Handing business travel control to fleet managers can result in massive savings. Sarah Tooze reports
Does your company know how much it spends on business travel? Chances are that unless you have a travel manager, you will be spending far more than you think – or, indeed, should be.
One company in retail thought it kept a tight control on its travel spend. But its estimate turned out to be wildly inaccurate.
It believed its spend was £30,000 – the amount paid to its travel agency. In reality, it was spending £500,000.
No-one was managing the spend and controlling it. That changed when it was taken over by another company which had a fleet and travel manager.
He was able to highlight the actual cost of business travel and set about introducing policies and processes to reduce costs. For instance, long haul flights were purchased further in advance, saving thousands of pounds.
Consequently, annual expenditure has been cut by £90,000 – rail travel spend has fallen by 28%, air travel by 18% and hotel bills by 19%.
He believes travel management is a role that should be embraced by fleet managers. And he’s not alone.
Professor Peter Cooke has championed the idea of fleet managers progressing to mobility managers for the past 15 years.
“It can work both ways,” Cooke says. “I have also seen travel managers taking on the fleet role, particularly in a contract hire situation.
“If the fleet is outsourced to a contract hire or fleet management company there is an opportunity to consolidate the roles of fleet and business travel.
“If a company is re-organising they might decide to give the fleet operator a bigger role. The big advantage is cost because you start to manage
While most organisations still keep the fleet function separate to business travel, the numbers managing both are on the increase.
The Institute of Travel & Meetings (ITM, formerly the Institute of Travel Management) estimates that 15 to 20% of its members manage both fleet and travel, and says it has seen numbers grow recently.
ITM chief executive Paul Tilstone believes corporate social responsibility as well as the economic climate is driving the change.
Nigel Turner, director of programme management for the UK & Ireland at Carlson Wagonlit, which specialises in business travel management, has also noticed a trend. He says: “It’s common for our customers to have dual responsibility – about 20% of our customers that are responsible for travel also look after the car fleet – and we have seen an increase.
“Business travel is not just planes and trains. Company cars and the grey fleet should be put into the equation too.
“Particularly in the public sector they are looking at both aspects. They are looking at ways to get people out of the grey fleet and into more energy efficient modes of transport.”