August 27, 2013
Intense pressure on federal agencies to reduce costs has been particularly visible in the area of travel. In May 2012, the Office of Management and Budget directed agencies to reduce travel spending by 30 percent from fiscal 2010 levels, which was followed by sequestration in March 2013, and stories of government travel excess. This environment has created arduous challenges for agencies in managing their travel dollars.
Many have reduced travel costs by choosing lower airfares, limiting hotel bookings, reducing or sharing car rentals and, in some cases, canceling trips altogether. What’s surprising, though, is that some federal entities aren’t fully optimizing their travel programs. A bigger concern is that agencies are advising employees to avoid using approved travel management companies and arrange trips directly with airline, car rental and hotel vendors.
On the surface, bypassing these contractors may seem like a simple way to save money. What agencies might not know is that in the long run this approach will likely result in higher costs and more risk.
Teaming with travel management contractors -- whose fees generally represent less than 2 percent of an agency’s overall travel costs -- can help agencies optimize spending, provide better services to their employees and travel managers, boost security on the road and save time.
One big question has been: Can travelers find better rates on their own?
A recent study by Carlson Wagonlit Travel shows that buying services directly from a vendor or booking trips outside an agency’s managed travel program can increase costs by 9 percent to 24 percent. When making arrangements through the approved program, the value of that consolidated buying power is significant, including trip data and information that can save agencies thousands of dollars.
If federal employees fail to use the approved travel programs, the General Services Administration can’t negotiate the best terms and prices, vendors are far less likely to participate and offer discounts, and costs increase. In addition, working directly with airlines, car rental companies and hotels can result in unforeseen booking and change fees.
Many employees may not be aware of the services provided through their travel program. Contracted management companies can help them navigate regulations and policies, such as the Fly America Act, Open Skies agreements, and hotel per diem ceilings. Travel management agreements include customer service and after-hours assistance. In an emergency, for example, representatives can quickly provide information in affected locations and support travelers in distress. A travel website is unlikely to provide the same sort of help.
Making arrangements directly with vendors can take valuable time away from an agency’s core mission. Google research shows the average traveler scans about 22 websites during 9.5 research sessions before booking a trip.
Booking outside the travel program also offers less flexibility for trip cancellations and changes. Employees wouldn’t have access to customer support en route, when last-minute trip changes and transportation problems can generate the most stress. That stress can come at a considerable cost in wasted time and lost productivity.
More than ever, as resource constraints require agencies to make the most of their travel dollars, few can afford to have their employees booking trips outside of a system designed and ready to support their needs -- saving time and money.
Matt Beatty is president of military and government markets for CWTSatoTravel, a division of Carlson Wagonlit Travel.
(Image via Sergey Nivens/Shutterstock.com)
August 27, 2013