Managing Travel in Challenging Times Be Smart: Travel More for Less

1. Managing Travel in Challenging Times Be Smart: Travel More for Less From the Author of Smooth Landings Michael MacNair September 25, 2008

2. Travel’s Perfect Storm Stalled global hotel development Lost productivity via weather delays & flight cancellations Rising fuel costs Challenging Travel Times Increased Costs extend to phone reservations, checked bags, change fees, meal services & fuel surcharges 35% ticket cost increase from $467.57 to $633.44 Less capacity: Air (59.7m seats), Car, & Hotel Pressure to deliver from a sour economy

3. The Travel OpportunitySimple Actions to Net Sizeable Results • According to the National Business Travel Association, business travel is the second largest controllable cost of an organization. • Travel effects every department • Travel Procurements vs. Travel Anarchy = Reinforcement of a cost containment culture • Complex Product – Thousands of fares on thousands of suppliers

4. Steps To Best Manage Travel in Challenging Times Suggestions • Manage Travel Instead of Buying It • Balance Your Organization’s Travel Requirements With the Traveler’s Needs to Define Expected Value on a Trip • Build, Expand, and Monitor an Effective Travel Policy From the Top Down • Educate Travelers on Best Practices and Useful Procedures • Leverage Travel Volume with Data and Control

5. Managing vs. Buying TravelStandard Operation Procedures Purchasing any corporate travel outside of one consolidated, vetted, and approved procurement system: • Costs more than it should • Reduces employee productivity • Sacrifices support and advocacy • Is outside of SOP of all Fortune 500 companies • Reduces control over business expenditures • TMCs help travelers find better fares than they find on their own

6. Managing vs. Buying TravelBenefits to Capture & Sell Companywide Travel Management/Procurement Offers Four Key Benefits That You Should Maximize & Sell

7. Managing vs. Buying TravelValue Value – MacNair Travel’s savings results are $65 less for domestic fares and $1,631 less for international fares.

8. Managing vs. Buying TravelValue -Via more comprehensive access to fares & airlines (low-cost carriers, Web fares, legacy fares, & corporate rates) -Via the enforcement of your clear-cut value expectations & report supervision to evolve -Value engineering (multileg, international, etc.) -Preferred management -Cost effective change management

9. Managing vs. Buying TravelValue

10. Managing vs. Buying TravelProductivity • Productivity – an estimated 50 percent reduction in time is spent making travel arrangements and dealing with changes How? -Online & call-in reservations well supported -Change management -Support on the road -Data & reporting to enhance expense report & financial management

11. Managing vs. Buying TravelSupport & Advocacy • Support and Advocacy -Strategic Systems Development – policy templates, best practices, & useful procedures -Supplier negotiations -Issues management (on the road, when wronged)

12. Managing vs. Buying TravelControl 4. Control -Reporting & Data -Total Spending -Top destinations & suppliers (negotiations) -Unused non-refundables -Call-in vs. online via TMC -Cost of change: compliance -Policy -FlyAmerica -Authorization

13. Managing vs. Buying TravelSelect & Sell the System Summary -Sell the Benefits -Maximize the Value -Reinforce Culture of Cost Containment -Secure Executive Buy-In -Expect Resistance

14. Balance Travel RequirementsClear Expectations • Clearly define value expectations (connections, airports, LCCs, hotel, & car) • Clarify use of preferreds (supplier like air, TMC, card…) • Define systems (coding, expense reports…) • Balance objectives of team

15. Balance Travel RequirementsFour tools for setting expectations • Secure templates of successful travel policies • Understand the various travel price expectations that require clarification. • Assemble the “travel squad” • Launch the process with Executive Buy-In

16. Balance Travel RequirementsFour tools for setting expectations • Secure templates of successful travel policies • Consult NBTA and companies like MacNair Travel that manage travel well

17. Balance Travel RequirementsFour Tools for Setting Expectations 2. Understand & address the various travel price expectations that require clarification. • Connecting flights versus non-stop flights • Alternative airports versus central airports located nearby. • Preferred suppliers versus non-preferred suppliers • Hotel selection clarity • Car size and type • Advance purchasing • Miscellaneous costs (coach seat, upgrades, call-in vs. online, meals, bags, etc.

18. Balance Travel RequirementsFour Tools to Setting Expectations 3. Assemble a “travel squad” • Include schedulers, road warriors, an executive level employee, and the finance team • Understand various perspectives & challenges • Travel procurement change advocates

19. Balance Travel RequirementsFour Tools to Setting Expectations 4. Launch the process with Executive Buy-in • C-level Buy-In • Policy Enforcement

20. Build an Effective Travel Policy from the Top DownOn-going Process in Changing Marketplace An effective travel policy should define: • Why Travel Management • Value Expectations • Required processes • Useful practices

21. Build an Effective Travel Policy from the Top DownAreas to Address Why Travel Management Value Expectations • Air Price thresholds (connection, alternate airport, LCC) • Hotel brand or per diem direction • Car type and policies • When and why to use non-refundable fares • When to use online reservation systems • Commitment to preferred supplier rates • Expectations on miscellaneous travel costs, such as entertainment, bags, & seats • Expectations on use of low-cost carriers • Processes for maximizing use of non-refundable tickets

22. Build an Effective Travel Policy from the Top DownAreas to Address Required Process • Approval process (more scrutiny over certain price thresholds) • International travel procedures and safety tips while on the road • Emergency procedures & tips • Project and customer code definition requirements Useful Tips • Tips regarding currency, baggage surcharges, and communication tools • Procedures for policy oversight • International travel tips & tips for safety on the road

23. Educate Travelers on Best PracticesCommunications Strategy • Reduce liabilities, recognize fluidity of marketplace, understand your commitment to employees • Establish one point of contact for all travel data (consider on-going learning) • Leverage travel squad to determine right use of data & how to communicate • Determine what data would be useful to promote, who should receive it, and how its distribution will be managed • Create an emergency communication process: Track all employees in the event of national or natural—weather—emergencies, deliver targeting warnings and data to effected groups • Keep your road warriors informed (especially international – IJET)

24. Leverage Travel Volume with Data & ControlData & Control Data & Control • Fare selected vs. lowest fare available • Policy compliance (reason codes) • Preferred support & opportunities • Authorizations • Advance purchase • Cost of change • Fare types selected Can only happen with consolidation

25. Leverage Travel Volume with Data & ControlLeverage • Secure deals (small business, corporate, meeting, advance purchase, etc.) • Demonstrate evidence of control over buying patterns (board suppliers, etc.) • Maximize tools (pay with points-well, card benefits, upgrades, benefits and available discounts) • Create a Hotel RFP and ask for offers • Do the same for other types of travel expenditures & services

26. In Summary 1. Challenging times call for well managed travel. Sell the benefits and consolidate. 2. Partner companies, useful technologies, and best practices provide great opportunities to reduce this significant cost. 3. Focus on a few key areas to improve upon and create a plan. 4. Deliver clearer and more conscious expectations in a policy your TMC enforces • Expand policy to address new costs • Develop an authorization process • Collect data, monitor, & leverage volume & tools Flying SMARTER & CHEAPER is possible if you develop, evolve and fully use the right system

27. Q & A Time for your questions and answers.