater
information and analysis of travel spend. eFolio data answers this demand,
providing the detail that procurement officers and travel managers desire.
insight on hotel
Soon travel managers will have complete transparency into where their dollars
are being spent in the hotel portion of their program. However, the widespread
adoption of eFolio data relies on demand from the market to include corporate
travel buyers, expense management companies and travel management
companies. As hotels continue to roll out eFolio, BCD Travel recommends that
companies prepare by working with their T&E providers to ensure their expense
reporting systems are capable of processing eFolio data.
15
client benchmark survey results
Copyright © 2006 BCD Travel
Fifty-five percent of respondents cite that their hotel program is encouraged
but not mandated, while only 9 percent reported a mandated hotel program.
When asked about the company’s hotel policy, 51 percent of the survey
respondents report that their policy requires hotel booking through the
preferred agency channel.
BCD Travel Negotiated Hotel Program
Negotiation Parameters
2006
2005
2004
2003
Negotiated entirely in the U.S.
30%
36%
37%
33%
Managed in-house without hotel
RFP software
16%
12%
17%
12%
Negotiated in U.S. with input
from other countries or regions
15%
14%
15%
9%
Managed in-house with hotel
RFP software
12%
10%
8%
10%
Other
11%
4%
6%
8%
All or part of hotel program
management is outsourced to
third party
7%
4%
12%
7%
RFP management is outsourced
to third party
6%
5%
12%
4%
Negotiated outside of the U.S.
4%
1%
4%
2%
innovative hotel
negotiations with targeted
buy program
Eric Boulter, Senior Group Manager & Category
Leader, Travel—PepsiCo Inc., was awarded the
2006 ACTE Advancing the Industry Award for his
innovative approach to hotel negotiations.
Eric Boulter launched a targeted-buy hotel
program within Pepsi’s preferred hotel
program. With hotel rates increasing and
expected to remain high through 2008,
Boulter targeted high traffic markets for
special negotiated programs. Compliance was
accomplished through the online booking tool
to promote the targeted hotel properties and a
traveler communication program.
Boulter, on behalf of Pepsi, was able to negotiate
a reduced room rate in exchange for increased
volume commitments to specific hotels. With
his highly unique approach to hotel negotiation,
Boulter has established a new model within
the industry which provides business travel
management and hotel procurement with
additional negotiating power.
(Total may exceed 100% due to multiple entries)
Other major hotel program challenges reported include:
• Difficulty in negotiating the right properties at the right
location at the right price
• Obtaining accurate data and receiving negotiated rates at
contracted properties. (BCD Travel Consulting expects the
future use of eFolio will significantly impact this challenge.)
• Achieving room night volume for negotiated contracts
• Program leakage by bookings made directly with hotel or
via hotel Web site, frequent-booker programs, and online
insight on hotel
travel company Web sites
• Tracking hidden costs and negotiating into program
client benchmark survey results
Copyright © 2006 BCD Travel
16
Insight on Car
The car rental industry has experienced increased operating costs over the past year as a result of high fuel prices
and rising local taxes. Increasing city and municipal taxes levied on car rentals have been reported as high as
26 percent (on average) at the 100 busiest United States airports. These taxes, slated for items such as sports
venues, convention facility improvements, roadway and airport improvements as well as other state and local
projects, continue to impact total car rental costs for business travelers. BCD Travel has seen a year-over-year car
rental rate increase in the range of 5 percent to 7 percent.
Number of Agreement
in Preferred Rental Car Program
2%
In order to minimize the impact of these uncontrollable costs, car rental
companies pass the increases directly to the customer. Additional fees, such
as no-show charges of US$50 are beginning to become a standard part of the
1%
car rental industry, much like the hotel industry’s stricter no-show policies of
four years ago. A trending of add-on charges in the rental car rate will force
buyers to increasingly review these charges for inclusion in the negotiated
daily rental rate, much like the loss damage waiver (LDW). Seventy-three
13%
35%
percent of the survey respondents have negotiated to include the LDW into
their daily rate.
Survey respondents ranked the most important reasons travelers select a
rental-car company (listed in order):
49%
• Rates
• Loyalty program
• Vendor reputation
1
This year’s survey showed a change in the ranking of the loyalty program.
Loyalty program moved up to the No. 2 spot for traveler selection of a rental
car company.
2
3
Forty-nine percent of survey participants indicate that their company’s travel
program includes negotiated agreements with two car rental companies.
Thirty-six percent indicate that they have a negotiated agreement with only
one preferred car rental company, while the remaining 13 percent have three
or more.
4
5 or more
insight on car
Traveler compliance levels for the negotiated car rental program ranks the
highest of the three major components of the negotiated travel program.
Ninety-six percent of the survey respondents indicating greater than
90 percent compliance for use of preferred car suppliers compared with
9 percent on air programs and only 6 percent on hotel programs at the high
compliance level.
17
client benchmark survey results
Copyright © 2006 BCD Travel
Insight on Changing Drivers
of Travel Management
The top three departments with primary responsibility for travel management continue to be procurement,
finance and administration (tied with human resources). A drop of 9 percent over 2005 shows a marked shift
of travel management responsibility from Corporate Services to one of these three departments.
Department with Primary Responsibility for Travel Management
Department
2006
2005
2004
2003
Procurement
34%
30%
27%
26%
Finance
25%
21%
30%
32%
top 10 travel program goals
for 2006
Human Resources
11%
10%
12%
3%
BCD Travel client goals for travel management
Administration
11%
15%
14%
16%
programs mirror those reported in the
industry with reduction of travel costs as the
Corporate Services
9%
18%
17%
10%
No. 1 goal. The top 10 goals for 2006 BCD Travel
respondent companies are listed in order
Other
9%
6%
N/A
13%
of response ranking. The 2005 rankings are
indicated in parentheses to the right of
In the BCD Travel 2006 Annual Client Benchmark Survey, reducing travel
costs year-over-year ranks as the No. 1 travel program goal. Fifty-six percent
of the survey respondents state that the 2006 travel budget is higher than in
2005 as a result of an increase in business travel. Gaining buy-in from senior
management for the travel program moved up to the No. 7 slot — a significant
jump from No. 9 in 2005.
1. Reduce travel expenses (1)
2.Negotiate more effectively with
travel suppliers (4)
3.Communicate more effectively with
travelers/management (2)
4.Improve travel information
and reporting (3)
5. Increase travel policy compliance (5)
6.Establish/use online booking
system (6)
7. Gain buy-in from senior
management on importance
of travel management (9)
8.Improve expense reporting and
auditing processes (7)
9. Update travel policy (8)
10.Implement travel alternatives (10)
Note: Reducing travel expenses remains in the
top spot with negotiation moving up from the
No. 4 slot.
client benchmark survey results
Copyright © 2006 BCD Travel
insight on changing drivers of travel management
the response.
18
Insight on Travel Management
Budget and Policy
Fifty-six percent of BCD Travel Client Benchmark Survey respondents report an increase in the travel program
budgets for 2006. This is an increase of 11 percent over last year’s results — a trend reflected in the industry.
Year-over-Year Budget Changes
60%
56%
50%
40%
2005 vs. 2006
45%
32%
34%
38%
36%
2003 vs. 2004
30%
26%
21%
20%
2004 vs. 2005
12%
10%
0
Same
Lower
Higher
Factors cited as primary causes for increases in the 2006 travel budgets:
insight on travel management budget and policy
• More trips planned for 2006 (53 percent)
• Average trip cost increasing (42 percent)
• Higher number of travelers (32 percent)
• Increase in overall trip costs (9 percent)
(Total may exceed 100% due to multiple entries)
19
For the 12 percent of respondents who reported a decrease in their 2006
travel budget from 2005 levels, the main factor cited was a management
directive to cut travel costs.
Measuring travel program savings is one of the primary forms of benchmarking
value. Airfare costs tops the specific travel-related area monitored for savings,
followed by hotel, car and value-added services.
Measurement methods vary between the major vendor categories:
client benchmark survey results
Copyright © 2006 BCD Travel
• Cost avoidance is the primary driver in the measurement of the
overall travel program savings, followed by savings based on the
negotiated total
• Contracted savings method is reported to be the most preferred
method of benchmarking for airfare savings, calculating the savings
generated by negotiated airline contracts and the difference
between the contracted fare, the airfare paid versus the published
rate without discount
• Incremental savings (year-over-year) continues to be the primary
measurement method for hotel and car
decisions. Stricter application of the travel policy to a company’s program
has risen 4 percent over 2005. Other industry trends reveal that company
financial executives prefer to apply preventive measures to the travel program
to manage costs, such as the required pre-approval of traveler itineraries.
Average Compliance by Category
Compliance Category
Level of Compliance
Air program
71% to 80%
Hotel program
61% to 75%
Car Rental program
Greater than 90%
Travel Policy Enforcement
0.5
Lenient
to moderate
46%
0.45
39%
0.4
Moderate
0.35
Moderate
to strict
0.3
27%
0.25
0.2
Lenient
23%
18%
17%
Strict
0.15
13%
9%
0.1
5%
0.05
3%
0
2005
2006
communication is key
for policy compliance
American Standard recognized that simply
asking travelers to stick to policy was not
enough. With more than 9,000 employees
around the world using the travel program,
Tom Barrett, the company’s Global Strategic
Sourcing Director, knew obtaining buy-in
from the company’s hotel coordinators was
paramount to the success of the program.
Barrett identified key business owners in the
company to champion the hotel initiative and
to work together to “chase the spend.” Today,
travelers are onboard with the program, booking
the company’s preferred hotels through its
online hotel directory, which provides instant
access to property details, policies and updates
from the global travel team.
According to Barrett, the two keys to the success
of the American Standard program are:
• Understanding the unique cultures and
requirements within the company and
using that knowledge to guide the sourcing
initiative, ensuring traveler’s preferences
and requirements are met.
• Improving communications by focusing
on benefits and fostering support from
business leaders and travelers, rather than
simply mandating compliance.
Excerpt from BCD Travel Case Study: Hotel
Program Management, A Client Success Story:
American Standard
client benchmark survey results
Copyright © 2006 BCD Travel
insight on travel management budget and policy
Travel policy changes year-over-year have given way to policy enforcement
20
travel policy by the numbers
International Travel
Class of service for international air travel continues to be evaluated due
to the high cost of international travel. However, traveler comfort and
productivity are also major factors in the company’s decision for policy
allowances in this category.
• 26% allow business class
• 19% allow business class for trips more than six hours
• 11% allow coach class
• 10% allow business class for trips more than eight hours
• 7% allow business class for defined executive levels
• 4% allow business class for international travel over water
• 2% allow first class for defined executive levels
Hotel Cancellation Reimbursement
• 20% allow reimbursement of costs incurred from non-refundable
hotel reservations due to cancellation
• 35% allow reimbursement for fees for missing hotel
cancellation deadline
• 9% allow reimbursement for early departure fees
Airline Club Memberships
• 9% allow reimbursement for Senior Vice President level and above
• 5% allow reimbursement for Vice President level and above
insight on travel management budget and policy
Sedan/Car service to Airport
• 28% allow reimbursement any time cost and mileage
is less than parking
• 20% always allow reimbursement
21
client benchmark survey results
Copyright © 2006 BCD Travel
Insight on Crisis Management
BCD Travel has experienced an increase among its client base in the requirements for crisis management plans
and products. The natural disasters and contagion concerns in 2005 and 2006 have moved traveler tracking
and security higher up on company management’s priority list. This concern is prevalent across the industry.
A growing trend in travel security has shown that the “crisis management”
program for travel is being fully integrated into the organization’s
business continuance plans as travel is considered a vital component of
conducting business.
Eighty-three percent of this year’s survey respondents report the use of a
technology tool to track travelers. Fifty-three percent of respondents cite
that these tools are global or multi-national in scope.
Global Use of Traveler Tracking Tools
The key to a successful travel preparedness program is advance planning.
If and when a crisis occurs, the company will be better positioned to avoid
significant business disruption and protect the well-being of its employees
by enacting an established plan.
According to BCD Travel’s Account Management teams, there are
numerous things BCD Travel clients can do to prepare for a possible
contagion, including:
NO
YES
53%
47 %
insight on crisis management
• Forming a cross-functional pandemic team that meets on a regular
schedule to update all company procedures
• Launching an intranet site to communicate company and health
information to all operations
• Evaluating company infrastructure to ensure employees are able to
work from home, if needed
• Cross-training employees to ensure business continuance in the
event of high absenteeism
client benchmark survey results
Copyright © 2006 BCD Travel
22
Insight on Charge Card
In today’s competitive and cost-conscious environment, having comprehensive data in hand is key to managing
a successful travel program. One might even say the “devil is in the details,” because even the most tightly
managed travel program depends on the success of the smallest components.
Eighty percent of respondents stated that they have a consolidated charge
card program. Of that number, 44 percent said their programs were global
in scope. Fifty percent of respondents mandate the use of their corporate
charge card for reimbursement. This number has increased 6 percent over
last year’s survey.
Thirty-one percent of survey
respondents mandate the use
of a corporate card for hotel
reservation payment.
When choosing a corporate charge card, respondents cited the following
drivers (listed in order of importance):
• Acceptance
• Reporting capabilities
• Potential rebate
• VIP program
• Rewards program
Corporate Card Program
(Air Reservation)
45%
43%
Individual Corporate Card
– Individual Pay
40%
40%
Individual Corporate Card
– Central Pay
35%
30%
25%
27%
24%
23%
15%
14%
7%
10%
Central Bill Account
22%
20%
Other
5%
0
insight on charge card
2005
23
2006
Automating expense reporting products frequently accompany a strong card
program. Seventy-eight percent of survey respondents report the use or plans
to use an automated T&E system. Twenty-one percent state that the system is
global and an additional 15 percent plan to implement globally.
client benchmark survey results
Copyright © 2006 BCD Travel
Insight on
Online Booking Adoption
The rise of business travel volume and increased travel budgets drive companies to seek effective methods of
cost control. The use of corporate online booking tools continues to grow as one of the keys to travel program
communication and policy compliance. Seventy-one percent of BCD Travel’s survey respondents report the use
of an online booking tool within their company.
The average online adoption rate by respondents was 35 percent. Some
BCD Travel clients report adoption levels in excess of 80 percent, with
adoption goals averaging around 47 percent of eligible transactions.
• Adoption rate ranked the highest with 89 percent
• Transaction fee cost savings was reported at 52 percent
• Online transaction cost for air reservations versus traditional air
reservation cost was rated at 38 percent
• Online hotel booking versus traditional hotel reservation cost was
reported by 15 percent of survey respondents
• Improved supplier negotiations received 7 percent of the responses
The average 2006 survey respondent organization goal for online adoption
rate is 52 percent. The 2005 average online adoption goal reported was
43 percent with an actual average adoption rate of 36 percent achieved.
Sixty percent of survey respondents report good to excellent online booking
tool satisfaction levels. This rating is 8 percent higher than in 2005. Continued
functionality improvements of the online booking tool boost online adoption
rates and user satisfaction.
The top three online booking tool enhancements requested by survey
respondents to push online adoption to the next level are:
• online ticket exchanges
• ability to book meeting trips
Thirty-five percent of survey
respondents apply tiered
fees with lower or no fees for
online bookings.
PhoCusWright, Inc. forecasts that by the end of
2006, online adoption for the corporate travel
industry will reach 48 percent. This growth
will be spurred by several behavioral factors,
including increased, but cautious spending,
a “halo effect” from using other online tools
(i.e., online tools for meetings management,
expense management, etc.), and greater online
acceptance among the slower-to-adopt midsized firms. This is a reflection of corporations’
confidence in the channel to deliver tangible
ROI value, true process efficiencies and
convenience to traveling employees.
• online ticket void and refunds without exchanges
Additional functionality components included the ability to book non-GDS
hotels and rail online.
client benchmark survey results
Copyright © 2006 BCD Travel
insight on online booking adoption
When asked how their organizations measure the success of an online
booking tool:
24
Online Booking Tools
used by survey
respondent organizations
(listed in order of response):
• ResX
• GetThere
• Cliqbook
• Travelport
Mandating the use of online booking tools is not a prerequisite for higher
levels of online adoption. However, companies with strict mandates report
• Aergo/e-Travel
in the preferred supplier program. Survey organizations report various
insight on online booking adoption
are increasing. Respondents report that 13 percent apply a strict mandate to
their online booking program — up 4 percent from 2005. Forty-one percent
of respondents apply a soft mandate — a 3 percent increase from 2005. And
46 percent of respondents report no online booking tool mandate — a
decrease of 2 percent from 2005.
driving online adoption
Hotel, car and air packages sold through Web sites continue to cause leakage
methods of controlling leakage through online tools.
As a company outlines its strategy for
implementing an online booking tool, it
is important to understand the potential
impediments to adoption:
25
adoption rates almost twice that of companies without mandates. Year over
year, BCD Travel survey data indicates stronger mandates for online booking
• Service perception: if it is easier to call
the travel agent, travelers will call
• Automation considerations: upgrades,
non-accessible seats, complicated air
pricing, vendor alliances, sedan service
and domestic rail
• Speed issues: fast Internet connections
must be available, and internal network
firewall issues must be resolved
• Contractors or non-employee travelers
• Security concerns
• Complex approval processes
• All carriers and hotels might not be in
the system
Forty-nine percent of survey respondents
report that the company has provided a
traveler portal and an additional 5 percent
indicate plans to implement in the future.
client benchmark survey results
Copyright © 2006 BCD Travel
• 38 percent of the respondents report that communication
reinforcement of the company’s traveler portal is initiated
• 22 percent enforce the use of company-approved online
booking tools
• 30 percent of survey respondents indicate that 80 percent to 100
percent of hotel bookings are made through the online booking tool
and agency of record
Survey results from 2006 show that companies apply various initiatives to
drive online adoption. The initiatives are listed in order of response, and the
2005 ranking is indicated in parentheses to the right:
1. Ongoing communication and marketing campaigns (3)
2. Online traveler training for the online tools (2)
3. Executive involvement for the support of online booking tool (4)
4. Traveler portal for one-stop travel information (6)
5. Lower point-of-sale fee for online reservations (1)
6. Cost savings monitoring and communicating (7)
7. Super-user groups throughout the company (5)
8. Incentives for frequent online bookers (8)
Note: Communication programs and the implementation of a company traveler
portal have significantly shifted on the list in the order of importance as a method
to drive online adoption.
Implementing a traveler portal supports online adoption by pushing all
traveler activity to company-preferred Web channels for communication,
policy, expense reporting and other associated technology products.
Insight on Global Consolidation
A global travel initiative includes not only the consolidation of spend data between countries, but also the
consolidation of the travel process. This element of consolidation holds significant value well beyond the
front-end savings potential gained through leveraged negotiations. In addition to the value a streamlined and
consistent travel purchasing process can bring to a corporation’s internal self image, consolidation can typically
save a corporation hundreds of thousands of dollars in personnel, internal IT, equipment and facilities costs.
Thirty-five percent of survey respondents have a globally consolidated
travel program — an increase of 5 percent over 2005. For those reporting
consolidation, North America and Europe continue to dominate the regions
of global travel consolidation, followed by Asia Pacific and Latin America. The
breakdown on consolidation by region reflects like results when compared to
the 2005 BCD Travel Annual Client Benchmark Survey, with the exception of
the increased consolidation growth in the Latin America market. Additionally,
the survey reports that 29 percent of the respondent companies have a global
airline program.
Global Consolidation by Region
Middle East
6%
Africa
4%
Europe
29%
Latin America
15%
Asia Pacific
insight on global consolidation
16%
North America
30%
client benchmark survey results
Copyright © 2006 BCD Travel
26
regional challenges
to consolidation
Travel data shows that there are more than 6,000 languages spoken
throughout the world and more than 160 different currencies. Outlined below
are the cultural complexities for the major business regions. Consolidating
the travel program requires consideration of these differences in order to
achieve a level of efficiency in a global travel program.
Americas
• Fast-moving, ever-changing travel programs
• Culturally adept at change
• Cutting-edge e-fulfillment and high adoption rates
Europe, Middle East and Africa
• Diverse cultures, languages, technical standards and customer
service issues
• Increased use of hotels, rail and meet and greet services
• Culture requires hands-on service thus more manual input
• Online booking tool use and e-fulfillment trends growing
but still slow
• Driven by legal requirements such as VAT, TUPE and EU Data
Protection Laws
Latin America
• A cultural region with the least barriers for consolidation
• Vastly different levels of development throughout the region (key
markets are highly sophisticated while smaller countries are more
manually driven)
• Regional procurement requires a more personal touch —
face-to-face interaction
insight on global consolidation
• Manual service environment and customer service issues
• Lacks universal use of credit cards
• Culture dictates personalized service
• Increased need for security and meet and greet services
• Low online adoption
27
Asia Pacific
• Largest and most complex region containing three-fifths of the
world’s population
• Diverse cultures, languages, technical standards and customer
service issues
• Travel environment is extremely complex
• Slow adoption of online booking tools (Outside of Australia, ASPAC
is currently seeing adoption rates less than 5 percent in major
business markets)
client benchmark survey results
Copyright © 2006 BCD Travel
global travel policy case study
BCD Travel Consulting recently assisted a large steel manufacturing company
review its travel policy as it moved from a policy with global “guidelines” to
a true global travel policy. This graphic outlines the major elements reviewed
and the outcome of a strong policy to maximize global travel consolidation.
The 2006 global consolidation survey data
shows an average increase of 3 percent to
5 percent in the number of countries included
in the program with the most significant
increase of 12 percent for programs with 11 to
20 countries.
Background
Industry: Steel manufacturing
Structure: Conglomerate of many entities
Employees: 98,000
Scope
existing
Objective:
I nternational standardization
local
Responsibilities
as is
restructuring
Content
hot buttons
comprehensive
Strictness
Tiers in travel policy
new
global
lenient
strict
no tier
Level of mandate
informal guideline
Consequences
not defined
When asked about the allocation of personnel
to a global travel program, 66 percent of
respondents that have globally consolidated
travel programs state they have a dedicated
global travel manager — an increase of
9 percent over 2005.
3+
strict mandate
detailed
Outcome:
Global travel policy with local addenda for country specific regulation
Source: BCD Travel Consulting
Global Consolidation (Number of Countries)
60%
50%
55%
48%
43%
40%
30%
33%
27%
20%
10%
25%
16%
9%
20%
15%
5%
4%
0
2006
2005
2004
2 to 10
11 to 20
21 to 30
more than 30
insight on global consolidation
Key policy findings and changes resulting from the review included:
• Travel policy standardization was increased to the global positioning
• Transition to more comprehensive policy content as opposed to
regional “hot buttons”
• Travel policy strictness was moderately strict and remained
at the same level
• Policy mandate level was increased to a stricter mandate
• Consequences for non-compliance was increased in the policy
client benchmark survey results
Copyright © 2006 BCD Travel
28
Insight on
Global Distribution Systems
In a dynamic marketplace with an evolving infrastructure, the travel industry has made tremendous strides
in the development of tools and distribution solutions that connect the supplier and the end user. BCD Travel
expects the next five years to present even more opportunities for alternative solutions and greater choices for
the corporate buyer.
“We are going to see more emphasis placed on corporate travel portals
and transparency of content through multiple channels,” said Dee Runyan,
executive vice president — BCD Travel.
“The management of preferred suppliers and preferred booking channels will
be critical for the control of travel and expense budgets. Customers need real
solutions beyond technology. Corporate buyers need strategic compliance
plans. In this industry, technology is not the endgame.”
In the first quarter of 2006, the major airlines and global distribution system
(GDS) providers signed distribution agreements extending contracts into 2011.
Eighty-three percent of survey respondents said they would consider
alternative distribution channels to the GDS, and the majority state that access
to supplier content and functionality are the key drivers in the determination
of choosing a GDS. Thirty-two percent believe that this decision belongs to
dee runyan
Executive Vice President
the travel management company.
insight on global distribution systems
BCD Travel
29
paying for content: who’s responsible?
As an industry, we are moving toward a new economic model where the GDS booking fee is being driven down the
distribution chain, which in turn will drive creative financial models across all user groups (airlines, online and traditional
agencies, technology providers, travel buyers).
Some industry analysts are predicting shifts in transaction economics as new carrier and GDS agreements go into
effect. End users may begin to see pass-through fees in the reservation for distribution costs. These fees may be added
to the base fare much as the additional charges now accumulating at the point of sale and point of departure for
fuel costs and other operating expense recapture charges. The continuing economic status of the airlines and growth
in online technology is providing the catalyst for the new economic environment and reality. Industry predictions
estimate that pricing between airlines and GDS providers in 2007 will be down 15 percent to 20 percent. This shift in
revenue dynamics will be passed along to the consumer.
According to a recent Sabre study, if the GDS companies lost access to 10 percent of the content they now provide, the
industry-wide cost impact would be an increase of US$1.5 billion a year. This cost is attributed to technology development,
lost agent productivity and access fees to the end consumer.
client benchmark survey results
Copyright © 2006 BCD Travel
Insight on
Meetings Management
In recent years more and more organizations have migrated to centralized, standardized meeting planning.
And the trend continues. Today, the essential components of any large meeting can be evaluated, executed and
purchased using standard business practices. Often procurement and financial officers work in tandem with
the corporate meeting planner. Conversely, meetings planned division by division and department manager by
department manager wastes valuable time and resources.
BCD Travel survey results show that 40 percent of survey respondent
companies manage meetings through the corporate travel department.
Fifty-eight percent of respondents report that their company’s corporate
travel department is responsible for air only, while 10 percent of the
respondent’s companies leverage meeting air spend for transient travel.
Number of Annual Meetings Planned
11 to 50
50+
25%
43%
32%
Average Meeting Attendee Size
1%
Less than 50
50 to 250
250 to 1,000
> 1,000
45%
50%
• Client-side planners and third-party event
planners expect the number of meetings
planned by their organizations to grow by
7 percent and 21 percent, respectively
• Suppliers expect a 10 percent increase in
the number of meetings they will support
• Client planners, third-party planners and
suppliers predict 7 percent, 14 percent
and 9 percent jumps, respectively, in their
expenditures per meeting in 2006
• Meeting space lead-time is projected to
increase by 38 percent in 2006, up from
29 weeks to 40 weeks on average.
• U.S. and European planners project
little change in the use of international
meeting destinations while Canadian
planners expect a decline
• A greater percentage of third-party
meeting planners say they are working with
internal meeting planning departments
• The top five internal organization trends
affecting the meetings industry are:
> the economy
> travel costs
> the cost of oil
> changes in technology
> increasing globalization
client benchmark survey results
Copyright © 2006 BCD Travel
insight on meetings management
futurewatch 2006 projections
1 to 10
4%
For the third year in a row, the global meetings
industry is expected to expand, which will provide
a much-needed boost for hotels, airlines and
convention centers, according to FutureWatch
2006, an annual research report from Meeting
Professionals International (MPI).
30
case study— meetings management
Bottom Line Savings with Strategic Meetings Management
A top U.S. financial institution redesigns its meetings program
for maximum savings
A smartly structured
strategic meetings
management program
can realize savings of
20 percent.
The Evolution of Discovery
One of America’s major financial services companies engaged BCD
Meetings & Incentives to design and implement a comprehensive meetings
management program. Their charge was to develop standard operating
procedures to streamline operations for a centrally managed meeting
planning department.
Dave Sonricker, senior vice president — BCD Meetings & Incentives, explained
the initial discovery process as a multi-year initiative.
According to Sonricker, important steps during the discovery
process included:
If a company is not
willing to mandate, or at
least strongly encourage
adoption of a strategic
meetings program, the
ability to drive savings is
considerably diminished.
• Assessing the existing process for managing meetings internally
and with external suppliers
• Identifying all stakeholders, as well as current meeting planners
in the organization
• Gaining support and buy-in for a strategically managed
meetings program
“We found that meetings — both large and small — were being managed by
the customer’s internal marketing departments and outside meeting planning
agencies. The discovery analysis showed several opportunities to consolidate
expenditures through centralized management of policy, personnel, procurement,
planning and execution.”
insight on meetings management
Defining the Deliverable
After completing the initial discovery phase, BCD Meetings & Incentives delivered
a formal business plan and marketing strategy to the financial institution. The
strategy focused on the company’s small meetings, a series of companywide
training programs, customer events and general corporate meetings.
31
The client implemented a new meetings policy, which required that all
meeting and event contracts be reviewed and approved by BCD Meetings
& Incentives’ contract administration staff. The key objectives included the
collection of activity and savings data, followed by a focused procurement
strategy comprising hotels and destination management companies.
Next, BCD Meetings & Incentives helped the client plan aggressive
marketing tactics for specific divisions within the company, creating a
broad, consistent messaging campaign to communicate the program goals
to the entire enterprise.
client benchmark survey results
Copyright © 2006 BCD Travel
Topped with Powerful Technology
A key element of the company’s meetings policy launch was the
implementation of a meetings technology platform. The system was rolled
out in stages within the organization — first to collect data for strategic
planning and vendor negotiation, then to manage attendee registration and
the GDS interface with the financial institution’s corporate travel supplier.
Significant and measurable cost savings from the meetings management
initiative accumulated after just a short time and have grown consistently
throughout the life of the program.
incentive travel
Incentive travel is on the rebound. But, with
the implementation of Sarbanes-Oxley, just
like virtually everything else in the industry,
incentives are more closely monitored than
ever. In the past, millions of dollars were
budgeted for incentives and this expense
(usually embedded in the sales and marketing
budget) was and still is outside of the corporate
travel realm.
Training support, testimonials and user tips have been part of a continuing
strategy to drive technology usage and acceptance throughout the organization.
“Technology is an enabler — merely implementing it is not enough,” stated
Sonricker. “You have to drive usage and accuracy, and most importantly, analyze
data in order to leverage your purchasing power with vendors.”
When asked if their organizations offer travel
as a reward, 18 percent of BCD Travel survey
respondents said “Yes.” Ninety percent said
their organizations plan less than 10 incentive
programs annually.
A Mature Program
Continuing steps in the financial institution’s meetings management program
have yielded additional benefits. A customized small meetings program was
launched across the organization. And administrative staff can now plan
meetings on their own, minimizing risk to the company through pre-negotiated
contracts and achieving established savings benchmarks.
BCD Meetings & Incentives designed and deployed a Web portal to store
and communicate information relative to policy details, special programs,
standard operating procedures, forms and public sites. A preferred hotel
program was also introduced through the portal, which channels business
through a select group of hotel partners.
Fifty-four percent of respondents cite that
their average incentive program size is less
than 50 attendees. Thirty percent of the
respondents state that their average incentive
program size is between 50 and 200 attendees
with another 15 percent planning incentives
with an average size of over 200 attendees.
insight on meetings management
Increasing Compliance
Following the launch of the hotel program, BCD Meetings & Incentives shifted
its focus toward driving compliance. Electronic marketing campaigns and
road shows were deployed to increase awareness and explain the benefits
of using preferred suppliers. Additionally, the preferred vendor policy was
enforced by the client.
While deviations from policy could be approved with justification, all
non-compliance was tracked through the meetings technology platform.
BCD Meetings & Incentives used this data to educate department heads
on ways to improve the organization’s strategic meetings management
program in their areas. The team also analyzed data to identify new
classes of preferred vendors.
BCD Meetings & Incentives continues to serve the financial institution
today, with new measures aimed at further leveraging purchasing power and
limiting corporate risk. With the help of BCD Meetings & Incentives’ expert
consulting services, the company continues to demonstrate a clear ability to
move market share, enabling it to redesign and renegotiate preferred vendor
programs for additional savings.
client benchmark survey results
Copyright © 2006 BCD Travel
32
Insight on Leisure Travel
Fifty-three percent of BCD Travel survey respondents report that they provide a leisure-travel offering to
employees. Six percent provide a leisure offering to senior executives only while 39 percent offer a program
to all employees. Of the remaining 47 percent who do not offer leisure travel to their employees, 1 percent is
considering offering leisure travel in the future.
insight on leisure travel
Seventy-three percent state that the leisure travel program is managed
through the corporate travel department. Only 9 percent report that leisure
travel is provided by an outside travel provider.
33
client benchmark survey results
Copyright © 2006 BCD Travel
Six Sigma Organizations
Service Configuration Breakdown
Multiple Onsites
CTD
4%
2%
Rent a Plate
9%
YES
33%
Onsite
41%
NO
67%
Res Center
44%
How Do You Use Benchmarking?
90%
Prove program value
80%
70%
68%
67%
64%
60%
60%
Calculate savings
50%
Assist in decision making
40%
Validate choices
30%
20%
10%
0
(Total may exceed 100% due to multiple entries)
Ideal Benchmarking Peer
50%
40%
30%
46%
39%
Industry
36%
31%
Volume
Similar policies
20%
Geographic location
0
(Total may exceed 100% due to multiple entries)
client benchmark survey results
Copyright © 2006 BCD Travel
appendix
10%
34
Appendix
The following statistical details are provided as additional insight into the results and feedback of 181
BCD Travel survey respondent organizations.
Annual Air Sales of Respondent Organizations
Sales (in $USD millions)
Percentage of Respondents
$0 – $5
43%
$5.1 – $14.9
34%
$15.1 – $29.9
13%
$30 – $49.9
4%
$50 – $74.9
2%
$75 – $100
1%
> $100
3%
Global Distribution System Breakdown
Number of Years as BCD Travel Client
Years
Percentage of Respondents
67%
2 – 5 years
23%
1 – 2 years
6%
Less than 1 year
4%
appendix
More than 5 years
35
client benchmark survey results
Copyright © 2006 BCD Travel
Galileo/Apollo
6%
Multiple GDS
1%
Galileo
9%
Worldspan
50%
Sabre
45%
1055 Lenox Park Blvd.
Ste. 420
Atlanta, GA 30319
www.bcdtravel.com
06CBS-BCD07
Copyright © 2006 BCD Travel. Unauthorized Reproduction Strictly Prohibited.